Wednesday, April 16, 2014

Abuse of Power -- Living Miserably in a Florida Association

If I had to briefly describe Florida community associations (COAs, HOAs, Mobile Home Parks) I would sum it up to "abuse of power."  

A majority of the associations in the State of Florida abuse the power granted to them by the statutes and the governing documents (Declarations, Bylaws, Articles of Incorporation, and Rules and Regulations) of the association.  In the early to mid0-2000s, House Representative Julio Robaina, who was head of the House Select Committee on Condominium and HOA Reform set up town hall meetings all over the state to listen to the complaints by owners regarding their associations.  Hundreds of people attended these town hall meetings and only one or two people ever spoke up to say they were happy with their association.  As you can guess these one or two people were board members.

Don't get me wrong; there are a number of good associations out there who do their job without abusing the owners.  I know because the associations I represent operate their communities that way or I would not be representing them.

The problem lies with the association attorneys, as well as the courts and the Florida Bar for letting the association attorneys behave badly.  The problem lies with the Florida Legislature for not enacting more laws to protect the owners or creating an agency to properly regulate the associations.  Homeowner associations are not regulated at all.  The other types of associations that are regulated do not provide adequate protection for the owners or do not have jurisdiction to investigate the biggest problems, such as assessment disputes.  This means the only remedy available to homeowners is costly litigation and the attorneys know this.  They advise their clients the likelihood of someone litigating against the association is slim and even if they do chances are they will drop the case when they realize the money it will take, which is between $100,000 and $150,000 on average to get a case to court.  In fact one association law firm gave a  sales presentation that I sat in on and stated that 95% of the homeowners cannot afford to litigate against you. Their motto was "do now, defend later."  The board members, once educated on this fact, then start to abuse the power they have to suppress the property rights of the owners. 

Tactics include censorship of those outspoken owners and litigation against them if possible.  Associations will foreclose on an owner who is past due a few hundred dollars and is outspoken rather than foreclose on someone who owes more but doesn't make trouble.

Attorneys' fees are the biggest problem with association abuse.  The statutes actually provide for the owner to reimburse the association the attorneys' fees without a court action!  Even worse, any payments are applied to interest, late fees and attorneys' fees first.  Payments are applied to assessments last, so if you are past due, unless you pay the amount in full, you will always be at risk of foreclosure.  Knowing this, the law firms representing the associations pad their bills heavily.  A recent case I was involved in, where the association lost the client's monthly payment of $160 resulted in almost $800 the first month and $62.50 each month, minimum, just for handling an account in collections and processing the payment.  This client paid in advance several months at a time and there was only one month in dispute, but the association sold off the debt to a finance company who then applied hundreds of dollars in legal fees almost every month on top of the legal fees the association attorney charged.  The attorneys' fees reached $20,000 quickly despite one $160 payment being in dispute.

I have had clients who are turned over to the association attorney for collections and they are told they cannot go by the law firm and cannot call.  They are given the email address of a contact person to discuss settlement.  Guess what?  That person no longer works there and the owner is given two or three email addresses of former employees.  While I complained about this to the law firm several years ago, I recently discovered the firm is still engaging in this practice.  When they finally do read the emails the owner sent, they want to bill the owner for all the emails sent despite no one reading them when they were sent.

Violations are another area of abuse.  If your association doesn't like you, you will be targeted with violation notices and possibly fines, which then can be a lien and foreclosure on your home if the fines exceed $1,000 and are unpaid.

Life in an association does not have to be this way.  There is a better way of operating these associations, but until the State of Florida wises up and realizes they are promoting a "cash cow," not just for the attorneys, but for the community association managers, as well, life in an association will be a living hell with a dictatorship form of government.  By the way, the courts have ruled long ago associations are not governments or quasi-governments.


  1. Hello.
    Great job with the blog. We have major issues at our condo over here. But we are working on fixing that but the system is really skewed and it all comes down to money and resources but also about having the will and focus on justice.

    What do you mean with your last sentence? "By the way, the courts have ruled long ago associations are not governments or quasi-governments."

    Thanks for your efforts.

  2. The same is true in California, I'm afraid. There are some good boards and some good attorneys, but the majority of boards have members who vote in what is good for their own property, but not for the community as a whole. There is no specific legislation forbidding this practice, but of course "common law" would require such board members to recuse themselves. Unfortunately they don't.

  3. California's threshold for recording a lien is $1,800.00. Our 'Nazi' board members consistently engage in targeting specific owners and gouging them with fines. Some are elderly and housebound. This, while at least one current board member who was appointed to the board this year, has been consistently, seriously delinquent since purchasing a unit five years ago. Delinquent to the tune of about $7k at any given month This individual is also $23k behind on county property taxes (public records). Nothing in our governing documents, or California law prohibits this. Yet this board member is making and voting on financial decisions that affect all members of the Association! The Board just foreclosed on a targeted owner's unit who owed much less in back assessments. The owner made payment arrangements with the lien company and kept current on the agreement, checks cashed. I might add that the unit mentioned is free and clear, taxes current. The owner had the unit up for sale with a realtor. Out of the blue, said owner received a call from the realtor saying that the unit had been sold at a Trustee's sale as of 11a.m. that morning. The owner received ONE notification prior to the sale and that was the Pre-Lien letter via certified mail. That prompted the payment arrangements. None of the pre-foreclosure requirements to the owner were adhered to. The board and management acted in closed sessions, which is a violation of the California statute. That evening the frustrated owner went to the board president's unit to inquire how this happened (owners are not allowed owners list information). The president refused to answer the door, although the owner could clearly hear him trying to quiet his dogs. The owner left a note on his door requesting that he call to discuss the circumstances. The next day the owner received an email from him saying he had been in the clubhouse when she stopped by and there was nothing he could now. Pure coward behind the door and a liar as well. The owner is now scrambling to get the funds to redeem the unit within the 90 day period. These are just a few examples of board and property management abuse, corruption and self-enrichment in one 80 unit complex in California. The states need strong governmental oversight so these exploitations are curtailed. Frankly, I believe that owners governing other owners was/is a destructive idea. The results are cliques, selective enforcement of the rules and regulations and sadistic Nazi boards. I'm in favor of dissolution of all HOA boards in California. Sadly, ECHO, CACM and the worst offender CAI have a stronghold on our state legislature by their generous donations. In the event someone responds with, why don't you run for the board, been there done that. Seeing it from both perspectives, never again!

  4. There are 1.6 million condominium owners in Florida and that number is growing. But who is there to protect the interests of them? - Practically nobody.

    Reductions in the budgets of the state and local regulatory agencies have required massive personnel cutbacks so that now they investigate only a handful of abuses.

    On paper, condominium owners have two venues to vent their complaints: the Office of the Ombudsman and Arbitration – both under the Department of Business and Professional Regulation (DBPR).

    The Office of the Ombudsman is of limited value and Arbitration requires the submission of a Petition that to be accepted, needs the help of an experienced attorney. On the other hand Boards of Directors have the unlimited funds of the condo owners to hire the best attorneys, so when condo owners run into Boards of Directors that are incompetent or worse, the condominium owners are helpless.

    The Solution

    More than 1.6 million condo owners will remain helpless until they stop being indifferent or afraid to air with others their complaints. They must also work towards the creation of a State-wide coalition to share their problems and look for solutions.

    Abuses will come to an end when condo owners have a place to bring them to light. Perhaps a good first step is to visit the website, tell your story and offer suggestions to improve the website.

    When condominium owners unite, they will become a force to be reckoned with.

  5. Seems like this is often a recurring theme with associations across the country. I would recommend finding a local insurance agency that will work with both the owners and your entire HOA to ensure that everyone's needs are met. Everyone deserves a voice when it comes to your property.

    - Jackie from Newton Home Insurance

  6. I'm just SHOCKED that the Florida Laws protect an HOA that can mandate massive assessments without member approval, extend their own term in office through manipulating, or adjusting, fiscal year changes, use false assumptions as a basis to send cease and desist letters, (some may call that harassment, but not me), continue to find more ways to spend money, yet not acknowledge or make any hardship exceptions to the rules for the financial harm caused to others as a result of their decisions. I would love some direction.

  7. In fact, when I look at the financial devastation the HOA can cause me, it makes the IRS look like a pussycat.

  8. Blatant abuse of power how do you fight it when your out numbered and the favored tenants blatantly lie.

  9. I heard that the department of business and professional regulations division of Florida land sales,condominiums and mobile homes.
    Orlando Florida 32801
    Phone number 850-488-1122
    They are as I understand the agency that handles complaints in reference to hoa problems.