20170301 AM2MIAMIBEACH
City Commission Meeting
ADDENDUM MATERTAL 2 (2127t2017)
Gity Hatt, Commission Ghambers, 3'd Floor, 1700 Gonvention Genter Drive
March 1,2017
Mayor Philip Levine
Commissioner John Elizabeth Alem6n
Commissioner Ricky Arriola
Commissioner Michael Grieco
Com missioner Joy Malakoff
Com missioner Kristen Rosen Gonzalez
Com missioner Micky Steinberg
City Manager Jimmy L. Morales
City Attorney Raul J. Aguila
City Clerk Rafael E. Granado
Visff us at www.miamibeachfl.gov for agendas and video "streaming" of City Commission Meetings.
ATTENTION ALL LOBBYISTS
Chapter 2, Article Vll, Division 3 of the Gity Code of Miami Beach entitled "Lobbyists" requires the
registration of all lobbyists with the City Clerk prior to engaging in any lobbying activity with the City
Commission, any City Board or Committee, or any personnel as defined in the subject Gode
sections. Copies of the City Code sections on lobbyists laws are available in the City Clerk's office.
Questions regarding the provisions of the Ordinance should be directed to the Office of the City
Attorney.
ADDENDUM AGENDA
C4 - Commission Commiftee Assiqnments
C4 O REFERRAL TO THE NEIGHBORHOOD/COMMUNITY AFFAIRS COMMITTEE TO DISCUSS
PILOTLESS DRONE TAXIS.
Vice-Mayor Kristen Rosen Gonzalez
Addendum added on 212712017
C4P REFERRAL TO THE FINANCE AND CITYWIDE PROJECTS COMMITTEE AND TO THE
N E IGH BORHOOD/COMM UN ITY AFFAI RS COMM ITTEE TO EXPLORE PLACI NG CAMERAS ON
EVERY CORNER OF THE MXE (MIXED USE ENTERTAINMENT) DISTRICT AND ON THE
BEACHWALK, AND INSTALLING EMERGENCYACTIVATION BOXES ALONG THE BEACHWALK.
Vice-Mayor Kristen Rosen Gonzalez
Addendum added on 2127 12017
1
Addendum 2, March 1,2017
C7 - Resolutions
C7 P A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,
FLORIDA, SUPPORTING AMENDMENTS TO FLORIDA'S CONDOMINIUM ACT, CODIFIED IN
CHAPTER 718 OF THE FLORIDA STATUTES, AND IN RELATED STATUTORY PROVISIONS,
CONSISTENT WITH THE RECOMMENDATIONS OF THE MIAMI.DADE COUNTY GRAND JURY,
TO PROTECT CONDOMINIUM OWNERS AND RESIDENTS IN THE STATE OF FLORIDA.
Office of the City Attorney
Commissioner John Elizabeth Aleman
Addendum added on 212712017
R9 - New Business and Gommission Requests
R9 X DISCUSSION/UPDATE ON THE PROGRESS MADE BYTHE ADMINISTRATION TO IMPLEMENT
TROLLEY SERVICE FROM MIAMI BEACH TO THE WYNWOOD AND MIDTOWN
NEIGHBORHOODS.
Vice-Mayor Kristen Rosen Gonzalez
Addendum added on 212712017
R9 Y REPORT ON THE $3.6 MILLION THAT WERE ILLEGALLY TRANSFERRED FROM A CITY
ACCOUNT AT SUNTRUST BANK.
Vice-Mayor Kristen Rosen Gonzalez
Addendum added on 212712017
2
Commission Committee Assignments - C4 O
MIAMI BEACH
COMMISSION MEIIJORAN DU M
TO: Honorable Mayor and Members of the City Commission
FROM: Mce-Mayor Kristen Rosen Gonzalez
DATE: March 1,2017
SUBJECT: REFERRAL TO THE NEIGHBORHOOD/COMMUNITY AFFAIRS COMMITTEE TO
DISCUSS PILOTLESS DRONE TAXIS.
ANALYSIs
Dubai has announced that it is to test passenger-carrying drones in its skies by July 2017.The
unpiloted drone taxis will be able to carry one passenger, who together with luggage cannot
weigh more than 220 pounds.
Additionally, the state of Nevada has cleared the world's first passenger-carrying drone for
testing. The craft is the same as the one being introduced in Dubai.
As a City that suffers from traffic gridlock, Miami Beach should consider this technology to
improve traffic congestion.
Attached please find an article trom The Economist, dated February 17 , 2017, titled "Dubai is
to test passenger-carrying drones" that will provide additional information.
The article may also be viewed at:
http ://www.econo mist.comlblogslg ulliverl20 1 7 I O2lta><i-take-0
Legislative Tracking
Vice-Mayor Kristen Rosen Gorvalez
AfiAGHMENTS:
Page 137 of 1120
3
Description
o Micle - The Econornist
Page 138 of 1120
4
Taxi for take off
Dubai is to test passenger-carrying drones
The future for commuters is looking up
ffi,-'il* -a
wffi
Gulliver Feb 1 7th 7017 by A.w.
AT TIMES it can feel like we are living in an episode of "Travel Futurama". This week:
flying drone taxis.
Dubai, a city that sometimes seems to inhabit a time zone five years ahead of the rest of
2j27i17,1t1C6 Al\,
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Page 139 ol 1120
5
the planet, has embraced another improbable travel innovation, to go alongside its
enthusiasm for hyperloop trains
(http://www.economist.com/blogs/gulliver/zor6lrrlloop) and long driverless metro
lines. This week, the Emirati metropolis announced
$rttp:{/.1*rjyw.S:"*J,:eq-i5:,,:om1_*,,:X,s/u*:.i.r}es:#rticl::lzls?#-s+.1t{*}) it is to test
passenger-carrying drones in its skies by luly.
The unpiloted drone taxis won't exactly replace the traditional earthbound sort, since
they will be able to carry only one passenger, who together with luggage cannot weigh
more than roo kilograms (zzo pounds). And it will have a range of just 5o kilometres $r
miles), or half an hour of flying time. But if it works, the long-term implications are
huge not only for Dubai, which has among the world's dead_1iesl.l9ad:
(https://www.theatlantic.com/international/archive/zorrllolwhy-are-dub3i-and-abu-
dhabis-roads-some-of-the-worlds-most-dangerous/2468r6/) , but also for congested
cities around the world. While others sit bumper-to-bumper, a passenger in these new
drones willbe able to cruise above the gridlock at an average speed of roo kilometres an
hour (62 miles an hour).
That might seem like a desert mirage, but the concept has already sprung up elsewhere,
if only as an aspiration. In June, the American state of Nevada cleared the world's first
passenger-carrying drone for testing. The craft is the same one being introduced in
Dubai, the Chinese-made Ehang r84, a compact pod with four dual-propeller extensions
that navigates by using sensors. At that time, many were quick to pronoqnqg
(hlfps:4.y.*iy.thes,'yardiq*,.:pm/*Scllno_loHl/zo.:0/jun_lgslwg*l]ds*r:,I-g*s.:S,r-IggJ;*ro1"9;
testing-ehang-nevada) that the widespread adoption of such vehicles was still a long
way off. Success in Dubai could accelerate things dramatically.
Ditching the pilot goes a step beyond the blue-sky thinking taking place at another
transport innovator, Uber. In October, the ride-hailing flrm released
thttp:/iwww.economist.com/blogs/gulliver/zor 6l:rrlnew-way-over!49la 97-page white
2i27!1/', 1O:tO AM
Paqe 2 (}l 3
http:llrrv,'!r.econo$ist.comiir:cgslguliiverl?017102r'taxi-take-0
Page 140 ol 1120
6
paper outlining plans for flying cars that could turn a fwo-hour drive into a r5-minute
flight. Those vehicles would be manned by pilots, but Uber projects that they would
eventually be far cheaper for a 6o-mile trip than the company's standard UberX cars are
now.
Pilotless drones might cut costs further by eliminating the need to pay for labour (it
would also save on weight), although people on the ground would monitor the vehicles.
It is not hard to envisige a future in which business travellers use piloted flying cars like
Uber's for intercity journeys, and trips between cities are taken in drones. Add to the
mix some other innovations-like the aforementioned hyperloop, that could whizz
people between Dubai and Abu Dhabi in rz minutes, and the driverless on-the-ground
taxis that will inevitably become a reality and a multimodal transportation future akin
to Futurama doesn't seem so far-fetched. Eventually.
2i27117, 1A:C6 AM
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htttl:11lvww-e. on on] ist.cofii 5:o!lsi qu lliver/?017i0 2i tax!-ta ke-0
Page 141 of 1120
7
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8
Gommission Gommittee Assignments - C4 P
AAIAMI BEACH
COMMISS ION MEIIJIORAN DU M
TO: Honorable Mayor and Members of the City Commission
FROM: Mce-Mayor Kristen Rosen Gonzalez
DATE: March 1,2017
SUBJECT: REFERRAL TO THE FINANCE AND CITWV]DE PROJECTS COMMITTEE AND
TO THE NEIGHBORHOOD/COMMUNITY AFFAIRS COMMITTEE TO EXPLORE
PLACING CAMERAS ON EVERY CORNER OF THE MXE (MIXED USE
ENTERTAINMENT) DISTRICT AND ON THE BEACHWALK, AND INSTALLING
EMERGENCYACTIVATION BOXES ALONG THE BEACHWALK.
ANALYSIS
Please add to the March 1, 2A17 Commission Agenda, a refenal to the Finance & Citywide
Projects Committee and to the Neighborhood/Community Affairs Committee to explore placing
cameras on every comer of the MXE (Mixed Use Entertainment) District and on the beachwalk,
and installing emergency activation boxes along the beachwalk.
Legislative Tracking
Vice-Mayor Kristen Rosen Gonzalez
Page 142 ol 1120
9
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10
Resolutions - G7 P
GOM]UIISSION ME IMRAN DU M
Honorable Mayor and Members of the City Commission
Raul J. Aguila, CityAttorney
March 1,2017
AAIAMI BEACH
TO:
FROM:
DATE:
SUBJECTI A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, SUPPORTING AMENDMENTS TO FLORIDAS
CONDOMINIUM ACT, CODIFIED IN CHAPTER 718 OF THE FLORIDA
STATUTES, AND IN RELATED STATUTORY PROVISIONS, CONSISTENT WITH
THE RECOMMENDATIONS OF THE MIAMI-DADE COUNTY GRAND JURY TO
PROTECT CONDOMINIUM OWNERS AND RESIDENTS IN THE STATE OF
FLORIDA.
RECOMMENDATION
Pursuant to the request of Commissioner John Eliabeth Alenan, the attached Resolution is
submitted for consideration by the Mayor and City Commission at the March 1, 2017 City
Commission meeting.
Leoislative Trackino
Office of the CityAttomey
Sponsor
Commissioner John Elizabeth Aleman
ATTAGHMENTS:
Description
o Reso Supporting Condominium Law Reform F.A 2.28.2017.doc
Page 401 ot 1120
11
E rFt!{:rr!E!$q:5.-
RESOLUTION NO.
A RESOLUTION OF THE M,AYOR AND CITY COMMISSION OF
THE CITY OF MI,AMI BEACH, FLORIDA, SUPPORTING
AMENDMENTS TO FLORIDA'S CONDOMINIUM ACT,
CODIFIED !N CHAPTER 718 OF THE FLORIDA STATUTES,
AND IN RELATED STATUTORY PROVISIONS, CONSISTENT
wlTH THE RECOMMENDATIONS OF THE MIAMI-DADE
COUNTY GRAND JURY, TO PROTECT CONDOMINIUM
OWNERS AND RESIDENTS IN THE STATE OF FLORIDA.
WHEREA,S, after receiving complaints of unresolved issues concerning the
management and operation of condominiums in the State of Florida, the Miami-Dade
County Grand Jury ("Grand Jury'') commenced an investigation and ultimately issued its
Final Report on February 6, 2A17; and
WHEREAS, the Grand Jury investigation discovered that there have been many
years of condominium association problems in the State of Florida and concluded that
there were severe weaknesses in the current laws and regulations governing
condominiums and their boards and associations; that the condominium laws and
regulations are ineffective; that board directors, management companies, and
associations have ubecome emboldened in their willful refusal to abide by and honor
existing laws in this area"; and that fraudulent activities go unpunished; and
WHEREAS, the agency assigned to conduct investigations of fraud, wrong-
doing, and violations of condominium regulations is the Department of Business and
Professional Regulation (DBPR), however the Grand Jury concluded that DBPR "seems
ill-suited to resolve, correct or prevent many of the recurring problems"; and
WHEREAS, in its Final Report, the Grand Jury stated that, despite'the number
of complaints from unit owners, for too long, we believe the legislative, the DBPR and
local law enforcement have failed to make this a priority" and that 'focused and
continuous coordination" is needed among the various stakeholders on a state and local
level; therefore, the Grand Jury suggested the implementation of a cornprehensive list
of recommendations to finally address and respond to the need for condominium
reforms; and
WHEREAS, among its suggested reforms, the Grand Jury recommended
criminal liability for directors and members of condominium boards and associations for
certain violations concerning access to official association records; amendments to
Section 617.0832 of the Florida Statutes, concerning corporations that govern
condominiums, to make the non-disclosure of conflict of interests inapplicable to
condominium board directors and property management companies who enter
contracts on behalf of the associations; condominium election monitoring with greater
Page 402 of 1120
12
ffif rrY':'r'1 r--#r!i.1:ir.f{ffi ,WF'ff I:ry;*_HS
L. t\' \1
Dqte
authority given to ensure the integrity of the election process and of the ballots
submitted, along with the imposition of criminal tiabitity for violations; and the potential
creation of a Bureau of Compliance, separate from DBPR, with additional investigatory
powers; and
WHEREAS, the Grand Jury's recornmendations are more fully set forth in the
attached excerpt from its Final Report filed February 6,2017; and
WHEREAS, due to the significant amount of condorniniums in the State of
Florida and, in particular, in the City of Miami Beach, the Mayor and City Commission
support legislation that would strengthen Florida's Condominium laws to address the
multitude of problems and deficiencies that currently exist in order to protect
condominium owners and residents.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby support amendments to Florida's Condominium Act, codified in
Chapter 718 of the Florida Statues, and in related statutory provisions, consistent with
the recommendations of the Miami-Dade County Grand Jury, to protect condominium
owners and residents in the State of Florida.
PASSED AND ADOPTED ihis _ day of March, 2017.
ATTEST:Philip Levine, Mayor
Rafael E. Granado, City Cterk APPROVED AS TO
FORM & LANGUAGE
T*
F:IAfiO\TURN\RESOS\ Reso SupporHng Condomtnium Law Reform 201?.doc
CltrAttomev-o-
Page 403 of 1120
13
,7+ia".a.,lvr3!urj-''":.i81'T:-:{wl<r -
IN TIIE CIRCUIT COURT OF THE trLEVENTH JUDICIAL CIRCUIT
OF'FLORIDA IN AND FOR T}I} COUNTY ON'MI,{MIOADE
F'INALREPORT
OI'THD
MIAMI.DADD COIJNTY GRAND JT,RY
SPRING TERMA.D.2A76
*******
Stnte Attorney
KATIIERINE tr'trRNANDEZ RUNDLE
Chief Assistant Sttte Attorney
DONL.IIORN
Assistant State Attorney
JO}IN PERIKLES
FILED
tr'ebruary 612417
Page 404 of 1120
CLERI(
14
ADDRASSING CONDO OWNERS' PLEAS F'ORHELP:
RECOMMENDATIONS IIOR LEGISLATIVD ACTION
INTRODUCTIOI\i
Soutb Florida, the land of sun and fun, is not only a major tourist destination. It is also
one of the premier destinations for persons looking to retire and the pedect location for
foreigners and others who are seeking to onn a second residence or invest in real estate. Add to
this mix, parents who have become empty-nesters looking to dovmsize from their single-family
homes and you have the perfeot stonn for 0n sxplosion of new condo construction in the real
estate malket.
Condominiums have become one of the primary sources of home ownership in the South
Florida area, both before and after the housing bubble began to burst in 2007. Horvever, with
the increase in the nu:nber of ploperties has also come anincrease inthe number of problems for
persons purchasing, living in and managrng condominiums. So too has there been an increase in
the number of issues, probiems and complaints lodged against the agoncy assigned to conduct
investigations of fraud, wrong-doing and violations committed by condominium associations.
That agency is the Departrnent of Business and Professional Regulation, generally refened to as
..DBPR.''
This Grand Jury decided to conduct an investigation looking specifically at some of the
problems and issues conftonting condo otvners and hotv well those problems and issues are
being resolved by DBPR. As set forth below, our investigadon leveals that for coodo owoers,
there are a gteat number of problems. Unfortunately, the DBPR seGIrIs ill-suited to resolve,
coneot or prevent many of the recuring probiems that have been blought to theil attention.
Iucluded within this Grand Jury Report are recofilrneadations we believe will address both areas
of our inquiry.
For starters, we must point out that Chapter 718 of tLe Florida Staiutes, also knorva as the
Condominium Act, govsfils condominiums and establisbes procedures for tho creation, sale, and
operation of condominiums in this state. Arnong other topics, the statute contains sections
addressing Gener.al Provisions {Part [; Riqhts agd Oblisations of Associatio+ (Part tI); and
Regulation And Disolosure Prior to S?le of Bgsidential C--ondominiu{ns (Part $. As de{ined in
the statute, " 'Condominium' means that fonn of ownership of real property created pursuant to
1
Page 405 of 1120
15
this chapter; rvhich is cornplised entirely of units that may be olvned by one or more persons, and
in which there is, appurtenant to each unit, an undivided share in common elements."l Eaoh
condominium is govslned b1, a boad of directors in accordance with the bylaws of its
association, The board members are elected by the cordo owne$ to run the assosiation and
manage corrdomioium property, which the board may do directly or indilectly, by hiring a
manager.
The Condo6ifi tr nr Association
The operation of the condominiurn shall be by the association, which rmrst be a Florida
corporation for profit or a Florida eorporation not for profit. Any association that rvas in
existence on January L,7977, need not be iucorporated,2 The condominium is run by a board
that oversees operation of the association, '(Associationt'is defined in Chapter 718 as "any
entrty responsible fot the operation of common elements owned in undivided shares by unit
owners, any entity rvhich operates or maintains other real property in rvhioh unit owners have use
rights, where membership in the entity is composed exclusively of unit owners or their elected or
appointed rcpresentatives and is a requiled condition of unit ownership-'3 Ihe owners of units
shall be shareholders or members of the association.4
TheBoard
The "Board of Administration" or "boald" meaili the board of directors or other
representative body, which is responsible for administration of the association.s The officers and
directots of the associationhave a fiduciary relationship to the unit ournsts.6 Nottnithstanding
good intentions and motives, a unit owrer does not have any authorif to act for the association
by reason of being a unit owner.?
II. CONDOMIII{IIJM O}YNERS AND THEIR ASSOCIATIONS
Problems between condo owners and their boards and assooiations are not nerv. In fact,
marry of the complaints, concelrs, and uitieisms described by our witnesses are the sa$/re or
I Florida Shh*e, ?lS.I03 (l l)
3 Florida stature, ?18.t I I (t) (8)
' Fiorida ststBte, 718.t03 (2)
{ Florida sr.atBte, ?18.1I I (l) (a)
r Florida Statutq 718.103 (4)
u Florida Satute,7t8.t I I (t) (a)
TFlorida statute, ?ls.ll I (t) (c)
2
Page 406 ot 1120
16
similar to those reflected in the Florida Hg}se of Representatives' Final K-egort of theSelect
Committeq. issued almost nine (9) years ago.s The charge given to that Select Committee was to
examine "tlre governance of sondominiums . . . to include accounting budgeting, audits, theft by
officers and direotors, elections . . . acsess to records and the state regulation of condominiums
b). the Department of Business and Professional Regulation."e
Over a 3-monthperiocl, starting in Janutuy, 2008, the Select Committee convened in five
Iocations tbnoughout the state to hear publio testimony about condo associations,lo At the end of
2AA7, the year before they received testimony, there wete 1,394,467 condominium units in
Flor.ida,ll In 200?, DBPR received 2,482 complaints about condorniniums and cooperatives,l2
Fast forward to 2016 and there are now thousands more condominium units (and more uuder
conshuction) in Flor{da as a result of the new building boom. These were the most prevalent and
problematic issues Florida citizens discussed rvith the Select Committee in 2008:
o Aceess to Records,ll Assooiations rvere failing to comply witb tUe larv that rtquires
them to make records of the association available to unit owners.l4 Specifically, as
provided in Section 7i8.111 (12Xb), "The official reords of the association must be
maintained within the state for at least 7 years. The records of the association shall be
rnade available to a unit owner within 45 miles of the condominium properly or within
the county in rvhich the condominium property is located rpithin 5 working days after
receipt of a w'itten request by the board or its designee." Too often, unit owllers were
making requests to &e association for copies of documents and those requests were
being denied or the replies significantly delayed;
Association Management Problems. This category inoluded concenu voiced about
maintenance and repair conhacts and was most probably related to major repairs that
had to be done due to damage caused by several humicanes arrd tropical storms rvhioh
t The "select Commiltee" was lhe Select Comurittee on Condominium & Homeorvner Association Govemance.
The Final Report rvas issued on March 4,2008.
e ld. atp. I.
to Ths five locations ryere Pembroke Pines, Miami Beach, Orlando, Tantpa and Tallahassee.
It Final Report of the Sel.ect Comrnittee, p. 2.
12 12 Id, at p.3,
13 Final Report of the Select Committee, p,4.
ra Florida Staft*e, ?lS-l I I (12).
3
Page 407 of 1120
17
J' !"ir-IllF1-u*ilrf r -!, rz{tt
impacted Flor{da in 2005 alld 2006.1s Such damags would have resulted in Special
Assessments.l6 Another nrajor concern raised in this category involved "insider
contracts," The complaints involving insider sontracts inoluded both management
companies employing firms with which they have rclated business associations to
provide maintenance and lepair work at inflated prtces and officers and board
members {directors) of the association entering into contracts with coqporations andlor
businesses in which they were part owrer;
. Perceived Lack Of Enforcement By The DBPR. Rounding out its top tluee
categories of complaints from unit ownsrs' comments, the Select Committee noted a
"perceived lack of enforeement by the DBPR" More specifically, {'numerous
speakem at the hearings discussed their perception of DBPR delay and- is.action."l?
Some unit owners testified to the Select Commi$ee that their compiaints filed with
DBPR had beenpending for over a year.ls
Sadly, nine (9) years later, this Cnand Jury heard testimony ftom unit ow'ners that mirror
the complaints identified in the Select Committee's Final Report. Unfortr:nately and almost
irrationally, some of the problencs seem to have gottenworse.
III. CURRENT PROBLEMS
A. Access to Reeords
One complaint that has not improved, and may have gotten wo$e, is the tesponse to
requests for documents or aceess to offrcial tecords ofthe assooiation by condo unit owners.
Elorida Statute ?18.lll(12)(b) provides that the offrcial records of the association must
be maintained within the state for at least ? 1.ears.le The official records of the association are
open to inspection by any association member or the authorized representative of such member
at all reasonable times. The rtgbt to inspect the records includes a member's right to make or
ts Hurficanes Katiua and Dennis made landfall in Florida in 2005. Tropicat Storms Emesto and Albedo made
landfall in Florida is 2006.
to ?tf.t031Z+) r'special assessmenf' means aily assessrnert levied against a unit ovner otrer than the assessmeilt
required by a budget adopted annually-
t? Final Report of the selecr Committee, p. 5.
tE Final Report of the Select Committeg p. 11.
re Florida starute ?18.1 I I (12Xb)
4
Page 408 ot 1120
18
f -:-vr":QtlTfif ry:-l--"l$Snrri i{F,.4rIIttEF
I
\
I
I
obtain copies, at a reasonable cost. Each association may adopt reasonable rules regarding the
fiequency, time, location, notice, and manner of rtcord inspections and copying,20
We aqe mindftl of the factthat some unit owners may become nuisanees and abuse their
dght to request official records of the association. For that teasoq we believe it is perfectly
reasonable that the Florida Legislature gave the assooiation the authority to 'hdopt reasonable
rules regarding the fi'equeocy, time, locatio& notice, and manner of record inspections and
copying.''l Howevel rve fiad the remedy afforded by the statute to unit ownsrs when the
association fails to comply to be totally ineffeoti'r,e. We must explain this position.
In summary format, Section ?18.111 02Xc) provides, inpart:
o Failure to provide records within ten (10) working days of rcceipt of a written request
constitutes a violation;
o That violation creates a rebuflable presumption that the association N'illfully failed to
comply with this Provision;
c A unit ouner is entitled to actual damages or minimrm damages for the assooiation's
willful failure to comply;
On the lltL working day after receipt of the rvritten request, mininrum damages are $50
per calendar day for up to ten (10) days (for a maximum of $500 in minimum damages);
The unit o\uler who requested the dooumentsmay file an enforcement action. Iftre unit
o\uref is successfid and ptevails in the enforcement action, the unit o$rrer is entitled to
recover rcasonable attorney fees from the person in control of the records who dilectly
or indirectly, knowingiy denied aecess to the records.
We have observed that these provisions are not effectively protecting unit owners' right
to access records. While lve recognize that unit olyaer records requests can be ve><ing to the
associatiorl associations, in furn, catr be antagonistic to the ulit owners and act in apparent
abrogation and nultification of this statutory provision. Under the law, if the association fails to
comply with a valid request, moneta?y damages can be awatded to the unit owner. The problem
is that the source of those funds will come ftom assessnrents levied against alt of the ovmers.z
20 Ftorida statute 7t B.l I I (12Xc)
?t lbirl.
'1 7tA.ttt1+; Assessments;fulanagementOfCommonBlements. Theassociationhastheporvertomakeatrd
collect assessrrents and !o leasg rnaintairl repair, and replace the common clements or association property;
horvever, the association may not charge a use fee against a unit onrner for the use of connon elements or
association property unless othenvise provided for in the deolaration of condominium or by a majority vote of tho
5
Page 409 of 1120
19
,ry i')rj r*',Mr"F ?!56rs.i.r,-r a?...qr4?!lt
Essentially, any awarded damages paid to the unit oruler seeking the documents - will be paid,
in part, by the unit owner himself, As the other unit owners will have to contibute, fl1e
requesting owner may eata the enmity of the entire assooiation. This atangement resuits in no
real consequences to the individuals responsible for the violation, They can act with irnpunity
and have others bear most ofthe eosts.B
Further, any efforts by the uequesting unit owner to initiate an enforcement action will be
done with the unit o\Drer footing the bill for his/her attomey to bring that action. The attorney
opposing the enforcement action and representing the oflending association will be paid fiom the
same source of fimds - the assessments. It does not seern right to us that a recalcitrant boald,
acting against the interests of the associadorr, can take willful action and not personally suffer
serious consequences. To the extent that the association can sngage in these tactics when a uoit
owtror is making record reqtrests for budget, accounting audit or othet f,nancial records, is most
troubling The willfld failure to provide such documents may be part of a broader soheme to
coyer up embezzlement or other financiat wrong-doing committed by the board or assooiation,
In furtlrerance of possible cover-ups, directors may also shoose to iutentionally deface or destroy
accouating records or knorvingly or intentionally fail to create or maintain accounting records
that ale required to be maintained by stafute. Even suoh willfuI &ction, whioh again, may be
done to eover-up theft of funds fiom the assooiation, is only punishable by a oivil penalty.2a
Again, the unit oruters are the ones who are harmed in these situations. We strongly believe
these provisions need to be amended. A right without aremedy is effectively no tight at all.
To encourage pexsons to selve as directors on non-profit boards, the la\&' in Florida
prwides immunity fi'om civil liability to such officers and directors for any statement, vote,
decision or failure to take an action regarding organizational management or po1ioy.25 Howevet,
the availability of that imrnunity prcsunces that the directors will act in accordance lvith another
association or unless the charges relate to exp€nses ilcurred by *n orurer having oxclusivs uso of the common
clements or association property.
a Board Diectors have to lre unit o\wrers. We recopize thai if the Directors of t]re condo assooiation board are the
ones at fault for hrrning over documenls that they rvill also contribute to the pa)trretrt of the fine as unit owlrers.
Holever, lye see a huge difference betrveen tiability for a $500 fine imposed on s 3-member boerd versus a S500
fine imposed on 100 unit orvners in a condo association.
to DgpR records shorv that for the fiscal year ending June 30, 2016, only $23,064.80 in fines rvas trevied against all
of the condominiums in MiamiDade Couuty for all violations, including those related to records.u efl.os3q (lXa) & (b)
5
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{r i{;;!Fi-..rY..f ".1"../ .'j!n,1EEr,i1ffi
statutory provision. Section 617.0830 sets forth the general standards for percons who serye as
board directors ia this state:
617.0830 General standards for tlirectors.-
(l) A dirtctor shall discharge his or her duties as a director,
including his or her duties as a membet of a committee:
(a) In good faith;
(b) With the care an ordinarily prudent pemon in a like position
would exetcise under similat circumstances; and
(c) In a manner he or she reasonably believeslo be in the best
interests of the corporation.
Themariage of thoso two statutes provides thatif directors discharge their duties in good
faith, act u,ith cate as ordinarily prudent persons in similm positions and operate in the best
interests of the corpomtion (assooiation), those direotors will rcceive the benefit of imrnunity
{i'om civil liability. However, lve must point out that each statute has a cave&t. Section
617.0830(4) specifically states: "A director is not liable for any action taken as a dilector, or any
failure to take any action, f he or she performed the duties of his or her office in compliance
with this section." Consequently, if a director did not discharge his duties in good faith, did not
act with care as an ordinary prudent person and against the best interest of the association, he or
she should be personally iiable for those actions.
Similarly, Section 617.0834 provides that directors are not personally liab1e for monetary
damages..,lraless the dircctors breached or failed to perform their duties as directors and the
directors' breaoh or failure to perform their duties constihrtes a violation of the criminal law; or a
transaotion from which the direstols dedved an imprnper personal benefit; or the failure to
perfom their duties constitutes "recklessness."26 The statute goes onto say recklessness covsrs
an act or omission that was committed in bad faith or ryith maliciotts purpose or in a manner
exhibiting rvanton and willflrl disregard of human rights, safety, or p'operty.2?
We have examined these two statutory provisions in great detail to establish tivo (2)
points. First, the Florida Legislature intentionally cloaks direetors with immunity when they act
in good faith and in the best interests of the corporation they are sening. Second, the Florida
Legislature intentionally removes that cloak when directors breaoh or fail to perforn their' duties
2u 6lz.o8l.r (rXa) & (b)
7? 6t7.0834 (rX b) 3
7
Page 41 1 ol 1120
21
by committing crirninal acts, engaging in "self-dealing" or acting rvith teoklessness, i.e., in bad
faith or with malicious purpose.
For directors who repeatedly fail io plovide official records and documents to unit
residents, the cloak needs to be removed. The stafute covering this alea already provides that
"the faiiure of an association to provide the records rvithin ten (10) u'orking days afterreceipt of
a written request c,reates arebuttable presumption that the association willfuIly failedto comply
with this paragraph,"2s Sueh repeated willfirl behavior by the direotors and thoir associations fly
in the face of the protections afforded by the imrnunity statutes. Similarly, directors who engage
it fiaudutent activity with regard to the annual election are also acting "in bad faith or with
malicious purpose," Moreover', they are not t'acting in good faith,'nor ate they acting in the best
interests of the [associationJ.2] The oloak on immunity should be removed from dircctots
engaging in suoh behavior. In both scenaltos, the directors should be subject to personal
liability for damages caused by their actions. Any fines levied against the direotols for such
violations should be paid by the directors personally. Such directors should also be preoluded
fi'om using fln): association funds to pay for fines, damages, penalties or attoruey's fees to defend
claims for such wrong-doing by those directors,
Some hright say this could have a chilling effect on those who would otherwise be
witling to volunteer their time and serve on those boards. We are mindful of that concem.
Honever, our position is that the only persons who have to be concemed about these
recommendadons are those dir,ectors who have engaged ia or u'ho intend to engage in wrongful,
fi'audulent, willful behavior that is contradictory to the frduciary responsibility they owe to the
associatiorr and its unit orvnerx. Accordingly, we make the following tecommendatio*s:
That Florida Statute 718.1 tt Q2) (c) be amended to provlde thatDirectors and members
of the board or association y,ho v,ilfally and repeatedlyfail to comply with their slatutory
obligation to oppropriately and timely respand to ttritten requests for oJficial records of
the association (more than hyo (2) violations withtn a rolling tvvelve (12) month period)
shall bepersonalty tiablefor payment of damages to theruquestingunit otvner(s);
That Directo$ and menrbers of the board or association who knowingly or intentionally
def*ce or clestroy accountiltg records ar fail to create or maintain such records that Ne
recpdred by law shall be *iuinally liable for such conduet. We recommend thot each
23 Section 718.1 I I (l6Xc) (emphasis added)a Section 6 17.0830 (a) and (c) and 6i7.0834 (1XbX3)
8
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22
1-": *.r . :grfirir^t
such act ttill conslitute a 2nd degree tnisdemeanot' .for a first ffinse, and that any
x&sequent offenses or violqlians wlll eonstilt$e q lst degree ulsdernesnor;
That tny associatian, boayd directar, ftranqgetilerzt contpany or manogement cotnpany
employee :t,'ho u,itfully, krtowingly or infentionally re.fuses to rclease ot othenvise
produce afliciat assaeiation records, and such refusal ls donetofacilitate or cover-?tpthe
conlnission of a tirne, shall be crimina\y liablefar such conduct, Thetiolation shall be
classified as a 3'd clegreefelony;
Thut managenrent cantpanies $hiclt sever their ties or terminale thelr conttactttal
agreemenls *ith condo associations wust tufi over all oficial records of the xsaciatian
to the association y,ithitr ten (10) bwiness days. A managemettt canrpqny that fails to
hrn oyet the associalfon's oficial recordswithin lhat tirne-frame shall befined qt a rate
of $1,000 per day for up to ten (t0) dcys and then thereafier, shall be nrbiect to a
mandatory license swpenslon until all rccovds are htned over,
B. Association lVfanagement Prolllems
Conflicts of Board Members
One of the other areas of inquiry that concerned the Select Committee and still troubles
us today inoh,es board direotors rvho use thefu position to enrioh themselves or their business
partners or family members, contrary to the fiduciary duty they owe to the unit owners. As lx'e
understand it, directors are authorized to make deoisions as to the entities with whioh they will
do business, They can enrer into contracts on behalf of the condo association for repairs,
maintenance, lawn serrices, gmdening accounting, eto. The money spent by condominiums for
these services is not tlivial. At some condominiums, associations routinely authorize
expenditures for hundrcds of thousands of dollars each year. Every member of this Grand Jury
firnly believes that a conflict of interest exists for any board member who has the power to vote
for or against arvalding a contract that involves the board member, a relative of the board
member or any person or entity that has a relationship with that board member or the board
member's relative. To our great shock and amazement, what ive thought rYas a basio ethical
prtnciple that rvould prevent such situations apparently does not.
Under Ftorida Statute 617.0$2:0 a board member of a condo association can vote to
aryard a cootract that directly benefits the board mernber or a relative and not violate any laws'
The statute permits a condo association director to be present at the meeting, to have his presence
30 Section 6t?.0S32 covprs all Florida corpomtiors, including those set up tq run condominiums.
9
l.
Page 413 of 1120
23
counted in determining the presence of a quorum for that meeting and to vote in favor of entering
into a contract rvith a coqporation or entity where that director is an ofrcer or director of that
corporation and has a finanoial interest iu that corporation. The confuact or transaction wiil be
valid and the law will uphold it as long as 'rthe fact of suchrelationship or intelest is disclosed ot
knolvn to the board of directors or committee" which ratifies the contrast without counting the
vote of the interested director. If the fact of such relationship or interest is disclosed or known to
the members cedifed to vote on such contract...and they authorize...it by vote "then the
transactiorr is legitimate." Finally, even absent knowledge or discloswe, it appears that
approving such a contract may still be permissible if "the contract or transaction is fair and
reasonable as to the corporation at the time it is au&orized by the board, a committee or the
members." But, rvho determines the "faimess" and "reasonableness" to the corporation? The
vety board of directors vuho approved the contact! Given the curent state of the law, unit oumel
complaints to DBPR and to local law enforcemont about confliots of interest are usually met with
some vaiationof, "Well, you voted for the board."
'We lvere repeatedly toLd by witnesses that many of these transastions and contraoted
arrangements are nqt in the best interest of the unit olvne$i. Although the directors have a legally
mandated fiduciary obligation toward theit unit owrers, it appears that some of them are more
involved in self-dealing and looking out for their own financial interests. The position of board
director is not generally a paid position.3r Yet, some directors appear to view the ability to get
into office as an opporhurity to cash in. This should not be countenauced. No board member
shouid be given free rein to ongage in sellsening behavior to the detrimont of those whom they
should be serving. Our Florida Legislature should not encourage such behavior. For that reasoq
we recomilend that the legislafure amend Florida Staute 617.0832 to make the provisions of
that st{ttute inapplicable to directors of condominium associqtiow,
3 t Section 7I 8 .ll2!)@)t Florida Statutes, states that 'untess othenvise provided by the [condo] bylarvs, the officers
shall serve rvithout compensation..." The vast m4jority of Florida eondominiums do not compensate thelr board
members.
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Page 414 of 1120
24
w .': . 'r.srr,5t ".-- i E:'qtffiEEEr5ffiFE!*15cryffiry
2, Co_nflicts of Prop erty Management Compelr,ieq
A similar sifuatioo presents itsolf rvhen rve look at some of the prrpetty management
companies,32 Fo, those assooiations who decide not to self-manage their condominiums, Florida
Iaw requires the hiring of a licensed management company or licensed community association
manager when the size of the condominium assooiation exceeds ten (10) units or lvhen the
budget for the condo association exceeds $100,000:3 The board of directors of the condo
association hiles the property management company or an individual properly manager.
Although the manager seryices the unit o\ralers, the prroperty manager reports to the board of
dilectors. The boald is the liaison between the unit orule$ and the manager, so the unit olvners
have little direct input into the routine affairs of management,
The pulpose of the property manager or property ma$agement company PMC) is to
handie the community and lifestyle management ofall unit o$nets in the associatioa The duties
of thePMC may inolude handlingthe accounting and corporatefinancing for the assooiation. On
the finanoial side, the duties iuclude paytng the bills,lrandling the bookkeeping, and the teceipt
and processing of payrnents from residents. Tn addition, they send out monthly bills and notices
to residents for condo duos and assessment.
Although the PMC can assist the association by rccommending support staff for the
associatioq i.e., engineers, janitors, gardeners, etc., large PMCs can contract with the board to
provide those services by the PMC. The problem with this, as we see it, is the PMC has a
" Se"liort 468.431(2), Florida Statutes states t'Cornmunity association managemenf' eeaos any of the folloning
practices requiring substantial specialized knowledgqjudgment, ard rnnagorial skill rvhon done forremuneration
and rvhen tho association or associntions served contain more than l0 units or have an annual budget or budgets in
excess of $100,000: conb'olling or disburstng funds of a community association" prepuing budgets or other ftnancial
documents for a community association, assisting in the noticing or conduct of community assooiation meetings,
determiaing the nunbor of days required for shtutory notices, deteflnining amounts due to the association"
collecting amounts due to the association before the filing of a civil action, ealculating the votes required for a
quorurr or to approve a proposition or amendmeog completing forms related to the management of a community
association that have been created by statute orby a sht€ agsncy, draffing meetiugnotices and agendas, calculatiug
and preparing certificates of assessment and estoppel csrtificates, respcnding to requests for certificates of
assessment and estoppel certificates, negotiating rnonehry or performance terms ofa contract subject to approval by
an association, drafting pre-arbitration demands, coordinating or performing maintenance for real or personal
property and other related routine services involved in the operation of a community associatiol, and coroplying
rvith the assosiation's governing documents and the requirements of larv as necossaty to perfonn such practices.
LL
Page 4'15 of 1120
25
'TYl"TrqqI?*3ru
financial interest in these situations similar to those raised in the section above invoh'ing the
directors. The PMC will rcceive a financial benefit in this scenado, if it can coavinse the condo
Boald to enter into a contrastwiththe PMC forthose sex,ices.
Our concem is that g'itnesses advised us that when operating il these sifuations, the PMC
charged inflated prices for the services. The unit otlmels qre at a loss because there is nothing
they cau do to undo the conhacL And, what can they do if the wort being done is substandard,
or \\rorse, not beiug done at all? Clearly, this is a yery frustrating predicament fot the unit
orvners to be in.
One of the other troubling aspects of this entire anangement is often times the PMC is the
entiby involved rvith conducting elections for the condo associatior. As revealed by a
horrendous election process discussed later in this report,3a they are supposed to be unbiased.
The PMC (and/o," the ploperty manager provided by the PMC) may have a vested interest in
seeing an existing board of directors re-elested. The PlvtC might even be willing to go to great
lengths to try to accomplish that - even to the extent that they might partrcrpate in or turn a blind
eye to those involved in fraudulent election activity that results in double ballots for scores of
residents.3s ts this the reward for securing a cazy and lucrative contrast with the association via
the approval and authorization of the Board of Directors? We do not know, but is that a
reasonable conclusion that one can reaoh, looking at this from the outside? We think it is.
For these r€asons, we tecottoilend lhat ths DBPR crea{e a nev rule thot retluires PMCs ta
provide notification rmd disclostre to the Board and condo association resldents of anyfinancial
dealings a*d/or interests the PMC has vith any compan)t, corporaliafl or enlity being
recommended to the Association Board by the PMC. Fallure to provide such notice shall vesult
in cancellation of arry contactuql *greement entered into with the associatlon ilithottt such
notifi c at i on or di s cl o sure.
lYe fiu'ther reconnnend that in any situation x*ere a PfuIC is recowmending that a condo
associatiott enter into a contracntol ug'eement with afty compqny, cotporalion or other entity
vith which the ?MC is ffiliated or has same other type interest or relationship, prior to votlng
on any such contract, the Board of Directort for the qssociation shall first be required to obtain
3{ See nss.2l-23 herein.
lJ Id- '"
\2
Page 416 ot 1120
26
pj.i,,j,${.rx..r r,t@@rflil
at leqst three (3) bids fram unrelated companies, cotpolatlaw or entities pt'ovitling those same
serviees. Such infomwtlon shall be provided to all mit otynert at the board meeting vhere the
voting on said contract rrill lake place.
C. Perceived Lack of Enforcemeut by the DBPR
The Select Committee heard numerous speakers at its hearings express their frushation
with DBPR "delay and inaction," ln facl the Grand Jury had its issues with the DBPR duling its
investigation, When we extended our initial invitation to DBPR witnesses to testify, we wers
notified that General Counsel for DBPR actually challenged or:r jurtsdiction and author.i.ty to
conduct &is investigation. Unlike other publio offtcers and officials who appeated voluntariln
to obtain the appearance of two (2) DBPR investigators we were required to issue subpoenas,
Furlher, all theDBPR witnesses who testified were accompanied to the Gr"and lury by attomeys
sent from Tallahassee, Collectively, their testimony was guarded and stained. Not one DBPR
witness offered a critisism or suggestion for improvement of any DBPR practices. Based on our
examination of the problems plaguing many Florida condominium associatiotts, we believe the
perceptions of "inaction and delay" lI 2008 have becorne the realities ifr,2017.
Every condominium created or existing in Florida is subject to the provisiors of the
Condominium Act enacted by under Chapter 718 of the Florida Satutes. The Departnent of
Business and Professional Regulation is the state agensy charged with regulating Florida
Condominiums through its Division of Florida Condominiums, Timeshares, and Mobile Homes.
In addition to the statutory Ianguage outlined in Chapter 718, the division also has authority to
adopt administrative rules necessary to implement, enforce and interpret the laws in Chapter 718.
The rules for c,ondominiuns cau be found in Chapters 61B-15 through 618,-24, Florida
Administrative Code. The jurisdiction of the division is limited once a coldominium has been
turned over by the developer to the association. After turnover has occuned, the division may
only investigate complaints related "'to financial issues, olections, ard unit orlryrers' aceess to
recot'ds..."36
The division is olganized into two (2) units: the Bureau of Standards and Registration
and the Bureau of Compliance. The first unit, the Bureau of Standards and Regishation reviews
13
Page417 of 1120
35 Florida Stahrte ? 18.501(I)
27
"}(i arl'Ri1:IFil,!. l
public disclozure documentation prepated by those who ofler condorniniums, cooperatives,
timeshares, and leased spaces in naobile horne parks to the public. The Gmnd Jury did not focus
onthe activities of this unit of the division.
The second unit the Bureau of Compliance is supposed to ensure compliance with both
the statutory and the adminish'ative rule requirements rclated to financial issues, eleotions, and
unit owners' access to records. The Bureau of Compliance (BoC), therefore, istheprimary entity
that investigates complaints from condominium owrers. In order to initiate a complain!
howeveq the complaint must bs submitted in writing aod forwarded to Taliahassee for review.
The review fior legal sufficiency detennines: 1) whetirer the alleged activity is subject to division
jutisdiction; and 2) whether srrflicient documentation has been submitted to initiate an
investigation. According to the testimony of a Fort Lauderdale-based BoC divisiou Investigator
and a BoC Financial Examiner, division employees may not initiate an investigation based upon
their own independent observations, no nratter how obvious. Unlike police officers that can act
on their own initiativg division investigators must receive a vritfen complaint that has been pre-
screened in Tallahassee. An investigatior can only be opened afte,r the branch ofiice has
received the pre-sueened written complaint fro$r the State Capitol. The BoC division has
offrces in Tallahassee, Tampa, Otlando, and Fort Laudetdale to cau'y out these investigative
fimctions. According to the DBPR website, once "Bt1 investigation is opened &e division collects
evidence to determine whether the alleged violation can be substantiateci. The division may use
many tools to resolve complaints: ectucation, settlenrent ag1'eements aud formal administlative
dction inoluding the imposition of penalties." As will be discussed below, the division's
"el,idence collection" process leaves much to be desired
Trvo other units rvithin DBPR impaot the regulation and administration of condominiums
ia Flortda. The fust, the Dirdsion of Regulation, mo*itors ptofessions and related businesses to
ensure that tlle laws, rules and standards set by the Legislature and ptofessional boards are
followed. One of the professions regulated is that of community assaciation m&nager (CAM). A
state license is required to operate as a CAIvI wlren an individual receives compensation for
management services; or when &e association or associatious served contain more than tea (10)
units, or have an annual budget or budgets in excess of $100,000. The Division of Regulation
will investigate complaints against licensed CAMs and will also investigate individuals who act
as unlicensed CAMS. As of November2016, there'"vere 19,155 licensed eommunity associalion
L4
Page 418 of 1120
28
w:t'
managers (LCAMS) and 2,065 CAM firms in Florida, Unfortunately, the Division of Regulation
has only 53 available investigators throughout the state to regulate the CAMS as rvell as the
thousands of oflrer professionals in unrelateri Jields. The teqponsibilities of the Divisiot of
Regulation seem truly daunting.
According to DBP& the Departmetrt does not maintain specifio rccords of the actions
bruught against licensed and unlicensed property managers so the work produot of the Division
of Regrrlation is not easily quantified. A review of a publicly available database of the FLorida
Division of Administrative llearingssT shows hundreds of administrative disciplinaty aotions
against licensed and unlicensed property manage$, wbrch indicates that the fiftythree (53)
available investigatots are very active.
The second unit witbjn the DBPR that inrpacts the regulation and administratiou of
condominiums in Florida is the OfIice of &e Condominium Ombudsaan, This offtce was
created by the Legisla*ue '1r_2004. The Ombudstnan's duties are described in Section 7L8.50L2
Florida Statutes, as followsl
(1) To prepare and issue reports and fecoumendations to the Govemor, the deparhnent, the' ' Avilion, the Advisory Council on Condominiums, the President of the Senatg and the
Speaker of the House of Representatives oa any matter or subject within the jurisdictioa
oi ttr" division. The ombudsman shall make rccommendations he or she deems
appropriate for legislation relative to division procedures, rules, jurisdiction, personnel,
and frrnctions;
(2) To act as liaison between the division, unit owners, boards of directors, board members,' community association managers, and other affeoted parties. The ombudsman shall
develop polioies and procedures to assist unit owrers, boards of directors, board
membirs, community association managers, and other affected parties to understand their
dghts and responsibilities as set forth in this chapter and the condominium documents
goveming their respective association- The ombudsman shall coordinate and assist in the
preparation and adoption of educational and reference matedal, and shall endeavor to
iool.dinate rvith privite or volunteer providets of these services, so that the availabitity of
these resources is mads known to the latgest possible audienco;
(3) To monitor and review procedutes and disputes conceming condomintum. elections or' meetingq inoluding, but not limited to, recommending that the division pursue
enforcement actionL any manner wherc there is reasonablo cause to believe that election
misconduct has o cculred;
37 The Division provides independent adrninistralive law judges to conduct hearings pursuantto sections 120,569
and 120.5?(1), ilorida Statuteq and other larvs, and under contract rvith governmental entities'
15
Page 419 of 1120
29
r.:- 'a'-' '-.:t*r-re
(a) To make recomnendations to the division for changes in rules and procedures for the
filing investigation, and resolution of complaints filed by unit owners, assooiations, and
managers;
(5) To provide resources to assist menbers of boards of directors and officers of associations
to catry out their powers and duties consistent rvith this ohapter, division rules, and the
condominium documents' governing the associatioq,
(6) To encowage and facilitate voluntary meetings with and between unit ownels, boards of
directors, board members, sornmunity association managerc, and other affected parties
rvhen the meetings may assist in resolving a dispute within a comrnunity assooiation
before a person submits a dispute for a tbrmal or administmtive remed3,. It is the intent of
the Legislature that the ombudsman ast as a neutral resource for both the rigbts and
responsibiiities of unit owners, associalions, and boardmembers;
(7) Fifteen percent of the total voting interests in a condominium assooiation, or six unit
owrers, rvhichever is greater, may petition the ombudsman to appoint an election monrtor
to attend the annual meetilrg ofthe unit owners and condust the election of direotors. The
ombudsman shall appoint a division employee, a person or pe$ons specializing in
condominium election monitor'ing, or an attorney licensed to practice in this state as the
election monitor. All costs assooiated with the election monitoring process shall be paid
by the association. The division shall adopt a rule establishing procedwes fot the
appoinh[ent of election monitors and the scope and extent of the monitor's role in the
election process.
As this Grand Juy learned, the Ornbudsrnan is an essentially powerless position.
Measuring the success ol failure of the office as an institution is quite difficuit. As designed, the
Ombudsman is a neutral information resource and "facilitator" with no power to investigate or
demand compliance. In the one area that the Ombudsman could potentially serve as an ally to
condominium owne$ i.e., monitoring elections, owners express fiustration that the porver and
scope of eleotionmonitorc ate extrsmely limited.
Although the Ombudsman has the porver to appoint a division employee to monitor
elections, in praotice, only private individuals "speoializing in condomirdum election
monitortng" or an attorney licensed to piactice in this state are regularly appointed. According to
an election monitor \\'ho testified before this Grand Jury, even the foaining is conducted through
privately run seminars. These are ad hoc, nongovemmental positions with no offrcial powets.
Monitors do not control the location or maruler of the election. They cannot collect the ballots or
take statements to document potential fraud, The only hue po'irver they possess is the potential
"thteat" of the filing of a bad election ueport. Unfoftunately, as this Grand Jury learned fi'orn one
15
?age 424 of 1120
30
]:II,JW/-r.-i l.?ft:lrrtF3FT'',:.Y--ff 1F_tF
condo election we examined extensively, even a datnning election teport result can'ies no weight
with the DBPR.
As discussed, the Bureau of Cornpliance is tasked wtth invesflgating cornplaints against
assooiations related to financial issues, eleotions, and unit ovmers' access to records. The DBP&
in lesponse to a public tecords request, reported that there are thiriy-three (33) investigators in
the entire state (6? counties) to investigato complaints by condorninium owners. Of those thirty-
tfuee (33), twelve (12) investigators are assigned to investigate complaints from L{iami.Dade
County. This Grand Jury heard testimony from hvo of those investigators, an "Investigation
Specialist" and a "Financial Examiner." Both testified concerning thoir maining, policies, and
procedures. We found both witnesses to be generally evasivo and reluofant to answer basic
quesiions. We obseled that both witnesses did not seem to have a firm undetstanding of their
office policies. Curiously and shockingly, bothwitnesses amwerednumerous questions with, "1
.r,ould have to ask my supewisor." We found their lack of knowledge about theit own policies,
or theit unwillingness to share their knowledge, exasperating.
During the questioning of these investigators from the Bureau of Compliance, the Gtand
Jury explored some specific complaints brought by condo unit ownets to the DBPR for
investigation. We are troubled by what we leamed. The DBPR complaint process seems
designed solely to screen out complaints. First, all complaints must be filed in writing, via mail
or email. The complaints are ali fcrrvarded to Tallahassee where they are reviewed to determine
whether the complaint is subject to division julisdiction and to verify whethet "suffroient
documentatiort'' has been submitted. Once pre*oreened, the case is sent to a local area offiee for
investigatioo. After the pre-screening one might anticipate that the investigation corild begin.
However, in the case of one complaint, alleglng the failure of an association to furn over records,
the Investigation Specialist "rescreened" the complaint and sent the complainant a closeout letter
because the comptainant did not have "standing."38 The investigator made this determination
after he conducted a records search and concluded that the compiainant was not a unit owner.
Why he believed there was a need to '1veed ouf' a perfectly shaightforward complaint was Bever
made olear. In the olose-out letter, the investigator wrote, "It is my under':standing that the prior
Board of Directors has resigned. The new board is you, C. C-, and L. P. A. I hied to get in
38 The Iuvestigation Specialist testified that he subsequently leamed thatthe cornplai*art did have standing and
reopened the lnvostigatiorr.
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T;'.Ef:.:.i :::,F."9M,-F.'!{41.i!*trry.r.qlq.@FE
contact with you via E-mail and also via tolephong with rto success. Your new position as
President of the Association provides you with acsess to the association's recotds." To serve on
the Board of Directots one must be a unit owxer. ln what can only be desclibed as baffling, in
the following paragraph the investigator urote that he could not find any reeord that the
complainant was a unit owner, and that as a lesult, the complainant had'ono staoding" to file a
complaint, The investigator admitted that at the time he olosed out the casg he took no
independent aotioa against the complainant that he had detormined was "not a unit owner," but
was row the President of the association! Even though he was prorlen ultimately wrong about
the complainant's standing, it makes little sense to us that the investigator could *ot, or did not,
open a aew investigation into a condo associatiol being run by an unauthorizedperson,
The mannff in which this complainant's investigation was handied encapsulates many of
the concems that we have with DBPR. The complaint was based on ailegations that the
association failed to tum over records. The records sought by the complainant unit orvner were
requested in October 2015, to assist that unit owner as a oandidate for the November condo
association election. The recotds were not timely provided and tle complainant lost the election.
As seen later in this report, this rvas the same eiection in which an eleotion monitor found olear
evidence of fraud. Following that electio4 the complainant filed another complaint with the
DBPR outlining the election fraud. The complainant and the Investigation Specialist exchanged
ntfitero?$ telephone calls and emails between December 2015 and March 2016 conceming both
the Ootober records cornplaint and the ne!/rer, election complaint. Thus, it is hard to understand
how the investigator could vnite "I tried to get in contaot with you via E-mail and also via
telephong rvith no success." In March 2016, despite clear evidence that the requested records
rverc not tr:rned over, and clear evidence of election fraud, both investigations were still
um'esolved. h middle and late Marcfu the complainant emailed the Investigation Specialist and
demanded action on the election &aud complaint. Subsequently, independent of any action by
the DBPR, the entire board of the condominium resigned, The reasons for the resignations were
nevor offsred, but it u'as likely due to intense media scrutiny of the election. The complainant
was installed as President and two other unit orllners were also appointed to the bomd. On April
5,2076,the investigator rvrote the complainant the letter detailed above closing his investigation
into the records complaint. On the same date, the im,estigator wrote a letter closing the election
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fi'aud allegation due to a "lack of cleal and convinoing evidence," We find tJtis conslusion
partioularly astounding.
This Grand Jury heard abundant evidetce of election fi'aud, both by the complainant and
the election monitor. When questioned as to why the case was closed, the irrvostigator kept
repeating that there was '{no evidence." Sigaificantly, in addition to the cornplaint, the
investigator was given q copy of the election monitor's report as well ds the nomes of numerous
condo tnit otyners vhose volss were ftatdulently cast. Yet, when asked, the investigator
admitted that he never went to the scene and neyer interviewed witnesses, not even the eleotion
rroritor. The investigator did not seem to comprchend that the observations of the electiou
monitor and the otherunit owners would constitute evidence, were the monitor to testi$.
Curiously, the investigator also insisted that the other unit owners needed to file their
oum complaints about the election fraud for him to consider their accounts.3e InexplicablS the
investigator could not understand that the other unit ownefs could simply be viewed as wihresses
to the fi,aud rather than cornplainants. ?he investigator acknowledged that he was provided the
narnes of scores of individuats whose ballots were fiaudulently prepared, but he placed the
burden on the complainant to obtain and provide him with notatized witness statements. This
defies understanding. Why would the DB?R place the butdeno and the cost, of gatheriug
evidence on ihe complainant?
DBPR's failule to demand tlut its investigators ufilize, or complehend, basic
investigative techniques is breathtaking. According to the witresses, the Buteau of Compliance
does not have anyone that can take swom statements. Based ou the collective testimony of the
DBPR witnesses, as to the investigators, rve leatned that thero was no requirement of prior
investigative experience and no fonnal investigative training was of'fered. The investigators
learned "on the job" and appeared completely dependent upon thoir supervisors. The
investigators expressed no 0agern6ss to root out couuption or solve probiemg and did not seem
empowered to make any independent decisions. Our clear sense was that the investigatoru were
nrore intent on olosing cxes than solving them.
3e A second unit onner did file a rfrltten cornplaint, but even the addition of a statement ftorn a second unit ormer
was insuflicient to conslitute'revide$ce" to the investigator.
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tqlu -: r ,,1r.'.1 . .,,1r:.1".,.ti:_?ryJ|iytillllBi
One condo unit owner testified to numerous complaiuts filed rvith DBPRabout her condo
board, alleging acts that wele astounding. In 2013, the boarrd voted special assessments of nearly
$200,000 in order to obtain a certificate of occupancy for the building. The money rilas spent,
but no certificate was ever obtained. Approximately $60,000 of additional association firnds was
spent on a lobbyist to ask the CiE of Miami to reduce or eiiminate $54,000 in fiaes.a0 The unit
owner complained that two directors of the board never showed proof that they had paid their
share of the special assessrnent, Despite repeated requests to the PMC and the board nrembers
personally, no records proving they had made such payments were eyer provided. The unit
owner later learned tlut the board was tying to take out a $150,000 loan with the justifieation
that it was to obtain the cetificate of occupancy
When the complaining ou&er h'ied to run for a seat on the board to end the antics, the
cordo board canceleci the electionl The complainant had to pay over $3,000 for her own
attorney to pursue arbitration for the board's faihue to hold elections. The dkeotors hired
attonoeys to defend the actions of the condo association board. lVhile the arbitration proceeding
meandered its way through the DBPII the old board continued to serve. Ultimately, the
complainant rvon the rubitration Howeyer, the assosiation had to pay the $25,000 fee that the
attoraeys hired by the assooiation charged - to lose the case. The canceled election was not held
until a full year later. At the tirne the witness appeared before the Grand Jury her numerous
complaints about being denied access to records remained open with DBPR, The frustration of
this witness was appar-ent to us aIl. She has written to nearly every major figute at &e DBP&
and inside the state governrnent, including the Governor.4l She cannot understand why the
DBpRalloWs this behayiorto go o*, and frankly, neither can wel
D. BOARDELECTIONS
In addition to the tblee (3) major areas of soncsr& the Seleot Committee also noted that
there were a number of complaints conceming association election procedures, primarily
concerning rccall elections.a2 The committee failed, to reach a consensus on horv to tesolve the
problems and recommentled that the DBPR examine the issues and propose statutory ohanges.
{ There \yas no evidence tlrat the fees rvere reduced or eliminated due to the efforb of this "lobbyist.* In any event,
paying $60,000 to reduce a 354,000 debt seems like a quoslionable investment.
or We have only elaborated on a fsn'of this rvitnass' misfortunes rvith her condo board and theDBPR-
'2 Final Report of the Select Committee, p. 11, Florida Statuto 7l8.ll2{2)0) contains provisions for t}re recall of
board rtrernbers.
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_f -" -'a'_'':FriffigEr{l??ff Rlit{-Y{'j5:' qa,;5'
Unfortunately, this Grand Jury has learned that election issues are still a major area of concenr
for unit owngrs. We too ate concerned and our concerns are several-fold.
First, Seotion 718,112 of the Coadorninium Act has very specific processes, procedures
and prerequisites for unit owners who intend to run for of&ce and/or vote in the eleotion for new
board members at the annual meeting.a3 At least "60 days before a scheduled eleotion, the
assooiation sha}l mail, deliver or elecfuonically subrnit... to eaohunit owner entitled to a vote, the
first notice" of the date of the election. A unit olrmer desiring to be a candidate fot the board
must give written notice of his or her intent at least forty (40) days before a sgheduled election.
A second notice of the election, together with an agenda and ballot that lists all candidates, must
be sent to all unit owners ent4e.d to vote. @mphasis added){ A witness explained that one
tastic used by some associations to impact the eleotions is to intentionally delay noti$ing unit
owrlers of their delinquent assessments. Unit owners who are delinquent cannot vote in an
election nor can that unit owner serve as a boald nember. To avoid this tesult, we rccorwnend
thilt st least 90 days before an election the assoctatlon shall send out notices af delinErcnt
assessrftents to all affected unit owners. This notice gives the unit owuer at least tbrrty (30) days
to ty to rectify and/or pay any outstanding or delinquent assessments. This ohange in procedure
will alloiv for grrater participation of unit owneffi in the elections and onthe ballots.
Fraud in the election process itself was a major fastor impactirrg unit owrers. As
previously indioated the election at one condo association was fraught with fraudulent activity
that incltrded the following actions:
o A unit owner was so frustrated with the actions of her coado board that she decided to
run for a directorpositioq
o An Election Monitor was present for the elec'tion. He received sealed ballots from three
different sowces;
" Sealed ballots were provided by the directors to the Election Monitot;
" Sealed ballots were provided by the cotrdo's management company to the Election
Monitor;
o Sealed ballots were provided by &e urit orvner candidate to the Electlon Monitor;
al Section ?18.1 l2(dp,3 and 4n Se etion ?18. I I2(d) 4.a
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. -\n .rg.l!]Tfq" .r: *.{iii:.:i3JErlt{tt-.
c The seaied ballots provided by the unit owner rvere collected by going door-to-door to
pickup the ballots ftom ownes who supported her candidacy;
o Before the ballots were opened, the envelope for each sealed ballot was starnped in a
certain section based on the soruce of the ballot (directors, management company ot
candidate);
. As the Eleotion Monitor counted ballots, he discovered there was some double vefirrg, ft
appeareil that many unit ounrers had submitted two sealed ballotsi
o The candidate realized that some of the double votes rvere of orvners &om whom she had
collected their ballots personally. She contacted those ownefi and asked them to come
dolvr:stairs rvhere the votes were being counted;
c Those owners identified their signatures on the true ballots and saw their names on other
ballots, purporledly slgned by those owners. The signatures on the other ballots were
forged, notarized and dated;
o Other o\wers identified their true ballots and identified forged signatures on ballots
containing their narnes. Those bailots rvere also notarized and dated;
n All ballots rvith forged signatures were notarized by the same notary on the same day;
n Some unit owners whose names were on forged baliots wete not in the country on the
date the notary verified their signatwe and identity;
o None of the unit o*ners whose signatures were forged and notarized had et er met the
notery;
o The notary who notarized the ballots wittr the ftaudulent signatules later admitted that
the ballots rvere not signed in her presence;
o The existing board members submitted signed, sealed ballots to the Election Monitot
that were purportedly from absentee unit o\yne$. Surprisingly, those envelopes from
owrlsrs who were not living in the condo, were not postnarked;
c Fifty-seven (57) ballots were disregarded for double yoting;
o T'rventy-six (2Q ballots rvere diuegarded as a result of forged unit otvner signatures;
. Due to the special type of envelopes that rvere used by the management company and the
ballots submitted in those envelopes, the Election Monitor rvould be able to identify the
source of most ofthe fraudulently obtained, forged irnproperly notarized ballots;
e It would appear that both the existing board members as well as the management
company rvere involved in fraudulent activity in connectlon with the election. The
evidence of the fraud rvas contained on the ballots as well as on, and within, the
envelopes.
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36
ffi
The election monitor present at the slection neeting lvhere these events ocourred filed a
report confrming many of the bullet entries above. Further, depending on wheiher ballots were
turned in by the o\ryrers, turned in by management or collected en masse and tumed in by a unit
own6r, the electionmonitor stamped eachballot envelope suchthatthe sourcs ofthe ballot could
be distinguished. Identifring the source of the vadous double voting ballots and the forged
signature ballots could bave beeo accomplished had the election monitor maintained possession
of all of the ballots and envelopes. Wb knew that tbe notary public engaged in ftaudulent
behavior as she knowingly rtotarized purpofied signatues of sorne unit owners u&en she larew
those ballots lvere not signed in her presence. However, even knowing the identity of the notary
and being able to prove that she notarized documents that were not signed in her presence is
useless; her actions did not constitute a crime because the documentsnotarized were rot done in
connection with a stahrtorily recognized *official election proceeding," IVe shongly believe this
slrort-coming encourages persons to engage in fraudulent election procedrres as a means of
obtaining or retaining a seat on the board of the association.
The facts surrounding this event were so ouhageous that details of certain aspects of this
election ended up being reported in the media. On April 20,2}l6,the Miami Herald published
an article entitled, Documerrts Meant To Coln!.at Fraud"lLCondo Eles$on Raise More
Ouestions. The article described in detail how owners living at two (2) ilifforont condos
managed by the s*me m&nagement eomBany onded up rvith a great number of "notarized"
ballots purportedly submitted by unit owne$. However, many of the owtrers stated they never
signed those ballots; the sigaatures affixed to those ballots were not theirs, and they had nevet
met the lvoman who notadzed the signature on the suspect ballots. At one condo association's
annual election the presence of &audulent notarized ballots and the ensuing double ballots
reportedly resulted in an illogical and impossible 115 % voter turnout. We received testimony
that coroborated many of the facts set forth in the norvspaper artiole. Why do we make note of
this artiole? Because it is firrther indication of the lengtbs persons will go to maintain their
fiefdoms, often at the expense of those they should be serving,
The existence of this article and &e contents therein, underscore the need for a tenerved
focus that is aimed at ensuring fail elections and filing cdminal charges against those who dale
to corruptthe process with fraudulent activity,
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37
."-, r li;rr. tlf .r=ir:$d : f,..r!igTl!!:. _q!
Accordingly, we recommend thttt qny person or enti(y that engages in ary fraudulent
activity conducted in conneetion tyith the election of board tnembers for the association sholl be
subject to tbrinal liabitity.
Wefurther recommend thut any director, LCAM mancgement cofiWany, notary, altotney
ar any atlrcr persot tvho engages in, ar $,ho conspires with aftother petson to engage in
frauclulent election actittity shall be subject to whninal charges classifierl as a 3'd degreefetony.
Wefirther recommend that any BoaM Director of a condo assoclalionwho enters a plea
of guilty ar nolo contendere, ar who is found gilty of any such criminal violalion or frattdulent
condnct, ineludlng electionfi'aud or intentlonal destruetion of aficial recot'ds of the associatton,
shall be permanently bated by the DBPRfi'on servlng ofi any other condo board in the State af
Florida.
Wefitrther recomnend that any LCAMwho enters a plea af guilty or nolo contendere, or
tttho is fourtd guilty of ony such uirninal vlolation or other fi'audulent conduct, shall be issued a
mandatory license suspension by the DBPR of no less than twehe (12) montlts fot a Jirst
violation. Fot nny subsequenl violation, the DBPR shall permanently revoke their license.
Election Monitors
In the above-desmibed fraudulent electiorL an election monitor was present The monitor
was rcquested because some unit owllers were cons€rned about the upcorni:rg election- Under
Chapter 718, if unit owners have concen:s about the iutegrity of an upcoming election for the
board of directors, they rnay request that an elestion monitor attend the eleotion. An election
monitor will be appointed if 15% of the total voting interests in a condominium associatiorl or
six unit o\trners, whichever is greater', petition for a monitor.
In the abovedescribed fraudulent electiorq an election monitot was appointed by the
Ombudsman. As revealed by his actions in sramping the various stacks of balloh (based on the
source from rvhich they oame) it appears that he was very knorvledgeable about the task he had
to perform. Although the election monitor was able to detemrine that fiaud was "afoot," there
was nothing he could do to cancel or void the election results. Even though it was olear that
there were forces at work trying to rig the election, his chatge as election monitor did not
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38
authorize him to try to determine lvho lvas responsible for the fiaudulent activity. He did not
have the powff to take possession of the "eyidence" of the fraud, namely, all of the envelopes
and ballots. Absent the evidence, thele was nothing law enforcement could have done to
deteraine B'hether any crimes ryere comrnitted and who committed them. 'We believe this is a
tremendous oversiglrt,
This Grqnd Jury recommends that if circumstances are such thqt an election monltor
needs to be present, that the election monitor lws the pover and authority to:
l) En*u'e the integrlty ofall ballots submilted;
2) Ensure the integrity of theproeess ased at tlrc Annual Election;
3) Confirm that all notice requirernents mtd prereguisites were met tn advance af the
Annual Electiory
4) Takepossessionofall envelopes, ballots andother election-relqtednwterial;
5) Provide copies of all such docuntents ta fhe lmr enforcentent agency that has
jurisdiction over the locationvhere the Anrual Electionwas held;
6) Cancel and invalidate Annual Electlon results when there * a clear demonsh'ation of
fraudulent activity;
7) Wherefraudhas ocantrcd, oder anotlrcr eleetion;
8) Attend and serve as election manitorfor the "do-over" election;
9) Prepare and submit a detailed report of the events and findtngs andforuard to latv
enfotcetnenf and the DBPR;
lQldentifl in that repott sny pwsons.fornd to have engaged in fraudulent activity in
co nnect i on wi th the Annu al EI e cti on;
11) &mtnon lmr enforcement to the Amual Election, if needed.
Bmporvering the eleotion monitor to act in accordance with the mandate above should go
a long way to reduoing the number of contested Annual Etrections shenanigans. Having an
election monitor with such poweffi present for the Annual Election should also help restore
integrity to what may have been questionable eleotion practices of the association in the past.
And finally, having election monitors who are charged specifically rvith ferteting out any
inappropliate or fraudulent aotivity should be a comfort to unit owners and an encouragement to
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Page 429 of 1124
39
e-.6 .r1,r?qtaEf,IF. jj!qi,,:!R.s'Ix.--qf F!
those who had thought about running for office, but who failed to do so out of fear that the
election vould be rigged.
We received information that years ago DBIR had a certification process for all election
monitors. It is our understanding that the certification process is no longer utilized. Ilowever, in
light of the expanded polvers that we have recorunended, we believe that those serving as
elestion monitors should be required to undergo training and certification.
Therefore, v,e recoilthend that thc DBPR restore the certificatlon process for election
monitors. W? also reeonnnend thal the tralnlng portlon of the certlfication be modified to
provi de speci alized h' ainlng far the expanded dutt es recommended ab ov e.
Druing our term, we became a$,ar€ of a television news report that was published online
on October 25,2016, entitled l'Condo Crime Fq4+ily" Pleads Guilty To Felonies. The news
report describes members of a family (a manied couple and their daughte| who, for close to
twenty (20) years, wore engaged io illogal behavior aud took actions that were injtnious to the
associations for which they wer.e serving. According to the article, more than thirry (30)
complaints were filed .with DBPR ranging ftorn "rigging elections to stealing funds." The
defendauts were able to cornrnit fraudulent acts due to the positions they held with the
association. They were able to hold on to those positions due to their ability to rig the elections.
Despite al1 the complaints to DBP& family members were also able to keep theit property
managff licenses. Were it not for a lead generated by local law enforcement in an unrelated
oiminal matter, the family may not have besn stopped.
?ersons who are not acting in fiduoiary capaorty torvards the unit owners should have
every possible obstacle placed in their path to prevent them ftom creating Bny more havoc or
committing other crimes. Directors will be hard-pressed to commit such acts if they are not in
those posifions of power.
Hbw was the "condo crime family" able to steal money and stay in business rvithout
being caught? Did they fail to have the required financial statements prepared on an annual
basis? Did &ey have financial statements prepared that rvere doctoled? Did they fail to respond
to unit ormers' requests for copies of official recot'ds of the association? Based on the reported
thi*y (30) complaints filed over the years, we oan safely assurne that they probably engaged in
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40
.1 1:r ?T8r'rsr
011 that and more. For all of these reasons, it is critically important that DBP& the associations,
the Ombudsman, and the management companies do a1l they can to maintain the integrity and
fairness of boarrd memberc and board annual elections.
rV. $IOI'LD ENFORCEMENT OF COI{DO I,AWS RBMAIN WTTH DBPR?
One of the ploblems with DBPR may lie in the sheer number of areas that it regulates.
According to information found on its website, "[tJhe Department regulatss the follorring
businesses and professions: Alcoholic Beverages & Tobacco, Certified Public Aecounting,
Athletic Agent, Asbestos, AuctioneeE Barber, Building Code, Community Association Manager,
Child Labor Progtam, Cosmetologisf Condominiums, Timeshares, & Mobile Homes,
Constructiorg Eleshical Conbactor; Employee Leasing Farm Labor Prograrq Geologist, Home
Inspection, Hotels & Restaurarrts, Landscape Architecture, Mold Related Services, Professional
Engineer" Pari-Mutuel Wagering, Real Estate Appraisers, Real Estate Commissiort, State Boxing
Commission, State Pilot, Talent Agency, Veterinary Medicine, Drug, Dwices, and Cosrnetics,
and Unlicensed Activity."a5 Looking at this wide anay of pro&ssions and services one cannot
help but recall ttre comnrent, "a jack of all trades, a master of none."
The present areas of responsibility for DBP& the inept manner in whioh they handle this
area of responsibility, and an apparent nonchalance from the DBPR wibsesses who appeared
beforc us lead us to wondel whether it might be more effeotive to totatly remove this area of
oversight fmm DBPR and place it elsewhore. Although we do not have suflicient information to
make a specific recommendation for placement, should the investigalive arm of DBPR be
reassigned, 'fi,e hsle specffic recommendatiansfor the receiving depcrhnent or ogency.
o The hwestigative artn af the new department must have irwestigalors who huve training
and experience in basic investigalive techniques (includlng criminal.investigations);
e The ne$ depat'tment mrnt hwe the quthority to conduct #iminal iwestigations;
o ?lu new deparhnent invesligatols trutst have the authorily to take si'arn stqtements and
collect evidence;
. The na+, departmenl investlgdors must be glven the authority lo initiate investigations
based upon their personal obsetyetions.
s http #wrvrv.myfl oridal ic ense, corn /dbpr/os/OpenG owrnrnent/GovQA.hhrl
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V. CONCLUSION
We commenced oul investigalion of
unresolved complaifis and issues between
this topic after receiving information about
condo unit owners, their boards and condo
associations. After delving into this area, we dissovered that there have been many years of
condornini.um association pmblems that have afiflected num.erous condo unit oumers and residents
within the State of Florida. Our iwestigation exposed, Aom our perspective, severe weaknsssss
within the cun'ent laws and regulations that govenr condominiums, their boards and theit
associations. Because the condo laws and regulations lack "teetho" board directors, management
companies and associations have beeome emboldened in their willful refusal to abide by and
honor existing laws in this area They even eogage in ftaudulent activity which goes
unpunished.
This Gmnd Jury has set forth recommendations in this report that are designed to curb
that inappropriate behavior. 'We strongly believe that raising the bar on the possible
consequences for such behavior will s€rve as a deterrent. Accordingl;', we have tecommended
that the legislature make it a uime for directors and officers of the assooiation to engage in
certain wilful, reckless or fraudulent aots- Similarly, we have asked the legislatnle to amend
other statutes to preclude directors and offrcers of condo associations ftom engaging in self-
dealings. Finally, among other things, we have included recommendations that will empor.ver the
DBPR to suspend or revoke licenses of LCAMs or condo property managernent companies that
enga.ge in inappropr{ate behavior.
Wi& these legislative changes, ive will need a robust aud energized agency to enforce the
provisions of the new laws and regulations. Based on our inloractions with their ernplo5,ees, the
Department of Business and Prrofessional Regulation seems ill-suited to carry out this mission.
To effectively address the condo owners' pleas for he$, the Department will rieed investigators
who are trained and skilled at conducting criminai investigations. They will need the authotity to
initiate such investigations if they receive information about wrong-doing or other fi'audulenl
aotivity occurring.
Notwithstanding the number of complaints from unit owners, for too long, we believe the
legislature, &e DBPR and local law enforcement have failed to make this a priolity. To address
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ry ?--!-r. l
42
this ongoing problerq we will need focused and continuous cooriclination and cooperation
between and among our vatious stakeholders on the state antl local level. By implementing these
recommendations and rnaking this a top priority, we just might be able to finally respond to and
resolve the condo owners' pleas forhelp.
VI. RECOMMEI\IDATIONS
As lo uccess fo ofrlelal rccorils of the tssocialiort we tecorrrrnend that:
. Florida Statute 718,J1] (12) (r) be amended to provide that Directors arrd members of
the board or associqtion vho villfilly and repeatedly fatl to comply tvlth their statutory
obtigation to appropriately and timely respond to v,ritten requests for fficial rocorde of
the association (rnore than hvo (2) violations within a rolling hyelve $2) nanth pertod)
shall be perconally ltable for paymmt af domcges to the requestfng unit owner(s);
e That Dlrectors and members of the board ar assoeiatlort who lonvtingly or intentianally
deface or destroy occounting recardi or fail to create or malntain such records that are
required by latt shall be a'irninal[y liable for such conduct. We recorwnend that eaeh
such act will constitute a Second Deg'ee Misdemeanor for a Jlrst offense, and that any
subsequent offenses or violations x,lll constitt$e a Jst deg'ee misdemeanor;
o That any association, boord director, management compafiy or mdnqgetfient contpany
ernployee v,ho trilfuIly, lmowlngly or intentional$ refwes to relearc or atherwise
produce offictal qssociation records, qnd such refusal is done to facilitate or covey-up
the coownission of a a'irne, shall be criminalty liable for sach conduct. The violation
shqtt be elassified as a i'd clegt'eefetony;
o That nwnage$refil companie* tphich sever their lies or terrniwte their contractual
*greements *ith condo a"ssaciation$ nrust h$n over all olSeial records of the assoclafion
to the association within ten {10) business days. A matragement company tha fails to
turn over the association's ofiicial records wlthin that time-fi owe shall befined at arate
af $1,A00 per dayfor up to ten (10) days and then thereaftet, shall be subject to a
tnandalory license swpension unttl all records ate hffned oyer,
As to conflicts of interests for condo board dbectors and cottfitcts af intercsts for PMCs we
recommend tltat:
The legislature amends Florida Slatuts 6]7.0832 ta make the provisiorx of that stcttute
inapplicable to directors of condominitmt associatiow.
The DBPR create a nev, ruIe that requires PMCs to provide notfication and disclasure
lo the Board and condo associationresidents ofany/inancial dealings and/or interests
the PMC has with dny cantpany, cotpototion or efttity being recotxmended to the
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Associatian Boayd by the PMC, Failure to provide such nafiee shall result in
cancelloliatz of qn), contractual qgreement entered inlavith the associationwithout sttch
nolifi calion or discl osure;
o In any siluation tphere a PMC is recommending that a condo association enter lnta a
cottttoctilal agreeilrcnt utith any company, eorporation or other entlty trith which the
PMC is afikated or lws some other type interest ar relattonshlp, prior to wting on any
such canlract, the Baqrd of Dh'ectors for the association shall first be required to obtain
at leqst three (3) bids froru tmrelated contpanles, carporations or entities providing
those sane seryices. Such infornatian shall be providedto all unit o$,ners at the board
meeting +vhere the vatlng otr said conlract tvlll take placa
As to condo wsocinlion onnual elections andlraud conoected therelo, we rccommmd thtrt:
c At least ninely (90) days before an electian the qssociatlon shsll send out nofices of
delinErcnt assesstnefits to all affected tmit owners;
. Any person or entity that engages in any fraarlulent aetivily conducted ln connection
with fhe electlotr of board memberc fu the association shall be subject to crininal
liability;
" An! dlrectar, LCAM, manqg€rnent compafiy, notary, ottotney or any othet person \vho
engsges in, or who conspit'es wlth another person to engage in fraudulent election
actfuity shall be xbject to uiminal charges classfied as a fd deg'eefelony;
. Arly Bom'd Directar of a condo s.ssociation who enters o plea of guilty or nolo
contendere, of who is found gilty of any swh criuinal violation or fi'aadulent conduct,
lncluding election fraud or lntenlional destntctian of oficial records of the associqtion,
shall bepennanently barred by the DBPRfrom seruing on any other condo board in the
State ofF{ottda;
c Any LCAM v,ha enters a plea of guilty or nolo cantendere, ar who is fomd guifiy of any
such criminal ylolation or otherrt'atdulent conduct, shall be isxir,d a mandatory ltcense
suspensionbytheDBPRofnolessthanfryelve(12)montfuforafirstviolation. Forany
subseqtunt violation, the DBPRshall permanently revoke their license.
As to expanded powerc for election nronitors, tte recorwrrenil thar the DBPR anpnd lls tules to
ensut'e that eleclion rnonilors have tltepower attd authority to:
I) Ensure the integrity aJ'all ballots subrnitted;
2) Enau'e the integrily o/the process used at the Annual Blection;
3) Confinn lhat all notice requirements and prerequisites tvere met in advance of the
Anruul Election;
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4) Takepossession af all envelopes, bollots and other electlon-related material;
5) Protide copies of all such doaonents to the law enforcement qgency that hasJurisdictian
over the location$here the Annual Electian $,as held;
6) Cancel snd invqlidate Anrunl Election resrits when there is a cleu demonstration of
Jiawhlent activity;
7) Wherefraud hcts occarred, order qnother election;
8) Attend and serve at election monitor for the "do-over" electlon;
9) Prepare and submit a detailed report of the epents and fmdings and forword to ls*y
enforcement cmd the DBPR;
l0) Identtfy in that report qny persaw found to have engaged ln fraudulent activity in
connection wilh lhe Annual Election;
I1) Summon law enforcement to the Anrutal Election, if needed.
As to electiott ntonilortrwe recorumend that;
c The DBPR restore the certificatlon process for election tnonitors;
c The troining porlion of the certification be ntodiJied to provlde specialized trainingfor
the expanded eleclion ntonitar duties recommended above.
If tlre Bureau af Complicnce's respofisibtltties arc separatedfrom the DBPR tte recomffiend
that:
c The investigative ann of the na* departtnent milst have investigators who have traintng
and experience in basic investigalive techniques (including crtmiwl investigatiow);
. The nev, deparment mwt hwe the authority to conduct giminal investigatians;
c The new deparfittent investigt$ors must have the authorl$ to take sll,orn staternents and
collect evidence;
o The nat depatbnent investigalors must be given the a$hority to initiate investigalians
based tpon thelr persowtl observatiotts.
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New Business and Commission Requests - R9 X
MIAMI BEACH
COMMISS ION ME II,IORAN D U M
TO: Honorable Mayor and Members of the City Commission
FROM: Mce-Mayor Kristen Rosen Gonalez
DATE: March 1,2017
SUBJECT: DISCUSSIOI\YUPDATE ON THE PROGRESS IVIADE BY THE ADMINISTRATION
TO IMPLEMENT TROLLEY SERVICE FROM MIAMI BEACH TO THE WYNWOOD
AND MI DTOWN NEIGHBORHOODS.
ANALYSIS
On the February 8,2017 Commission Agenda, I placed a discussion item (Rg H) regarding
Miami Beach offering a trolley loop to the Wynwood and Midtown neighborhoods in the City of
Miami. I uould like to receive an update on the progress made by the Administration to
implement trolley service from Miami Beach to the Wynwood and Midtown neighborhoods.
Legislative Tracking
Vice-Mayor Kristen Rosen Gonzalez
Page 1094 of 1120
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New Business and Commission Requests - R9 Y
MIAMI BEACH
COMMISS ION METIIPRAN D U M
TO: Honorable Mayor and Members of the City Commission
FROM: Mce-Mayor Kristen Rosen Gonzalez
DATE: March 1,2017
SUBJECI REPORT ON THE $3.6 MILLION THAT WERE ILLEGALLY TRANSFERRED
FROM A CITYACCOUNT AT SUNTRUST BANK.
RECOMMENDATION
Please provide the City Commission with an update on the $3.6 million dollars that were illegally
transferred from a City account with SunTrust Bank.
ANALYSIS
ln December 2016, the City Manager notified the Commission that the City had been the victim
of bank fraud with respect to one of the its bank accounts at SunTrust Bank.
I would like to receive an update on the $3.6 million dollars that were illegally transferred
from the City account. Please provide all pertinent, public information, as well as the status of
the recapture of the funds.
Legislative Tracking
Vice-Mayor Kristen Rosen Gorvalez
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