Find Blog Articles for Florida’s Condo, HOA and the Management Industry.
The recent arrests of Hammocks Community Association members have cast a long-overdue light on the plight of helpless homeowners when the directors of a homeowners association (HOA) go deliberately wrong.
The Florida Legislature specifically designed the state’s HOA law to limit government’s ability to regulate HOAs, explaining, “It is not in the best interest of homeowners’ associations or the individual association members thereof to create or impose a bureau or other agency of state government to regulate the affairs of homeowners’ associations.”
While this may be a virtuous conceptual approach, it has created the unintended consequence of leaving homeowners with little, if any, protection or opportunity of redress when HOA board members raid association bank accounts. In this criminal case, we believe the evidence can prove the theft of well over $1 million of homeowners’ monies. But we think the actual loss is much higher.
Sadly, we have seen instances of greedy or unscrupulous board members take advantage of this lack of oversight before. They often hide their misconduct by making it extraordinarily difficult and expensive for homeowners to effectively access and examine any records. Ironically, homeowners typically are stuck paying exorbitant legal fees for accessing information to which they should be entitled. Current law renders the only Florida agency with the slightest regulatory authority, the Department of Business and Professional Regulation (DBPR), impotent to provide the oversight that HOA residents deserve. The law also makes it unnecessarily burdensome for law-enforcement officers to obtain evidence of wrongdoing.
In 2016, I brought similar problems regarding condominium oversight and financial records accessibility to the attention of our grand jury. Their detailed report included a number of recommendations to alleviate the problem. While condominiums are not HOAs, the problems of records accessibility and financial mismanagement are surprisingly similar.
Homeowners in HOAs should be protected. Based on experiences learned during our criminal investigation, the Florida Legislature can take several steps that would go far to help vulnerable homeowners throughout Miami-Dade County, and all of Florida, without creating the government overreach the lawmakers rightfully wished to avoid:
▪ Amend the HOA law to include the same minimal protections given to condominium owners.
▪ Amend the HOA and condominium laws to provide criminal penalties for the destruction of association records or the failure to provide records upon lawful request.
▪ Amend both statutes to include criminal penalties for election fraud.
▪ Amend the law to allow DBPR to oversee HOAs and condominiums more effectively. At a minimum, the Legislature should authorize DBPR to inspect records and to personally fine board members for failing to comply with the law or provide reports to members in a timely manner.
▪ Expand the Florida condominium ombudsman’s ability to oversee condominiums and allow the ombudsman to review HOA complaints.
I was gratified to see the Miami Herald’s Editorial Board recognize some of the challenges we face during our ongoing criminal prosecution and continued investigation into the Hammocks Community Association and the clear need for focused change in the oversight of Florida’s thousands of HOAs.
As always, I would welcome the opportunity to work closely with any of our legislators who want to address the homeowners victimized by one of Florida’s largest HOAs. This issue is far too important to ignore.
SINGER ISLAND, Fla. — Many South Florida condo owners are getting a holiday surprise they weren’t expecting — paying more for insurance. It’s all part of the state’s insurance crisis that has hit homeowners all year.
“The insurance this year is hitting us hard,” Johannes Neckermann, who sits on a condo board on Singer Island, said.
The rate hikes are not only hitting condo owners but also condo associations, which then pass on the costs to the condo owners.
“We raised this year the rate on unit owners just to afford the insurance,” Neckermann said.
He said in some cases the costs were up 40% over last year.
Florida property owners are already paying the most in the country for insurance, and it’s only getting worse.
Many condo owners are just discovering this, especially the part-time residents who are now arriving for the winter months.
“There’s a little bit of a sticker shock for people who don’t follow Florida year-round,” Robert Norberg of Arden Insurance in Lantana said.
Experts said there are several reasons for the increase in rates, all of which are making it very tough for insurance companies to stay afloat.
“It’s been several years of claim problems, and things like, that impact associations, as well as individual unit owners, plus now the Surfside [condo collapse in 2021], plus the issues with recent hurricanes,” Norberg said. “They’re all taking losses, and it hits not only the unit owner but the association in a big way.”
Condo owners are getting hit twice on those fees and then with their own insurance going up.
As with homeowners, it’s likely to drive condo dwellers to the state-run Citizens Property Insurance, which is already ballooning with more than a million policies.
Florida lawmakers are supposed to meet Dec. 12 for a special session on fixing the insurance issues, but there are no promises anything can be fixed quickly.
“They can’t force insurance companies to charge,” Norberg said. “The only thing they can do is help regulate the rates of admitted carriers.”
By Eric Glazer, Esq.
It has always been difficult to get volunteers to be on the Board of Directors. Even when times are good and the building has made repairs and has some money in the bank, you can never count on owners to volunteer their time for a position where on their best day they will be second guessed and criticized. It’s always touch and go as to whether an election will even be required in most condominiums because there won’t be enough volunteers. Maybe it’s because the job doesn’t pay too much.
Well, if you thought it was hard to get volunteers for the Board before, you ain’t seen nothing yet. Members of Boards starting in 2025, and perhaps some Boards getting a jump on the new laws know that they certainly won’t be winning any popularity contests by serving on the board, especially when they prepare the association’s annual budget. These new Board members will be the ones who have to tell the members of the community that their monthly assessments are about to skyrocket due to:
These board members will need to sit behind barbed wire and Police “Do Not Cross” tape during the budget meeting. They will probably want to be escorted to their units after the meeting by security. Bottom line is they are going to be facing hostile crowds.
Let’s say they make it back to their unit and still wish to remain on the Board. Now the fun begins. These board members will have to hire the architects, hire the engineers, hire the contractors, make sure the repairs get made and pay all of the association’s massive bills. They may also have to negotiate a loan from a local bank so that everyone doesn’t have to come out of pocket for all the repairs. Of course they will also still have the usual responsibilities of Board members such as attending meetings.
So who in the world is going to want to serve on the Board in 2025 when all of these new laws go into effect? Why would anyone stick their neck out so far? Well, if you were always a board member, you may not be scared of the responsibilities to come. On the other hand, if you were shy of becoming a board member before, I don’t doubt that you’re going to remain the same and stay away. It’s going to get tough ladies and gentlemen. But will the tough get going and make the association’s Board the best it can be?
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I think last night’s 60 Minutes episode made it clear that for some, living in their condominium unit may simply become unaffordable. The question is……which condos will suffer the most and which other forms of housing are most likely to retain their values and even go up.
Everyone is freaking out that all condominium living will soon become insanely unaffordable but that simply isn’t true. Remember, these new inspection laws only kick in after 25 years if your condo is on the beach or within 3 miles of the coast. They don’t kick in for 30 years for all other condos. So, if your condo is new, these new inspections may not apply to you for decades. Relax.
What else do we know? Full funding of reserves start in 2025 and they can’t be waived. Does that spell doom and gloom for everyone? Not necessarily. If your condominium has always been doing the right thing and has been fully funding reserves, these new laws requiring the full funding of reserves may not have a financial effect on you at all. On the contrary, if you have been living in a condominium that has been waiving reserves for years, or even decades, you are in trouble. You have a lot of catching up to do. But what did you expect? You were never putting away money for future repairs? Did you think your building would never need repairs? If it did need repairs, did you think these repairs would magically be paid?
Remember, these mandatory inspections, mandatory repairs and mandatory reserves only apply to condominiums of 3 stories or more. So obviously, if your condominium is under three stories, you won’t be subject to mandatory inspections or mandatory reserves. Something tells me, your home will be in high demand.
Of course, if you live in an HOA, the new inspection and reserve laws won’t apply to you either. No doubt in my mind, condo dwellers will soon be looking to switch to the HOA way of life.
If you live in one of those condos above 3 stories that is 30 years of age or older and never reserved a dollar, it’s going to be hard to sell your unit. Buyers are more educated now and realize they would be buying into a financial nightmare. If you want to sell, your price will definitely have to factor in, what the new buyer is about to pay for those inspections and repairs.
On the contrary, people who own condos under 3 stories or who live in HOAs will be in the driver’s seat as none of these costs will be passed on to their potential buyers.
I’m no realtor……..but this is how I see it.
We recently held an educational webinar with the Brickell Homeowners Association and Siegfried Rivera to discuss why a preventive maintenance plan is a critical aspect of any association’s operation.
click on the picture below and watch the video. or click here.
Disclaimer: This video is for educational purposes only. You will not receive credits for watching the recording. Credits were issued only to those that attended the course.
brought to us by, Campbell Property Management
Tags: Board of Directors