Condo owners in South Florida are threatening to sue.

Tallahassee

Gov. Ron DeSantis quietly signed a controversial condo bill Friday whose owners have threatened to sue if lawmakers don’t amend some of its provisions during the next legislative session.

The 154-page bill HB 1021primarily to create more liability for condo owners associations and managers. Added later This year there are other Different bills The bill, which gives developers greater control over common areas of mixed-use buildings, such as where residential units share a site with a hotel, will become law on July 1.

Mixed-use apartment buildings are growing in popularity as retirees look to settle in resort-style buildings operated by established hotel brands, such as the Ritz-Carlton in Bal Harbour and the Carillon in Miami Beach.

The combination of these commercial and residential developments has led to unusual legal disputes over who has control over the properties.

Lawyers representing developers argued that in mixed-use buildings, developers and hotel owners must control common spaces such as lobbies, pools, restaurants and elevators because they need to ensure those areas meet their standards.

Stevan Pardo, an attorney who has represented condo owners in high-profile cases such as the Miami Beach Carillon dispute — where residents and hotel and spa owners have battled in court for years over ownership of common areas — disagrees that developers will do a better job managing the properties than condo associations, which he said have more personal investments in the properties but often delegate management of the properties to licensed professional organizations.

“Imagine living in an apartment building and all you own is the air rights to your unit. You don’t own your front door. You don’t own or control or maintain your lobby, your elevators, your hallways, none of that. All of that is controlled by the developer, and they can control it forever,” Pardo said. “It doesn’t make any sense.”

Pardo also said he believes the bill could be applied more broadly to purely residential buildings, giving developers control over everything except the apartment 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 ultimately added to HB 1021, wrote in an email to the Herald that Pardo’s reading of the bill was wrong.

“The fundamental reason why Mr. Pardo’s assertion is incorrect is that there is simply no reason for a developer to want to retain ownership and control over what are typically common elements of a residential apartment,” Grant said.

“In residential condominiums, developers want to sell all the units, and after 90 per cent of the units are sold, the developer no longer wants to have anything to do with the common parts,” he added. “There is no profit motive to keep control of them… operating the common parts is just a burden.”

Grant said that under the new law, mixed-use apartment buildings “must have a disclosure summary that outlines its structure and informs the buyers association that it will not control the building. Buyers are free to choose to purchase a unit in such a product or not.”

“As for the assertion that the (Pardo) association is better equipped to maintain the structure of the building, I point to the Surfside tragedy as an example of how that is inaccurate,” Grant said. After the 2021 collapse of the Champlain Building in Surfside, lawmakers concluded that some of the blame lay with the condo association, which delayed structural repairs to the building. In 2022, they updated the law to require a structural integrity reserve study detailing how much money the association would need to set aside for those repairs.

The question of who controls common spaces — condo owners and their associations or developers — has been at the heart of several lawsuits in South Florida, with courts recently ruling in favor of condo owners. A late-stage addition to HB 1021 would change that, potentially upending ongoing lawsuits because it would be retroactive.

After the Herald/The Times The final story In response to the controversial provisions in HB 1021, a condo association president with a vested interest in the matter attempted to contact the bill’s sponsor, Rep. Vicki Lopez, R-Miami. Richard Ortoli is the president of the condo association that is suing Epic Hotel, which controls the high-end Epic Residence Downtown Miami, for allegedly overcharging for shared facilities.

Ottoli told the Herald the owners paid too much to renovate shared spaces in the building, such as the hotel lobby, without making any profit.

“This practice of arbitrarily allocating fees, even when they are set out in the condo documents, is extremely abusive,” Ortoli said.

Ottoli was unable to reach Lopez but met remotely with her staff on May 22 to discuss his concerns. Two days later, Ottoli sent a follow-up email to staff, copying the Herald. The meeting did not appear to have gone well, according to the email.

“Without any meaningful explanation from Congresswoman Lopez as to why we are defending these provisions, she will inevitably be embroiled in a controversy that will do nothing to enhance her reputation as a champion of condo owners’ rights in Miami and the rest of Florida,” Ortoli wrote to Lopez’s legislative assistant, Alessandro Marchesani.

Lopez could not be reached for comment. Her aide, Marchesani, said in an email that she is “currently flying to Israel and will return in early July to speak on HB 1021.”

On June 11, Ottoli emailed the Herald with an update.

“We hope that the more egregious provisions of HB 1021 can be addressed through amendments. If the law is not changed, prosecution is certainly an option,” Ottoli wrote.

This article was originally published on June 14, 2024, 5:36 pm.