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Front Page » Top Stories » New Condo Law Empowers Homeowners Buyers

New Condo Law Empowers Homeowners Buyers

Written by on August 27, 2004

By Marilyn Bowden
Changes to state laws governing condominium and homeowners associations will give homeowners more say in how their associations are run, experts say, and provide assistance for the settlement of disputes between owners and boards.

The new laws, signed by Gov. Bush in June, will take effect Oct. 1, said Monte Kane of accounting firm Kane & Co., which works with condo communities in Brickell, Aventura and Boca Raton.

The most significant change in the law, he said, is the creation of a condo ombudsman in the Division of Florida Land Sales, Condominiums & Mobile Homes.

"The ombudsman, who will be appointed by the governor, must be an attorney admitted to practice in Florida," Mr. Kane said, "who will act as liaison between the division, unit owners, boards of directors, managers and others and assist them in understanding their rights and responsibilities."

The ombudsman will mediate disputes, monitor and review election procedures and make recommendations for changes to the rules, he said.

The statute also creates a seven-member Advisory Council on Condominiums to serve as a receptor for public feedback and an advisor to the division, said Nancy Campiglia, an attorney who specializes in condo law.

It also reinstates a requirement that owners who sell their units must provide buyers with the same Frequently Asked Questions form the division requires of developers, she said.

"The questions addressed here are basic but important," Ms. Campiglia said, "such as the amount of the monthly or quarterly maintenance fee."

Investors who purchase units intending to rent them out are protected from retroactive amendments to condo documents restricting renting, she said. "This provision adds certainty to the purchaser or owner who purchases relying on the ability to rent the unit in the future."

A greater number of changes were made to the statute governing homeowners associations, said Tony Kalliche, executive vice president at Continental Group, a firm managing about 425 Florida condo and homeowners associations.

"Condo law has been in existence for a much longer period of time," he said, "but the Homeowner Legislation Statute is in its infancy. The changes there incorporate many protections that already exist in condo law."

A task force created by the Department of Business and Professional Regulation at the request of Gov. Bush held public hearings across the state before recommending changes to the law, said Ms. Campiglia, who was then the department’s general counsel.

"We were surprised at some of the very strong stories coming out of these meetings about how some board members were treating owners," said Continental President Richard Strunin. When a community is professionally managed, he said, "it’s looked upon differently in terms of compliance."

Disclosure requirements at time of resale mirror those reinstated on the condo side, Ms. Campiglia said.

Mr. Kane said the area of financial reporting is one example of homeowner laws catching up to condo law.

"The statutes now require that associations of more than 50 homes with annual revenues of $100,000 to $200,000 must have statements compiled by a CPA," he said, "Those with $200,000 to $400,000 in revenues have to be reviewed by a CPA annually, and those with revenues over $400,000 must be audited."

If 20% of the owners request it, Mr. Kane said, the level of financial recording can be higher than that required by law.

"This is another cost associations will have to anticipate in their budgets," he said. "The only difficulty is that it has to be done within 60 days after year’s end. That’s next to impossible. Condos permit 90 days. They will probably need to make a change next year to be consistent."

Ms. Campiglia said the changes provide protection to parcel owners from Strategic Lawsuits Against Public Participation by prohibiting suits against parcel owners who address matters concerning their homeowners’ associations before governmental entities.

An important addition for homeowners, she said, is a series of provisions empowering them to rein in unresponsive directors.

"A lot of the changes were prompted by a certain sense of frustration," Mr. Kalliche said. "Boards weren’t responsive."

Notice of board meetings must now be sent not less than 14 days prior to the meeting date, Mr. Kane said, and a new clause protects the right of all residents to attend meetings and to speak for at least three minutes on any item on the agenda.

Conditions and procedures have been created, Ms. Campiglia said, for the recall of abusive directors.

"The changes to both statutes," she said, "appear to provide more rights to the unit and parcel owners and to purchasers than have existed in the past."