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.
Property managers and their respective management companies are now required to disclose “conflicts of interest” at the condo projects they oversee in Florida.
Failing to do so could lead property managers and/or their management companies to face a variety of penalties, including formal reprimands, suspension or revocation of their licenses and fines up to $5,000 per incident.
As part of the new Florida legislation, condo associations can now “cancel” management contracts without facing “termination fees, liquidated damages, or other form of penalty for such cancellation.”
The dollar-amount threshold for the “conflicts of interest” to apply is less than $3,000.
The new disclosure requirement was added to the Florida condo law as part of the 2024 revisions made during the recent legislative session in March. Florida Gov. Ron DeSantis (R) signed the bill in June, clearing the way for the law to take effect in July 2024.
The measures are part of an ongoing effort by the Florida legislature in the aftermath of the Champlain Towers South condo collapse in the barrier island town of Surfside on June 24, 2021, to bring more transparency to condo associations, which have a reputation for being shrouded in secrecy, intimidation and corruption.
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.
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 studies 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 expected to result in significantly higher costs for unit owners.
Some industry watchers have compared it 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.