Some say that's a conflict of interest because management companies also help associations pick their insurance.
Continental Group, the state's largest condo property management company, says its sister company, Worthington Insurance, splits commissions with partner insurance agencies – when condos select them – to save money for the condos it manages.
Insurance premiums make up the largest part of most condominium buildings' expenses and their annual commissions can add up to tens of thousands of dollars.
Board members of some condo associations criticize the commission-sharing arrangement, some defend it, while others say they were not aware of it.
Continental officials say they put the information in writing, as required by state law, and also tell condo board members.
Condo board members rely on their property managers when making a host of decisions. Among them, soliciting and analyzing bids for insurance and other services and making recommendations.
"They carry a lot of clout when it comes to recommendations," said Paul Mack, president of Mack, Mack & Waltz Insurance Group in Deerfield Beach, which splits commissions for a couple of buildings managed by Continental. The other insurance agency that partners with Continental in South Florida is Smith Watson Parker in Hollywood.
Andrew Lester, a former Continental executive who now works for the company's affiliate, said the partnerships help property managers do a better job. For instance, he said a Fort Lauderdale condo managed by Continental received a lower quote on their insurance premium from Smith Watson Parker and led its current insurance agent to match the quote.
"To me, that's a win for our client. I love it," said Lester, a senior vice president for FirstService Financial, which owns the insurance agency that receives the commissions. If Continental "wasn't in the insurance business, it wouldn't be able to influence the market like that."
Like Continental, Castle Group in Plantation, which manages more than 200 condo associations in the state, also is in the insurance business. The company has an in-house insurance agency and it owns a security company.
"It is a conflict," acknowledged James Donnelly, Castle's president. He said his company's property managers address that by staying out of bids dealing with insurance or security: The sealed bids are sent directly to the board.
Travers Hartnett, an insurance agent for homeowner and condominium associations, said property managers gain competitive information for their affiliate insurance agencies.
"It's not intended to be something bad. But the way it operates in the real world, it's a real disincentive for all parties to get a better deal," said Hartnett, owner of Travers Hartnett Insurance Agency in Delray Beach. "The preferred agent is…in some cases, given more information than they should."
The state is considering rules to clarify a state law that prohibits rebates to condo associations or other policyholders to buy insurance, such as an agent paying for an appraisal or lowering commissions.
Lester said Continental offers insurance services to "provide …. as many options and as much education as possible. … Some board members say, 'No thank you. We know you're providing that service, but we feel there is a conflict of interest.' We say, 'Great.'"