DeSantis quietly signs controversial condominium bill. Owners are already threatening to sue

Governor Ron DeSantis on Friday quietly signed into law a controversial condominium bill that unit owners are already threatening to sue if lawmakers don’t fix certain provisions in the next legislative session.

The 154-page bill, HB 1021, it is largely about creating more responsibility for condominium owner associations and managers. But added at the end of the process this year there were other provisions of a different account which gave developers greater control over common areas in mixed-use buildings where, for example, residential units share facilities with a hotel. The bill will become law on July 1.

Mixed-use condos are becoming increasingly popular as retirees look to settle into buildings managed as resorts by prominent hotel brands such as The Ritz-Carlton Bal Harbor and the Carillon in Miami Beach.

The combination of these commercial and residential developments has created unusual legal disputes over who controls what on the property.

Lawyers on behalf of developers argue that it is essential in mixed-use buildings that the developer and hotel owners control common spaces, such as the lobby, pool, restaurants and elevators, because they need to make sure that These areas are up to your standards. .

Stevan Pardo, an attorney who represents condo owners in high-profile cases like the Miami Beach Carillon dispute — where for years residents and the hotel and spa owner fought in court over who owns the common areas — disagrees that Developers would maintain better care of the property than the condominium association, saying associations are more personally invested in the property, but often delegate management of it to licensed professional organizations.

“Imagine you are living in a condominium and all you own are the air rights to your unit. You don’t own your front door. You have no right to own, control, or maintain your lobbies, elevators, hallways, any of that. All of this is controlled by a developer, and they can control it forever,” Pardo said. “Does not make sense.”

Pardo also said he believes the bill could be applied much more broadly, even to purely residential buildings, giving developers control of everything except the condominium units themselves.

But Mark Grant, a real estate attorney and consultant for the Hotel Carillon in the Miami Beach dispute whose idea it was to make the specific changes that were eventually added to HB 1021, wrote to the Herald/Times in an email that Pardo was mistaken in his reading of the bill.

“The bottom line as to why Mr. Pardo’s statement is not correct is that there is absolutely no reason why a developer would want to retain title to and control what are normally common elements in a residential condominium,” Grant said.

“In a residential condominium, the developer wants to sell all the units and after 90% of the units have been sold, the developer no longer wants anything to do with the common elements,” he added. “There is no profit incentive to maintain control of them…operating the commons is just a burden.”

Grant said mixed-use condominiums under the new law “must have a disclosure summary that summarizes the structure and informs buyers that the association will not control the building. The buyer is free to purchase or not a unit of this type of product.”

“As for [Pardo’s] statement that the association is better able to care for the structure, I give the Surfside tragedy as an example of why this is not accurate,” said Grant. After the collapse of the Champlain Towers in Surfside in 2021, lawmakers concluded that part of the blame lay with the condominium association, which delayed structural repairs to the building. In 2022, they updated the law to require structural integrity reserve studies that detailed how much money associations needed to set aside for these repairs.

The question of who controls common spaces – the condominium unit owners and their associations or the developer – has been at the center of several lawsuits in South Florida, with courts recently ruling in favor of the unit owners. The newly added provisions to HB 1021 would change this dynamic, threatening to nullify lawsuits still working their way through the courts because they apply retroactively.

After the Herald/Times’ last story ran regarding these contested provisions in HB 1021, a condominium association president with an interest in the matter attempted to contact the bill’s sponsor, Representative Vicki Lopez, a Miami Republican. Richard Ortoli is president of the condominium association that is suing the Epic Hotel, which controls the high-end segment Epic Residences in Downtown Miami over alleged excessive charges for shared facilities.

Ortoli told the Herald/Times that unit owners were footing a very large portion of the bill to renovate shared spaces in that building, such as the hotel lobby, and not making any profit.

“This arbitrary allocation of expenses, even though provided for in the condominium documents, is extremely abusive,” said Ortoli.

Ortoli was unable to reach Lopez, but met remotely with his team on May 22 to discuss his concerns. It didn’t appear to have gone well, according to a follow-up email Ortoli wrote to his staff two days later, in which he copied the Herald/Times.

“We have received no meaningful explanation from Rep. Lopez as to why she defends these provisions and she will inevitably become embroiled in a controversy that will do nothing to improve her reputation as a defender of the rights of condominium owners in Miami and elsewhere in Florida.” , Ortoli wrote to López’s legislative advisor, Alessandro Marchesani.

Lopez could not be reached for comment. His advisor, Marchesani, said in an email that he was “currently flying to Israel and will return in early July to talk about HB 1021.”

On June 11, Ortoli emailed an update to the Herald/Times.

“We are hopeful that the most egregious provisions of HB 1021 will be addressed through amendments,” Ortoli wrote. “If the law is not changed, suing will definitely be an option.”