Gov. Ron DeSantis has signed House Bill 1021, addressing the power balance between residents and investors at condo-hotel complexes. Effective July 1, this new law aims to combat fraud, election meddling, and mismanagement within condo associations. A last-minute addition to the bill gives commercial lot owners, who control amenities like spas, restaurants, pools, and other common areas, greater authority over maintenance and the ability to levy assessments on condo owners.

The legislation solidifies the power that commercial lot owners have, codifying it into the state condo act. This change has sparked controversy, especially among condo owners at places like Carillon Miami Wellness Resort. These residents claim that the current power structure allows commercial lot owners to run the complex like a “dictatorship,” and that such a setup is illegal under the state condo act. Attorney Stevan Pardo, representing Carillon condo unit owners, argues that the new law undermines consumer rights and protects developers who have been acting illegally.

Commercial lot owners, on the other hand, argue that their control is necessary to maintain the high standards of the brands associated with these properties, which include prestigious names like St. Regis, Ritz-Carlton, and Four Seasons. They claim that both residents and commercial lot owners contribute to the maintenance of amenities and common areas.

Past legal battles have shown that commercial lot owners sometimes shift hotel expenses to residents under the guise of shared facility assessments. In some cases, unit owners have limited access to financial records. However, Mark Grant, a consultant defending commercial lot owners, insists that residents have full rights to audit the books and records.

The new law is retroactive but does not apply to rights or interests invalidated before October 1 of this year. This means that if a commercial lot owner’s rights were revoked in a final court order, the law will not reinstate them. The impact of this law on ongoing cases, like the one at Carillon, remains to be seen. Both Z Capital, the commercial lot owner, and the condo association are appealing portions of trial court orders, and Z Capital may invoke the new law in its appeal.

Last year, judges issued mixed rulings in the Carillon case, partly siding with condo unit owners but rejecting their attempt to purchase certain amenities. The appellate court’s interpretation of the new law could significantly influence the outcome of such disputes.