Who Do You Call? Fraud, Mismanagement and Rule-Breaking

In most instances, the board or management team of a condo or HOA is equipped to handle the wide variety of issues that arise day-to-day, from a leaky roof to dealing with municipal bureaucracy. There are other, bigger issues—things like embezzlement and fraud, for example—that require experienced outside professionals to resolve.

“Directors in Florida are held to a standard of care that requires them to seek and rely upon the opinions of trained professionals where appropriate,” says Attorney Jonathan S. Goldstein, a senior associate at the law firm of Haber Slade in Miami. “In many instances this includes legal counsel, because there is an element of legal compliance and there are potential risks and liabilities in taking various types of actions.”

The State of Florida provides a number of rights for condominium owners through Chapter 718, Florida Statutes, also known as the Condominium Act, notes Chelsea Eagle, deputy director of communications for the Florida Department of Business and Professional Regulation (DBPR). Board members, under this provision, are held to account.

Eagle points to the Act, which states: “A director is expected to carry out his or her powers and duties, as any other ordinarily prudent person would do under reasonably similar circumstances. Directors have a fiduciary relationship with the unit owners, and have the responsibility to act with the highest degree of good faith and to place the interests of the unit owners above the personal interests of the directors.”

She continues that DBPR is a regulatory agency that enforces administrative law, as opposed to criminal law, for more than one million of Florida’s businesses and professionals. “These include community association managers, condominiums and cooperatives,” she says.

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2 Comments

  • How do you go about filing a complaint against Board and Prop Management for financial mid management? We suspect the board has exhausted its op ex budget on items that are deemed Capital Expense. The Board is now asking for a vote on Special Assessment to cover items.
  • My friend was appointed as sec/treasurer to her board in December 2018. She is not permitted to sign on checks although our docs say 2association only signers property management sent her thumb drive with financials and if she wants to see more she has to go to attorney office. She discovered a solid case of fraud/theft by president and told manager and told president. Her and another board member that supported her are being recalled by president. She has solid evidence and recordings of how she has been bullied and and belittled. She is a senior from Brazil who has lived here 40 years and is only one who stands up to them she is filing with DBPR. Our attorney for over 25 years supports manager. Don’t have money for attorney. What can she do. 3member board in 14 unit condo that is part of 19 condo run by same co