A $45 Charge Turned Into a $45 Million Lawsuit
On September 11, The Real Deal ran a piece on a fight that has been going on for sixteen years at the Palm Beach Marriott Singer Island Beach Resort & Spa in Riviera Beach. Two hundred thirty-nine units. The condo association on one side, the commercial operator, Urgo Hotels, on the other.
The thing they're fighting about is an administrative charge of roughly $45 per occupied day, billed to unit owners on top of their quarterly assessments. The association says the charge covers costs the assessments already cover, and that the operator has never produced documentation showing what it actually pays for. The operator disputes that. The first suit was filed in 2010 and settled in 2013. A second was filed in 2015. Trial is set for early 2027.
Damages claimed from 2013 forward: more than $45 million.
None of this has been decided, and both sides get their day in court. But the shape of the dispute is worth studying, because it isn't really a legal problem. It's an accounting problem that nobody solved when it was small.
Small charges get big quietly
Forty-five dollars sounds like nothing. Multiply it across 239 units, across occupied days, across thirteen years, and you get a number that justifies two decades of legal fees.
This is the part owners and operators consistently underestimate. A recurring allocation is not a line item. It's an annuity. Whatever methodology you set on day one keeps running, compounding, until somebody challenges it — and by then you're not arguing about this year's number, you're arguing about every year since inception, with interest.
The time to get the allocation right is before the first invoice goes out. Not after the thirteenth year.
The real failure is documentation
Strip away the personalities and the dispute comes down to one question: can the party doing the billing show its work?
Writing in Hotel Business Review, Loren Balsam of hotelAVE described exactly this challenge in condo-hotels — that "complicated budgeting is necessary to properly allocate expenses between the hotel and condominiums and address reserve requirements applicable to hotel FF&E, on the one hand, and condominium reserves for building systems on the other."
Complicated is the key word. Two owners, one building, one set of elevators and hallways and chillers and front desk staff, and two completely different sets of obligations. Somebody has to decide what portion of the power bill belongs to hotel guests versus residents, and then prove it.
Most of the time, nobody writes that decision down. A number gets set in year one by whoever was in the room. It goes into the billing system. Staff turns over. Five years later nobody in the building can explain where the number came from, and the only honest answer to "what does this charge cover?" is "it's what we've always charged."
That answer is not defensible in a deposition. It's also not defensible to a lender, a buyer's diligence team, or an owner who finally hires their own accountant.
In Florida, the rules moved underneath everyone
There's a second wrinkle here that owners in this state need to understand. The Real Deal reported in May 2025 that the Legislature amended Florida's condo-hotel rules for the second time in two years — HB 913 and SB 1742 carved out existing condo-hotels from a prior law that had given commercial lot owners authority over shared spaces like lobbies, pools, elevators and A/C systems. The new framework applies only to declarations effective on or after October 1, 2024.
So the governing rules now depend on when your declaration was recorded. Two nearly identical buildings across the street from each other can be operating under different regimes. If your allocation practice was designed around the old understanding and nobody revisited it, your documentation is aging badly.
This is not just a condo-hotel problem
If you don't own a resort, don't tune out. The same structure shows up everywhere in South Florida real estate:
Mixed-use buildings splitting costs between retail, office and residential
Master and sub-associations allocating shared amenities
Management fees between related entities — a developer's management company billing a partnership it also controls
Shared services allocations across an affordable housing portfolio, where the investor and the agency both eventually ask how the number was derived
CAM charges in commercial leases, where the tenant has audit rights and sometimes uses them
In every one of these, the exposure isn't the charge. It's the absence of a paper trail connecting the charge to actual, documented cost.
What a defensible allocation file looks like
It's not complicated, and it's not expensive. It's five things:
A written methodology. What costs go into the pool, what drives the split (square footage, occupied days, unit count, headcount), and why that driver is reasonable. One page. Signed and dated.
A tie-out to the general ledger. Every dollar in the pool should trace to actual GL accounts. If the pool is a plug number, you have no defense.
An annual true-up. Estimate during the year, reconcile after. Refund or bill the difference. This single habit prevents most disputes, because nobody can accuse you of profiting on an estimate you settled up on.
No duplication. Walk the charge against the assessment or base rent line by line and confirm nothing is billed twice. That is the exact allegation in the Singer Island case.
A review when the contract, the law or the cost base changes. Florida just moved the rules twice. That's a trigger.
If you can hand all five to a skeptical CPA and have them agree the number is reasonable, you're fine. If you can't produce them, you have an unquantified liability sitting on your books that nobody has measured.
Where we come in
SoFla Prime Consulting is a fractional CFO and accounting firm in Boca Raton. We build and defend cost allocation methodologies for condo and HOA boards, mixed-use owners, property managers, developers, and affordable housing sponsors — along with the monthly close, budgeting, lender and investor reporting, and AP/AR work that sits underneath them.
If you bill a recurring charge to anyone and you can't produce the backup in an afternoon, that's worth a conversation before someone else asks for it.
SoFla Prime Consulting | 99 SE Mizner Blvd, STE 827, Boca Raton, FL | admin@soflaprimeconsulting.com
SoFla Prime Consulting provides accounting and CFO advisory services. We do not prepare or file tax returns; tax work is referred to our tax partners. This article discusses pending litigation; the allegations described have not been proven in court, and nothing here is legal advice.
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