Florida lawmakers amended a state law that governs the delicate balance of power between unit owners and investors at condo-hotel complexes.
The change, made during the ongoing legislative session, marks the second consecutive year that legislators try to tackle the controversy that’s shrouding many of the state’s condo-hotels. The mixed-use developments consist of individually owned condos, as well as commercial portions that include hotel rooms, spas, restaurants and other amenities that collectively are owned by investors known as “commercial lot owners.”
Some South Florida condo-hotels have hosted bitter battles between residents and commercial lot owners over which group has the right to own, control and levy assessments on unit owners for shared spaces such as pools, spas, lobbies, hallways, air conditioning systems and elevators.
Generally, condo-hotels’ governing declarations grant this power to commercial lot owners. This has angered condo associations that have decried a lack of control over maintenance and assessments. Commercial lot owners have countered that they rightfully have more control over common areas because they need to ensure the entirety of properties are kept up to the standards of a hotel.
At last year’s session, the state legislature codified commercial lot owners’ greater power in state law.
But after an outcry from condo associations and their attorneys, lawmakers this session approved new legislation that partly clawed back last year’s law by scrapping its applicability to existing condo-hotels. Under House Bill 913 and Senate Bill 1742, commercial lot owners have control and ownership of shared spaces only for condo-hotels with governing declarations that became effective on or after Oct. 1, 2024.
HB 913 and SB 1742 are now headed to Gov. Ron DeSantis for his signature.
“You look at the date when the initial declaration of condominium was recorded, which is the document that allows [developers] to sell condos, and that is the trigger for when there will be a decision whether [last year’s] law will apply,” said attorney Stevan Pardo, who represents condo associations in suits against commercial lot owners. “Any condo-hotel that was selling condos as of Oct. 1, 2024, or before that, [last year’s] law would not apply.”
Sen. Jennifer Bradley, who co-introduced SB 1742, said the legislation came about after unit owners at condo-hotels raised concerns with last year’s law.
“The response was pretty overwhelming from owners who live in these mixed-use buildings,” Bradley said. They were “very concerned that the … relationship they had in their mixed-use buildings was tipped too far in favor of the commercial [lot] owner. And I don’t think they are wrong.”
The issue has been especially pronounced at the oceanfront Carillon Miami Wellness Resort, a three-building complex in Miami Beach where the condo associations and commercial lot owner Z Capital Group have been locked into nine years of litigation. In court filings, Carillon residents have accused Z Capital of having unilateral control over common spaces and assessments, likening its power to a “dictatorship.” The case is on appeal.
Attorneys for Carillon residents say that the Florida Condominium Act clearly states that once units are sold out, control of shared spaces and amenities is passed on to the condo associations.
Brian Dervishi, who has represented commercial lot owners, argues that condo-hotels are clearly recognized under the Florida Condominium Act, regardless of what law the legislature adopts. “These mixed-use structures with the hotel lot owner owning the shared facilities is perfectly permissible,” he said.
If control of common areas is passed on to condo associations, it would amount to a property grab, attorneys for commercial lot owners argue.
The issue remains contentious.
“If we want to look at the best way to address title issues and other issues,” Bradley said, “we can look at it next session.”
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