Wednesday, March 23, 2011

Is the Florida Legislature About to End Condo Dispute Arbitration?

(Editor's note: Florida has state licensing of condominium managers and arbitration of owner and board disputes. New proposed legislation would dismantle this system. This article recently appeared in the Fort Lauderdale Sun Sentinel)

By Daniel Vasquez 

A new Florida bill seeks to deregulate condominium community association managers and dismantle the state's arbitration system for settling owner and board disputes out of court.

What would that mean? Community association managers and companies, which often manage the finances and day-to-day operations of communities, would no longer be required to be licensed by the state or report crime convictions to state officials, critics say. In other words, virtually anyone - regardless of qualifications or criminal background - could become a manager in charge of what could be millions of dollars worth of property and assets.

In addition, condo owners and board members would be left with fewer consumer protections and assistance at a time when such communities face dire financial times because of widespread foreclosures and a down real estate market. It would also mean the end of the agencies charged with enforcing state condo laws and educating owners and board directors. The state does not have such regulatory boards for homeowners associations.

"The bill itself is total chaos," said Jan Bergemann, president of the Cyber Citizens for Justice, the state's largest grass-roots community association advocacy group. "In short, it removes what little enforcement of Florida statutes there ever was."

The changes are proposed as part of House Bill 5005, which aims to trim
government agencies and resources in general. It would also eliminate
regulation of auctioneers, talent agents, home inspectors, mold assessors,
movers, geologists and other professionals. It originated in the Economic
Affairs Committee and was approved by House Speaker Dean Cannon, R-Winter

"This legislation proposes to repeal licensing and examination requirements
and penalties for numerous specified professions, occupations, and
businesses currently regulated by the state," said Katherine Betta,
spokeswoman for Cannon. "By approving this bill, the speaker indicated his
overall support of the concept, but now it is the work of the various
committees to ultimately determine which items should be included before the
bill comes to the House floor."

If passed as is, the bill would shut down the Division of Florida
Condominiums, Timeshares and Mobile Homes, the consumer protection agency
that enforces community association law (with the exception of homeowner
communities). It would also close the Office of the Condominium Ombudsman,
which seeks to educate owners and board members on state condo, co-op and
timeshares laws via phone calls and/or free or low-cost classes open to the
public. The legislation would also end the division's arbitration system.
Florida law currently requires parties involved in owner and board of
director disputes to meet in arbitration before a lawsuit can be filed.

That would go away, sending disputes to attorneys and judges, experts say.

"The judiciary has enough on its plate with the foreclosure crisis, budget
cuts, staff cuts, etc., as well as what looks like additional budget cuts
coming this year," said Howard J. Perl, an attorney with the community
association law firm Katzman, Garfinkel and Berger, who tracks such
legislation. "If this bill is allowed to become law, this will potentially
add thousands of cases to a judicial system that is already overburdened,
underfunded and understaffed."

(Ed: Our thanks to Patrick Hohman for providing this article)

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