DISCLAIMER
This short editorial reflects general observations and opinions of the author.  It has not been vetted in detail *or* professionally reviewed.  Regulations were not analyzed and legal reviews have not been commissioned.  It is suggested to perform deeper research to gain greater insight into the issues addressed and solutions proposed.
 
DEDICATION
This is dedicated to the brave few who wish to practice condo management professionally and ethically while supporting the environment and human rights.  Renaissance minded civics can triumph over Machiavellianism.
 
BACKGROUND
Much of the history of Southeast Florida included the development of virgin land into condominiums (or other association types).  The region often attracted seasonal dwellers, retirees, and vacationers. The settlers often developed an “edgy” attitude - after all, Miami was only a pit stop on the way to Havana!
Some of the northerners who arrived were called “snowbirds”.  Their mentality might be best compared to an atmosphere like a summer camp or country club.  Many had genuine intentions to participate in, and even give back to their perspective communities.  Others considered it an activity to keep themselves busy.  Some went further using board positions to advance themselves socially and economically.
Fast forward to the present, and the condo industry remains significant.  For many, the association became a de facto form of government, that was their only real connection for representation to connect to actual politicians.  The association boards even served a primary social function as well.
However, problems grew over time related to bad governance.  This included:

• Corruption on the boards, and involvement in non-board activities
• Neglect enforcing contractors to abide by building codes
• Kickbacks, favoritism, etc.
• Bad financial management
• Extra-judicial cliques with retribution for non-participation

The situation reached a climax with the collapse of the Champlain Towers South.  While sadly predictable given all of the corruption, the response seemed to be focused on 2 primary areas:

1. Improved Reserve Management
2. Increased Frequency of Inspections

It is proposed that the aforementioned measures are not enough to address the systemic issues.  While they can help to some extent (whereas a market driven solution could result in more optimal risk assumption/avoidance), a four point plan is given below.  It is even suggested that the tragedy could have been avoided if these measures were addressed prior (I am on record with such written correspondence).  Is it now time to treat condominiums like serious facilities with a more professional approach?
 
4 POINT PLAN

1. Volunteer Boards
2. Professional Fiduciaries
3. Insurance
4. Indemnification

 

1. VOLUNTEER BOARDS

 
For those versed in economics, resource allocation tends to be optimal only in a real marketplace that allows natural pricing for goods and services.  Having (potentially incompetent) non-professionals run serious facilities can result in both diseconomies and safety problems.  People often comment on how poorly our government is run (that private sector companies perform better) – should not the same apply to condominiums?  Should nuclear power plants be run by volunteers also (where do we draw the line, and say “enough”)? 
It is very important to note that “forced volunteerism” often results in inequity.  One major reason for this is that wealthy people have more spare time.  With ~60% of the USA population dependent on their next paycheck for basic needs, is this really the way to go?  As will be addressed in a future paper, even charity combined with forced volunteerism can squeeze out the middle and working classes.  Please note that this opinion does not only apply to condominiums, but also to civil service positions as well.  I have never been a fan of non-salaried civil servants (including executives) for the same reason – this includes honorary compensation.
For future reference, I have performed actual case studies of corruption derived specifically from the volunteer provisions (including diseconomies, favoritism, side hustles, identitarian abuses, as well as societal and environmental impacts).
 
The following are proposed:

• Elimination of the mandatory volunteer state statute(s)
• Make the functionality of the board more similar to that of a high school or college student council.
• Next item – professional participation

 

1. PROFESSIONAL FIDUCIARIES
   

It is proposed to assign professional fiduciaries to the Executive Boards, including the following:

• Engineer (or similar)
• Attorney
• Accountant

These professionals should:

• Attend all Executive Board meetings
• Have real voting power at these meetings.
  • This could even include veto power
• They should be compensated for their work (just like property managers and CAM’s).
• Assume full liability for damages associated with their perspective practice areas

Even if fiduciary assignment runs into a conflict with real estate law and statutes, the potential full assignment of liability along with vote participation can serve as a de facto fiduciary.
 

1. INSURANCE

Beyond residential homeowner policies, the boards have a tendency to insure themselves to the hilt.  I have in fact seen many cases where board members dare/demand residents to sue them!  The audacity is obvious as residents themselves are paying for said board insurance, while there is no insurance supporting residents’ rights.  This results in a one way tyranny (with the exception of resident voting rights which only come around periodically) [as if they haven’t been intimidated to death already by other means]. Perhaps there will also be innovations in market based disaster recovery which distribute the burden more fairly with environmental considerations – only time will tell.  A new bill of rights should be considered for both residents and the environment (or perhaps perspective parties and impacts can be included in policies themselves).  ANY COMMENTS ON FURTHER INSURANCE REFORMS ARE WELCOME.
 

1. INDEMNIFICATION

Boards and property management companies often include mutual indemnification clauses in their contract.  It is suggested that these clauses are often abused, and serve as a firewall that actually protects corruption and crime.  When both parties collude, the risks can be distributed, and malfeasance can be proxied through strawmen.  Is there any way to address this without violating legitimate rights?  Perhaps yes, if the following are considered:

• Cancelation of indemnification in the case of collusion
• Greater protections for residents and employees of property management companies

 
ADDITIONAL THOUGHTS
There now appears to be one dominant player in homeowners’ insurance (CITIZENS).  Of course, they are increasing rates and the whole industry segment sometimes appears to be on the verge of collapse (i.e. no companies are willing to take the risk).  So we now have increased insurance rates, increased assessments, increased reserves, and increased maintenance.  If an actual economy were allowed to function (just like other industries), is it possible that the condo segment would be more stable (and perhaps even begin to reach competition based price points)?
It appears that condos have become somewhat of a cottage industry: Fiefdoms run the boards and contractors, while lawyers protect the large property management companies.  I have personally met women who were terrorized by mobs in Surfside (as I have been).  Attitudes might need to change from the ground up for real progress to occur (“it starts with the individual”).  It’s bad enough that the housing stock is being bought out by wealthy interests (thereby subsuming the American Dream).  The entire condo industry as we know it might be cycled out – perhaps there will be some icing on the cake (for improvements in the future). 
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