Friday, February 8, 2013

Florida Senate Considers Anti-Homeowner Law

There are roughly 60,000 neighborhoods in Florida that are run by corporations called Homeowners Associations (HOA).  When the economy tanked these neighborhood companies also experienced financial troubles and have resorted to assessing, fining, placing liens, and foreclosing on homeowners to try and make some money but since that hasn't worked, HOAs have tried the next best thing - rewrite the laws and game the system to work in their favor. Sen. Alan Hays, R-Umatilla, filed a bill this week that makes it easier for HOAs to foreclose on a property and requires homeowners to pay disputed dues in whole in order to fight those dues, among other things.

The problem with this bill is that it establishes unnecessary hurdles for the homeowner to remedy this situation  while simultaneously making it easier for a HOA to take away someones property.  The only good thing about this bill is that it actually creates government oversight of HOAs but even that comfort will probably come at a cost considering HOAs and their lawyers have a huge lobby - Community Associations Institute (CAI) - and the state government is run by pro-business folks who think pretty lawns and uniform paint schemes are all that matter.

Just look at the Condominium Ombudsman, Bruce A. Campbell.  Appointed by Governor Rick Scott, Campbell was an attorney who spent five years as Arbitrator with the Department of Business and Pofessional Regulation, Arbitration Section, Division of Florida Condominiums, Timeshares and Mobile Homes.  Upon getting the appointment he told the CAI that once he finished setting up his office he planned on learning about the condo community and then seemed to have more of an emphasis on election monitoring and voter eligibility then on anything else.  Not to mention, Campbell is the first permanent placement into the office that was once on the chopping block as little as two years ago (along with the entire Division of Florida Condominiums, Timeshares and Mobile Homes), and we know how much Rick Scott loves to slash budgets and consolidate offices.

Hays' bill essentially begins with the assumption that the HOA is right and the homeowner is wrong.  It forces a homeowner to pay additional money to have access to the same legal system that the HOA has, but unlike the HOA, a homeowner cannot collect assessments from the neighborhood to proceed.  HOAs know this and use legal stalling tactics all the time to try and drain the finances of a homeowner so that they would submit to the HOA.  And consider what would happen if the HOA imposed dues and attempted to collect in violation of state statutes.  The homeowner would still have to pony up the cash in order to defend their property.  Let's take into consideration a real life example - Sand Lake Hills.

Several years ago, the Orlando neighborhood HOA of Sand Lake Hills Section Two decided to undergo some changes, altering their name to give the appearance that represented all of the Sand Lake Hills subdivisions.  The SLHHOA then got a lawyer, the infamous Larsen & Associates, and decided to spend a few years collecting signatures throughout the neighborhood (despite changing property ownership and misusing public notaries).  When they collected fifty percent of a particular section they filed paperwork with the county and then sent enforcement letters to every homeowner in that subdivision stating that they were now in charge and that every homeowner - even non-members - owed them money or face legal action.  The association also wrote in their rules that they could charge whatever amount they wanted whenever they wanted.  Most homeowners paid but those that did not were threatened with the threat of late fees, fines, and in addition to legal action, the requirement to pay the HOA's legal fees.

One homeowner in particular sued the HOA and fast forward a few years and it seems that not only what the HOA tried to do was illegal, they lacked the authority to do anything since the 1980s.  This case is still ongoing and the HOA has since been in the process of shutting its doors but not after a homeowner had to pay hundreds of thousands of dollars to defend their property.  The case lasted this long because the attorneys for the HOA kept filing pointless motion after pointless motion and continued to collect their illegal assessments from fearful homeowners who could not afford a prolonged legal fight.

Under the proposed bill, any homeowner wishing to fight Sand Lake Hills would have to pay their dues first, and since the HOA could create any amount they wanted, they could theoretically impose thousands of dollars of dues on a homeowner to prevent them from even accessing the legal system.  If the homeowner cleared that hurdle, they would then have to face the sloth-like courts and face delays from the HOA.  Meanwhile the HOA could assess the members (and non-members according to their illegal rules) to fund their fight and homeowners would pay up for fear that they would become the next target.

When the courts ruled against Sand Lake Hills two years ago, their membership dropped off the face of the earth.  They only had support from a small minority of homeowners and people only paid out of fear.

Another example would be Lime Tree Village Club Association, Inc., also in Florida and was also represented by Larsen & Associates at one time.  They never filed the appropriate paperwork with the state in accordance with the Marketable Record Title Act and the covenants and restrictions on every property in the neighborhood ceased to exist.  One homeowner put up a small lattice to shield their trash cans from view and the HOA sent enforcement letters.  They were informed of the law but continued to threaten legal action.  It wasn't until they were contacted by an attorney who enlightened them that they stopped harassment but they continue to insist to the other homeowners in the neighborhood that the covenants and restrictions are still in place and still enforceable.  Under the proposed bill, despite the covenants and restrictions being expired, in order for these homeowners to defend their unencumbered property they would have to pay their dues, which for this neighborhood have increased to nearly $1000 per year, just to prove they didn't have to pay their dues.

The other problem with this bill is expediting the foreclosure process is that foreclosing on properties is damaging to a neighborhood.  The HOA may think they will get their money but in the long run they wind up hurting the entire community.  On average foreclosures drop the value of the affected home by 27 percent and surrounding properties by 1 percent, so while the HOA may be able to recoup some money they open up their neighborhood to additional problems such as prolonged vacancies or deadbeat property investors.

Lets look at the real issue - HOAs are private businesses acting as governments typically run by unqualified volunteers.  One must be fully aware of real estate laws and corporate laws in addition to HOA laws but many can't even do that (Sand Lake Hills has a well documented history of violating not only state statutes but their own Articles of Incorporation, Covenants and Restrictions, and By-Laws).  Instead of these businesses cutting costs and adjusting their business model, they instead try to increase assessments and force payments.  This why there is a big push from the HOA lobby to make it easier to make membership mandatory and make collecting dues, filing liens, and foreclosing on properties much easier.

1 comment:

  1. It's been over a year and Lime Tree Village has still been acting contrary to the law. After being made aware that they had filed a false claim of marketable action they have foreclosed on homeowners, threatened liens, demanded HOA approval for essential home repairs (such as bring roofs up to code), demanded tenants pay them directly, and most recently they acquired a new property management firm (Community Management Professionals, Inc. - an Associa company) that has become even more aggressive with enforcing the expired covenants.

    Most homeowners live in fear that they will become the target of an arbitrary legal action and usually end up submitting but one homeowner in the neighborhood had established an informative website ( and has spent over a year educating their neighbors. Since then more and more residents have been questioning the neighborhood's actions but that still doesn't change the fact that they could be victims of the association.


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