A tenant is suing a Miami condo association over its excessive application and move-in fees, saying they violate state law.
The lawsuit is the first of several class-actions that attorneys say they plan to file against condo associations over high fees. In June, the Miami Herald reported that condo boards routinely charge consumers hundreds of dollars more than state law allows. Florida statute caps the amount condos can charge to apply and move in at $100 per person.
In a suit filed Friday in Miami-Dade County Circuit Court, August Lasseter says he was billed $625 in non-refundable fees when he signed a lease for a unit at one of the two high-rise towers at Quantum on the Bay last year. The charges broke down to $100 for a background check, $175 for “administrative review,” $125 for registration and $225 for move-in.
“I questioned it at the time, but it’s not like you really have a choice,” said Lasseter, 37, who runs a modeling agency. “They say you pay it or you don’t move in.”
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Attorneys for the board, which was highlighted in the Herald’s initial story as the condo with the highest fees, said they had not yet been served and couldn’t comment.
The Florida Condominium Act prohibits condo associations from charging fees of more than $100 per applicant “in connection with the sale, mortgage, lease, sublease, or other transfer of a unit.” (Married couples are considered one person and children are exempt.)
Such fees are known as “transfer” fees because they concern the transfer of a unit from one owner or tenant to another.
“It’s shocking that associations are intentionally and knowingly charging these fees when they are improper even after the public attention from media coverage,” said Aaron Resnick, an attorney who is handling the suit. “It’s black-and-white. The law can’t be any clearer on what you’re allowed to do and what you’re not allowed to do. ... Knowledgeable condo associations and property management companies have been flouting the law for years. It’s a shame that it will take lawsuits to end this practice.”
Resnick is working with South Florida attorneys Joshua Spector and Jonathan Feldman to file more suits across the state.
“We’ve identified condo associations from Tallahassee to Jacksonville and Orlando to Tampa, but Miami is the most prevalent,” he said. “And we’ve found it’s not just the expensive condos that are doing this, it’s across the board. The wrong is the same, but the impact is even greater [on poorer residents].”
Lasseter’s lawsuit says Quantum’s fees also constitute a violation of Florida’s Deceptive and Unfair Trade Practices Act. It seeks to have Quantum pay damages and restitution to Lasseter and those who join his claim, and asks a judge to stop the association from charging more than $100.
Rents at the complex at 1900 N. Bayshore Dr. in Edgewater range from $1,500 for a studio to $4,250 for a three-bedroom penthouse.
A Herald analysis of Realtor data this summer found that nearly half of condos listed for sale or rent in Miami-Dade County asked more than $100 in fees. In Broward, 22 percent of condos charged illegally high fees. A search in November showed roughly the same numbers.
Property management companies argue the law does allow for charges of more than $100, if the charges come from a third party, not the association. And they say background checks have grown more expensive since the cap was set in 1990.
But legal experts consulted by the Herald say the statute is clear and associations are gouging applicants. The Division of Florida Condominiums, Timeshares and Mobile Homes confirmed that the $100 transfer cap is meant to include all non-refundable fees for background checks, registration, move-in, pets, elevator usage and other charges requested by condo boards and their representatives.
(The rules don’t apply to homeowners’ associations and rental apartments.)
Background check companies told the Herald they usually charge between $20 and $45 for individual tenant screening, and offer discounts for bulk commercial accounts from condos.
But international clients can be significantly more expensive, said Robert Sanchez, vice president of Miami-based United Screening Services. Checks on people from Russia and Latin America, where many Miami condo buyers come from, can range as high as $175, Sanchez said.
Even so, “the law is the law,” said Stavros Mitchelides, the Miami Beach Realtor who first alerted the Herald to the problem of overcharging. “If state law says the fee can’t exceed $100 for a single person or a married couple, then you shouldn’t be able to go around the law just to make money off of applications from everyone else. I find it extremely disturbing.”
The extra charges make it even more difficult for locals to find a home in South Florida, already one of the nation’s most expensive housing markets.
Mitchelides says he repeatedly told the Miami Association of Realtors about the problem but never heard back. (A spokeswoman for the association said they did not have a record of being contacted by Mitchelides.)
After the Herald’s initial story came out, José Pazos, who runs a prominent South Florida property management firm, disputed the newspaper’s findings in a Facebook video and said he would lobby the Florida Legislature on the issue.
Update: This story has been updated with a comment from the Miami Association of Realtors.