Thursday, May 08, 2008

Florida appropriates $10 million from Condo Trust Fund

May 8th, 2008

I read the following article in today's newspapers. What I understand is that the state of Florida is actually taking $ 10 million from a trust fund, which was constituted by money that each condo owner pays through his association, as well as contributions and fines paid by developers.

In my opinion, it doesn't matter if the $10 million taken from the fund are going to affect or not the fund's mission or have a "negative impact". It doesn't matter if the fund has too much money in reserve.

What matters is that money that basically belongs to condo owners and should be used for their protection, is diverted to another use that has nothing to do with the fund's purpose. Is that right?

By all means, condo owners will still have to disburse this money every year, even though there is no need for it because the fund has a surplus.

I am not an expert in state budgets and appropriations. But this matter sounds weird to me.

Text of the article:

BY JOE KOLLIN - South Florida Sun-Sentinel - May 8, 2008

Almost one-third of the money designated for programs to help educate condo owners and pay for enforcement of condo laws will be diverted for unrelated state expenses as a result of the current budget crunch.

The $66.2 billion state budget approved last week by the Legislature includes $10 million from the condo trust fund, according to Thomas Philpot, a spokesman for Gov. Charlie Crist.

The state created the trust fund so condo owners, not other taxpayers, would pay for condo services. Money comes from the $4 annual fee each unit owner pays the state via his and her association, or about $5.6 million a year based on 1.4 million units. Money also comes from fees charged developers when they build condos and fines paid by associations that violate condo laws.

The trust fund currently contains about $29 million, about $7 million of which is used for investigators and accountants to review complaints by owners, educational programs for owners and the condo ombudsman. The rest is held in reserve.

"The $10 million trust fund sweep will not have a negative impact" on state services to condos, according to Michael Cochran, director of the Division of Florida Land Sales, Condominiums & Mobile Homes, the agency that regulates condos.

In January, Crist had proposed taking $20 million from the fund to help pay for other state programs. Jan Bergemann, president of Deland-based Cyber Citizens for Justice, a volunteer organization that helps unit owners, called it wrong to have so much condo money in reserve. "There shouldn't be a surplus. The money should have been used for the purpose intended — protection of condo owners," he said.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
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