Condo Association Corruption Targeted By New Florida Laws
This latest issue of the Miami Condo Market Intelligence Report? on LinkedIn is the fourth of a seven-part series examining dramatic changes coming as a result of the Surfside condo collapse.
LinkedIn Volume 2024, Issue 24 (Subscribe here)
Welcome to the 24th LinkedIn issue of the Miami Condo Market Intelligence Report With Peter Zalewski?.
In this week’s Miami Condo Market Intelligence Report? newsletter, we explore some of the new Florida laws that went into effect this month (July 2024) that are aimed at stomping out corruption at condo associations in the Sunshine State.
Board members, property managers and management companies, alike, now face a wide range of sanctions ranging from criminal charges to fines, license revocation to removal from office for offenses such as accepting or soliciting kickbacks, not disclosing conflicts of interest and refusing to share information with unit owners.
The new laws are part of the 2024 revisions adopted by the Florida Legislature in March, signed by Florida Gov. Ron DeSantis (R) in June and went into effect in July 2024.
For context, there are about 13,000 condo associations with nearly 610,000 units located in the tricounty South Florida region of Miami-Dade, Broward and Palm Beach.
This is the fourth of a seven-part series examining the repercussions of the collapse of the Champlain Towers South on the barrier island in Miami-Dade County on June 24, 2021.
Nearly 100 people died and a $1 billion settlement was reached with the families of the victims.
A federal investigation is currently underway but the preliminary reports suggest a flawed design coupled with a lack of upkeep by the condominium’s association contributed to the disaster.
The Florida Legislature has taken a number of steps - prompted by insurance companies threatening to withdraw coverage in the state - to ensure that nothing like this ever happens again by bringing more clarity to condo associations, which have a reputation for being shrouded in secrecy, intimidation and corruption.
Up until now, the state’s measures were being implemented slowly but that all changes in 2025.
As part of the changes, condo boards are preparing for a recently passed Florida law that goes into effect in January that requires associations to hire experts to conduct Structural Integrity Reserve Studies (SIRS) of their respective buildings and then begin funding the necessary work in or before 2025. Associations can no longer defer the work and the cost.
People are dubbing this moment as the 2025 Condo Association Financial Cliff as it is expected to result in significantly higher costs for unit owners.
Florida Rep. Vicki Lopez (R - District 113) told WLRN’s “Florida Roundup” host Tom Hudson during the June 28, 2024 episode that South Florida’s condo market is facing a serious threat.
She said an overwhelming number of Greater Downtown Miami condo associations are not ready for the 2025 deadline, sellers are already “dumping” units at deeply discounted prices and investors would be wise not to buy in Florida until 2026.
Some industry watchers have compared the Surfside disaster to an inflection point on par with the Category 5 Hurricane Andrew that devastated South Miami-Dade County in August 1992.
Since the 2021 collapse, older units are said to be tougher to sell, insurance prices are spiking year-over-year and association maintenance fees and special assessments are squeezing owners to the brink.
Given that we are less than six months out from the Condo Association Financial Cliff, we at the Condo Ratings Agency? have spent the last four weeks doing a deep dive into the South Florida stats, state laws and outlook for condo towers in Miami-Dade, Broward and Palm Beach counties.
After this week’s newsletter, we are planning to spend three more weeks focusing exclusively on the Condo Association Financial Cliff.
All of the reports and accompanying charts are based on research we conducted using our proprietary information, private records and government statistics.
Our first story this week focuses on the broadening of the Florida Condo Law to allow association directors, officers and managers to be charged with third-degree felonies and assessed fines for violations.
In the second story, we examine how the law now forces property managers and their respective management companies to disclose “conflicts of interest” or face a variety of penalties. Failure to do so can result in the termination of management contracts without penalties for the condo associations.
For the third story, we detail how the law spells out what essential information must be collected and made available to unit owners at their request.
For the fourth story, we discuss a new law that requires condo associations to hold quarterly meetings that are open to the unit owners and allows them to ask questions in an effort to bring transparency to the inner workings of the communities.
It is a lot of information but we are confident our reports will assist you to better understand current market conditions in South Florida.
It is worth noting that we are sharing a portion of our research for free with subscribers to our newsletter and readers of CondoVultures.com. If you want access to all of our published information and charts, we would encourage you to join the newly launched Miami Condo Market Investing Club?.
The objective of the Club is to create a community that shares realtime, actionable information on the latest real estate trends, opportunities and service providers in South Florida.
The Club is also ideally suited for Do-It-Yourself (DIY) condo buyers who can rely on our latest statistics, expert opinions and access to consulting services.
Additionally, we encourage you to listen or view our podcast wherever you get podcasts. The podcast is available on Apple, Spotify and/or YouTube.
As a reminder, we are always available for consulting, expert witness work and buyside brokerage services just as we have been since 2006. If you want more information, please visit CondoVultures.com or call the office at 305.865.5859.
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Story 1
Florida Puts Condo Boards On Notice: Accepting Or Soliciting 'Kickbacks' Is A Felony
In the aftermath of the Surfside condo collapse, the Florida Legislature has made a number of changes to the state's condo law in 2024. This is one of the changes.
Story 2
Florida Wants Property Managers To Disclose 'Conflicts Of Interest' To Condo Association Boards
In the aftermath of the Surfside condo collapse, the Florida Legislature has made a number of changes to the state's condo law in 2024. This is one of the changes.
Story 3
Florida Condo Boards Risk Sanctions If Fail To Share Records With Owners, Renters
In the aftermath of the Surfside condo collapse, the Florida Legislature has made a number of changes to the state's condo law in 2024. This is one of the changes.
Story 4
Florida Condo Boards Must Now Hold Open Meetings, Take Questions From Owners
This is the first part of a four-part video series where an AI-generated voice narrates the revisions made during the 2024 Florida legislative session.
This information is believed to be accurate and complete but cannot be guaranteed or warranted.
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