Monday, March 21, 2011

Where will the funds in the Division Trust Fund go?

I just received verification that the current cash balance in the Division Trust Fund as of Friday, March 18, 2011, is $9,802,864.06.

Section 718.501 of the Condominium Act provides as follows:

Each condominium association which operates more than two units shall pay to the division an annual fee in the amount of $4 for each residential unit in condominiums operated by the association. If the fee is not paid by March 1, the association shall be assessed a penalty of 10 percent of the amount due, and the association will not have standing to maintain or defend any action in the courts of this state until the amount due, plus any penalty, is paid.

Section 719.501(2)(a)of the Cooperative Act provides the same thing.

If HB 5005 passes with the community association provisions intact, the Division will be eliminated and we have been told that the almost $10 million in the Trust Fund will go into the State's General Revenue. In addition, if HB 5005 passes with the condominium provisions intact, 118 full-time Division employees will lose their jobs.

Currently, the Division is organized under two units: the Bureau of Standards and Registration and the Bureau of Compliance. The Bureau of Standards and Registration reviews and approves all public disclosure documents prepared by those who offer condominiums, cooperatives, timeshares and leased spaces in mobile home parks for sale to the public. The Bureau of Compliance ensures compliance with statutory and administrative rule requirements, primarily through the receipt and resolution of complaints filed with the Division. The Division has offices in Tallahassee, Tampa, Orlando and Ft. Lauderdale to carry out these functions.

Currently, the Division defines disputes eligible for arbitration as any disagreement between two or more parties and the authority of the board of directors or the association's governing documents. Disputes involving the board's failures related to elections, properly noticing meetings, properly conducting meetings and allowing inspection of the association's books and records.

I have been told that some association attorneys out there are actually in favor of deregulating the Community Association Management industry as well as eliminating the Division's arbitration function. That makes sense since both cut down on the number of cases that wind up in court. Take away the oversight and the alternative dispute resolution and you are forced to resolve these matters in court.

My law firm and our Community Advocacy Network (CAN) strongly oppose both attempts at deregulation for associations and managers since the most vulnerable communities will be the ones hardest hit should this bill pass.

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

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