Proposal to eliminate condo arbitration program moving through Legislature

Article Courtesy of The Tallahassee Democrat

By Jeffrey Schweers

Published April 11, 2019


A proposal (SB 1362) moving through the Legislature would eliminate an inexpensive statewide condo mediation program in favor of dramatically more costly private mediation and court jurisdiction to settle disputes between residents and their condo boards.

The amendment drafted by the Real Property Section of the Florida Bar and introduced by the bill’s sponsor, Sen. Joe Gruters, R-Sarasota, will be heard before the Senate Innovation, Industry and Technology Committee at 1:30 p.m. Wednesday.

The House version received unanimous favorable votes by two committees and is likely to be scheduled for a floor vote in the next two weeks.

The Legislature created the Arbitration Section of the Division of Condominiums, Timeshares and Mobile Homes under the Department of Business and Professional Regulation to reduce the cost and time involved in settling disputes between unit owners and condo associations.

Terri Jones, one of the six attorneys who work for the program, called the amendment a “sneak attack” on condo unit owners and the arbitration program in a letter she sent to Gruters.

“Admittedly, this is my job, but this bill will do a lot of harm to condominium owners in the state,” Jones said.

She told the Democrat Tuesday afternoon she was fired by General Counsel Ray Treadwell for attempting for a week to meet with DBPR Secretary Halsey Beshears to discuss the proposal.

Treadwell told her that her services as a senior attorney were no longer needed.

Her dismissal was "based on internal conducted that she committed today," DBPR spokeswoman Maegan Wynn said. "It was not due to her advocacy for or against pending legislation."

Currently, residents who have a dispute with their association board pay only a $50 filing fee, while condo associations pay a $200 fee for election and recall arbitration. Private mediation can cost the unit owner $300 to $500 an hour.

Each arbitrator has over 20 years of legal experience, and the condo owners pay a $4 fee for their service. The arbitration section has been performing this alternative dispute resolution function for nearly 30 years.

Under the proposed law, the unit owners would have to pay a private mediator half of his or her hourly rate, and the association would pay the other half. If there is no resolution, the unit owner would have to pay a $400 court filing fee and wait for the court to schedule their case.

Tres Holton, managing partner/ government affairs with The Holton Group, said the measure had good things in it, including greater transparency of records, term limits and ethics reform. But terminating the arbitration program is "a worm in an otherwise good reform bill," he said.

The arbitration board is a tremendous asset for residents who can't hire expensive lawyers to fight rogue or runaway condo boards, he said.

"We have all heard of them and many have experienced them," Holton said. "The DBPR oversight has been a backstop, an affordable option for both the residents and responsible boards. Forcing residents and boards into costly legal battles in court will benefit attorneys, not residents."