Florida Condo Reform Could Open 'Floodgates' of Litigation
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Florida condominium law reform, which took effect on July 1 after being signed into law by Governor Ron DeSantis, could open the "floodgates" for litigation and audits that had previously been impossible to pursue, a local attorney told Newsweek.
The legislation, HB 913, was introduced to provide immediate relief to condo associations and owners struggling with rising fees resulting from new safety requirements introduced in the wake of the Surfside collapse in 2021.
However, it also aimed to create more transparency in processes that have, until now, been murky and difficult to navigate for many condo owners, as has been the case with the setting of fees paid by those living in condo-hotels.
More Transparency for Florida Condo-Hotels
Condo-hotels are properties where individual units are privately owned, but the entire building is operated as a hotel, a common setup in Florida, especially along the coast.
This type of arrangement offers several benefits to owners, including the opportunity to live in a luxurious vacation property while paying a more affordable price and potentially making a profitable investment. However, it is also plagued by problems, including limited control owners have over the building's management and the financial burden of paying common area fees.
Luxury hotels and apartment buildings in Sunny Isles Beach, Florida, as seen on March 8, 2022.
Luxury hotels and apartment buildings in Sunny Isles Beach, Florida, as seen on March 8, 2022.
CHANDAN KHANNA/AFP via Getty Images
The new law aims to increase transparency in the management of condo-hotels, requiring financial reports on the cost of maintaining shared areas to be provided to condo owners within 60 days after the end of each fiscal year.
Crucially, it has introduced changes that, according to Stevan J. Pardo, founding partner at Pardo Jackson Gainsburg & Shelowitz and a leading authority on Florida construction and corporate hospitality law, "may represent the only opportunity for many condo associations, particularly those in mixed-use hotel/condo projects, to revisit years of potentially improper shared facility assessments."
A Looming Explosion Of Litigation
The new law provides a clear statutory basis for unit owners to seek accountability from developers and hotel operators who have historically retained disproportionate control over shared expenses, according to Pardo.
"Associations can now seek declaration of their condo unit owner rights and seek damages for over-assessments caused by these unlawful structures," Pardo told Newsweek.
Under HB 913, condo associations now have a three-year statute of limitations from the effective date to bring claims related to financial overcharges and the improper classification of common elements. Failure to act within this window could permanently bar associations from asserting their rights or recovering unlawful assessments.
These new requirements, including this relatively tight deadline, could trigger an explosion of litigation across the state as condo associations begin to reassess governing documents, assessment structures, and recorded declarations, Pardo said.
"We do expect the floodgates to open now that the governor has signed HB 913 and allowed associations and its members to once again sue developers/hotel owners who control all of the common areas of condominium properties and who unlawfully assess unit owners," he said.
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