Pressured by community association advocates throughout the Sunshine State, the  Florida Legislature backed off a proposed bill (HB 5005) that would have  eliminated licensing for community association managers and deregulated the  industries overseeing condominiums, HOAs, mobile homes, timeshares and  cooperatives.  

 The legislation was part of an effort by the legislature and Republican Gov.  Rick Scott to deregulate more than 50 industries and reduce state oversight and  regulation. The bill also would have dissolved the Division of Florida  Condominiums, Timeshares, and Mobile Homes, along with hundreds of jobs, and  put into the state’s operating budget coffers the division’s $6.1 million trust fund that is used for enforcement actions, funding an  office of condominium ombudsman and the alternative dispute resolution program  that benefits homeowners.  

 The two proposed committee bills (now known as HB 5005 and HB 5007) easily  passed the legislature’s House Business & Consumer Affairs Subcommittee on March 15, and were next up before the House  Economic Affairs Committee on March 24. The aim of HB 5007 is to streamline and  reduce current regulations in the affected industries.  

 The Community Associations Institute (CAI) representing Florida’s chapters sent out a legislative alert to their membership urging opposition to  HB 5005—the deregulation legislation. They requested that members contact the Speaker of  the House Dean Cannon, and members of the Economic Affairs Committee and let  them know of CAI’s opposition to the bill. “It is important that they hear not just from CAMs, but also from the community  associations that employ CAMs,” the alert said.  

 A Victory for HOAs and

 Community Associations

 Donna DiMaggio Berger, Esq., managing partner of Fort Lauderdale-based Katzman  Garfinkel and Berger, and executive director of the Community Advocacy Network  (CAN), also sprung into action, mobilizing her HOA membership within the  community association profession. Collectively, they urged legislators that  deregulation would have had grave consequences for HOAs and community  association managers.  

 The House Economic Affairs Committee voted 12-6 to remove provisions relating to  condominiums, HOAs and the community association management profession from the  bill, much to the delight of Berger and her constituency.  

 “Well, obviously I'm delighted,” Berger said in reaction. “We had been gearing up for a much lengthier battle, and the fact that were able  to get a proposed committee substitute in two weeks to take out all the  language deregulating community association managers in Florida as well as  eliminating the division—it's incredible.  

 “And I blogged about it the other day—it just goes to show when you got a group that is well-informed and organized  what they could do. We created the Community Advocacy Network back in 2007 and  we were gearing up for what I call 'the big one'—and I think ripping out the framework qualifies as 'the big one.' And it's nice  to know when you create systems and when they finally get into play that they  work and I think that it shows it works. Before now, ordinary citizens didn't  have the ability to quickly mobilize and become a part of the process and  really make change,” Berger said.  

 She noted that the dereg bill is still moving forward in the legislature and a  number of other professions are proposed to be deregulated. The fact that  community association residents were able to mobilize so quickly and were so  organized is the primary reason that they're no longer part of that package,  she said.  

 HB 5005 if not further amended would repeal licensing and examination  requirements and penalties for specified professions, occupations, and  businesses currently regulated by the state, including the following: Athlete  Agents; Auctioneers and Auctioneer Apprentices; Sellers of Business  Opportunities; Charitable Organizations; Hair Braiders, Hair Wrappers and Body  Wrappers; Dance Studios; Health Studios; Interior Designers; Intrastate Movers; Motor Vehicle Repair  Shops; Sellers of Travel; Telemarketing, and Yacht and Ship Brokers. It also  includes provisions related to water vending machines; television tube  labeling, and sales representative contracts.  

 Berger said that it was part of their job to educate legislators about community  association living. She said the bill sponsor is from Hialeah, which is not  home to a lot of associations. “It's our job at CAN and other groups around the country to educate our public  policy makers who might not have a lot of associations in their district. Maybe  they have never lived in an association. Maybe they don't have a lot of  familiarity about how associations are run or what they mean.”  

 Could Have Been a Sea Change for Condos

 “If this monster deregulation bill passes with the condominium and CAM provisions  intact, life would change dramatically for the more than 55,000 community  associations in our state,” Berger said prior to the most recent committee action removing the deregulation  provisions.  

 “Condominium owners would no longer have the division to turn to as a source for  alternative dispute resolution pertaining to election and recall disputes and  financial improprieties. Similarly, HOA owners would no longer be able to ask  the division to sort out their election disputes. Most of those disputes would  wind up in our court system to the undoubted dismay of a Florida Judiciary  already struggling with clogged court dockets,” she said.  

 Now that the battle has been won, and joking that she now has “free time,” Berger cautions that the fight is not over. With 41 days left in the  legislative session, there are more than a dozen bills that CAN is still  tracking, she said. For example, one bill would have allowed process servers  access unannounced in common elements and limited common elements. So CAN  alerted the bill sponsor, Sen. Gwen Margolis, (D-Broward, Miami-Dade), that  some high rise and condominium developments had private elevator access that  open up directly into a person’s unit. Subsequently, because of their intervention, the language was changed in  the bill.  

 Kenneth S. Direktor, a shareholder with the Fort Lauderdale law office of Becker  & Poliakoff, also was happy that legislators had a change of heart.  

 “I am very pleased with that outcome,” said Direktor, “and it shows that the legislators are responding when they hear from their  constituents, because there was a substantial volume of emails and phone calls  and faxes in response to the alerts that were sent out that told people about  this bill. The legislators heard loud and clear that this was simply not a good  thing for millions who live in Florida condos and co-ops.”  

 It was important to keep the licensing and enforcement framework intact, he  said. If the bill had passed as intended, the failure to monitor the situation  or provide boards with some oversight would clearly have been a recipe for  disaster, according to Direktor. “These boards are so vulnerable to abuse, whether it be through deliberate action  or inadvertence. It is far too important an industry in Florida with well over 40,000-50,000 community  associations operating in this state—it is far too important for them to be able to have competent management for  this industry to be completely unregulated.”  

 It is good news that the division will still be available to mediate disputes,  he said, and not funnel everything to the courts. “Absolutely, unequivocally. Not to mention the fact to having the division  available to continue to arbitrate certain disputes is a good thing again for  all the reasons I gave you last week because it gives us a forum of people who  are actually trained on community association issues as opposed to judges who  have to master all the legal issues. And it gives us a forum of people, who are  able to expedite these resolutions so these disputes can be handled without the  incredible time delay and expenses associated with court litigation.”  

 Florida’s community associations still have a lot of things on their plate, including  the state’s financial crisis, so this is one less thing to worry about, said Direktor.  

 “There's a lot of other things that are still pressuring community associations,  the most notable is the foreclosure crisis,” Direktor explained. “But the fact is, I think this is one additional piece of legislation, which  could have created more problems that it solved. And I think maybe you're  correct when you say a sigh of relief because we don't need any more problems. We're having a tough enough time collecting our  assessments, paying our operating expenses, and complying with the intense  regulatory framework that already exists without having to do so without have  the ability to rely on our management to have licensure.”  

 Leslie Kaminoff, the CEO of AKAM On-Site, Inc., a Boca Raton-based management  company which also has offices in New York City, said he supports licensing of  community association managers and believes the state is going about  deregulation the wrong way. Deregulating certain professions might be advisable  but not property managers, Kaminoff said.  

 “I can understand that for a barber shop, for a cosmetologist, but for someone  who’s responsible for a $40 million dollar condominium? That’s why when I look at that list of who’s included, community association managers shouldn’t even be in the list,” said Kaminoff.  

 He is happy that the legislature reconsidered. “Now that the state has spent some time looking into this matter, I hope they are  acknowledging that property management is a true profession and must be treated  as such,” Kaminoff said. “In my opinion, this means finally putting gin place meaningful licensing and  education requirements that make a real contribution to the quality and value  our industry brings to itself and to our clients.”  

 Kaminoff continued, “The practice of property management puts us in a true fiduciary position. I hope  that’s what the Florida State Legislature saw and understood when they re-thought the  possibility of removing these requirements from our profession.”  

 Leave it Alone

 The current framework allows homeowners to pay for services provided by the  Division of Condominiums, Timeshares, and Mobile Homes. Currently, according to  Berger, condominiums pay a $4.00 per unit fee to the division trust fund to pay  for the division's functions such as education and arbitration. Every year in recent memory, she added, the trust fund had been raided by  various governors to address the budget deficit. If the bill passed and the  division was eliminated, there would no longer be a $4.00 per condominium unit  fee. Any monies currently remaining in the division trust fund would have been  earmarked towards general revenue and not be returned to the owners who paid  into the fund, she noted.  

 While the existing system was not foolproof it was better than no regulation at  all. “State oversight of the community association management industry was not perfect  but it was a deterrent to bad behavior. Doing away with regulation altogether  will most likely provide fertile ground for fraud to flourish especially here  in the Sunshine State, which has a long history of being attractive hunting  ground for fraudsters.”  

 Community association managers have an important job to do and taking away  licensing in a way reduces the industry’s credibility, Direktor said. “I think requiring some licensure for community association managers, which  obviously requires prerequisites in order to get a license—I think it provides a measure of protection that would otherwise not exist. I  think it helps when I'm hiring a manager for me to able to say, ‘Show me your state issued license,’ the same way I ask that question of a lawyer or a doctor or engineer or an  accountant.  

 Kaminoff added that he “stands in favor of licensing that is meaningful and whatever elevates the  industry to a real position of professionalism.”  

 A Dead Issue?

 Is Berger worried that deregulation will rear its ugly head again? Well, she  plans to reach out to legislators to make sure the concerns of community  associations continue to be addressed.  

 “If it hadn't been such a swift and decisive defeat two weeks in, I'd say maybe  it'll come back again next year,” she said. “I think legislators are starting to understand that these are very emotional  issues. We've got millions of people living in common-interest ownership communities in Florida., more than 60,000  associations in our state. Do I think that it will come back to continue  tweaking the framework? Absolutely and CAN has reached out to all the legislators and said, ‘We want to sit with you after the session’ because, look, there are many changes and improvements we can make, but ripping  out the whole framework is not the answer.”  

 If HB 5005 and HB 5007 are eventually passed and signed by Gov. Scott, the bills  would take effect July 1, 2011.   

 Debra A. Estock is managing editor of The South Florida Cooperator. Editorial  Assistant David Chiu contributed to this report.