Florida Condo Associations Risk Lawsuits Over Excessive Tenant Fees
Florida tenants who rent units in condo buildings probably expect to pay an application fee. Sometimes, though, they are also hit with a move-in fee, a move-out fee, a "tenant evaluation fee," an "elevator use fee" and/or a garage sticker fee. Such fees might be charged every time the lease renews.
Daniel C. Lopez, an attorney who specializes in community association law, warns that such charges have recently prompted a number of class-action lawsuits, with allegations that the condo associations are charging illegal transfer fees.
Lopez wrote in the Association Management Newsletter that the class-action suits allege violations of Florida’s Deceptive and Unfair Trade Practices Act, or FDUTPA, and Florida’s Consumer Collection Practices Act, or FCCPA.
Associations have fought back, arguing that tenants don't have standing to sue, that the FCCPA doesn't apply because associations aren't debt collectors, or that governing documents allow them to charge fees for the “exclusive use” of common elements.
Nevertheless, insurance companies for the condo associations have been settling these cases lest they lead to significant monetary judgments, Lopez said.
Florida’s Condominium Act limits how much condos can charge in transfer fees, Lopez warned. The limit was raised this year from $100 to $150. It also "provides for the adjustment of the fee every five years to an amount equal to the total annual increases in the Consumer Price Index during that period," Lopez wrote.
A lingering question is what constitutes a transfer fee. Under one state agency, they are defined as mandatory fees charged in connection with the sale or lease of a unit — meaning fees for credit or background checks or move-in fees.
"In order to charge a transfer fee, the governing documents must expressly allow such a fee to be charged," Lopez wrote. "A family is considered one applicant. An Association is allowed to charge a security deposit of no more than one month’s rent that must be held in escrow in addition to a transfer fee. A fee cannot be charged on a renewal of a lease."
Lopez wrote that he hadn't found record of a trial court or appellate court ruling on these issues yet, so he advised associations to play it safe and not charge more than $150 for anything that could be interpreted as a transfer fee.