Tips & Tricks for Living in a Florida HOA (or COA)

Our firm limits its practice to community association law, which is the technical term for the field of law dealing with homeowner associations (HOAs) and condominium associations (COAs).  We also handle work with other types of communities, such as mobile home parks.  We represent both associations and individual homeowners, so we see both sides of the problems.  Everyday we receive multiple calls from homeowners who have problems with their association, often after they have gotten into trouble.  We have blogged about this topic numerous times, but since the laws are revised each year, the advice is subject to change, although not much.  More importantly, we feel the need to say it over and over to help as many people as possible.

Tip No. 1:

Read your association documents and not just the ones you were given. You should have Declarations of Covenants, Conditions and Restrictions (aka Decs or CCRs) or a Declaration of Condominium plus Bylaws, Articles of Incorporation and most likely Rules and Regulations or Architectural Guidelines (or both).  Go to the official records for your county, by searching on the name of your county and Official Records.  Look for a link to search the official records and search for amendments, supplements, modifications, restrictions, bylaws, articles, and notices for any new restrictions or amendments and modifications to the originals, plus any notice of preservation if the original Declarations are approaching thirty years old.  This applies to HOAs only, not COAs.  Read every document carefully and if you are unsure of the meaning and it may have some effect on you or your property, ask a lawyer to interpret it for you.  The best way to stay out of trouble is to know the rules and obey the rules.  The best way to keep your association from becoming corrupt is to know the rules and make it obey the rules.

Tip No. 2:

Read the Florida statutes governing your association (Chapter 720 for HOAs, Chapter 718 for COAs and Chapter 723 for mobile home park lot tenancies where you own the home, but rent the lot).  Familiarize yourself with the relevant statutes, but do not try to cite them and cram them down your Board of Directors throat, at least not without asking a lawyer if your interpretation of them is correct. Knowing the law helps protect you, but misquoting or misinterpreting the law makes you look like a troublemaker and a nut job.  Plus, there is case law (judge's rulings) which interpret the statutes and give them a meaning other than what a layperson would think they mean.  Not all judges interpret them the same way and different jurisdictions (courts in different counties) could have different rulings.  Even the appellate courts (there are five in Florida) do not always agree on the meaning.  The law is not always black and white.  That would be too easy.

Tip No. 3:

Never withhold your assessments (aka dues, maintenance fees).  The law does not permit it.  Here is where the law is black and white.  If you do not agree with the way the association is being operated or managed, either recall the Board of Directors, elect new board members, or seek legal advice.  Withholding your assessments will result in you being foreclosed on and losing your home.

Tip No. 4:

Always pay your assessments.  While this sounds like Tip No. 3, it is not.  Often owners experience some kind of hardship, whether it is financial, family, or physical.  Your association cannot give you a break because you cannot afford to pay and the courts are not allowed to give you a break either.  Inability to pay is not a defense and the association can foreclose on your property a lot faster than any bank.  It can also foreclose even though the bank is foreclosing too.

Tip No. 5:

Always ask permission before making changes to your property.  If you are unsure if you need permission, check your documents.  If you are not positive whether permission is required or not, ask an attorney to review the documents.

Tip No. 6:

Never proceed with an improvement if your application has been denied -- even if you think the association is wrong.  The law requires you to get a court order, called a declaratory judgment, determining who is right and who is wrong.  Proceeding despite a denial will just result in a lawsuit against you.

Tip No. 7:

Always keep you property maintained.  The courts cannot consider financial hardship.  When you purchased a property in an association, you agreed to keep it maintained.  The excuse you were unaware there was an association is not a defense.

Tip No. 8:

Participate in meetings and even campaign to be a board member. Get your neighbors involved. If no one is watching what is going on it is very easy for an association to become a corrupt organization.  If you do not agree with the way the association is being operated and managed, become a board member or recall the Board of Directors.  Legal fights are expensive. Volunteering is not.

Tip No. 9:  Whenever you apply to your Architectural Review Committee (ACC or ARB), save a copy and when you get it back approved, save that copy FOREVER.  More importantly, make sure you get it back.

My Email Regarding HOA Reform Bill and Affordable Legal Representation

I wrote this to Senator Alan Hayes, House Representative Mike La Rosa, Florida Bar President Ramon Abadin and my friend, Jan Bergemann of Cyber Citizens for Justice (www.ccfj.net):

Gentleman,

I am writing to you today, as an attorney who represents both homeowners’ associations and homeowners who are being victimized by their associations. The HOA Reform bill is critical at this point and comes at a time when the president of the Florida Bar, Mr. Ramón Abadin, has pointed out, in the November issue of the Florida Bar Journal, the need for a new business model because the working class cannot afford an attorney and do not qualify for legal aid.  I see this injustice every day in my practice as I have to tell clients the high legal fees and costs they would incur to hire me to protect them from being another HOA victim.  These cases are not the type that are done on a contingency because rarely has someone been physically injured.  I turned down at least one case a day, sometimes as many as five.  Yesterday it was three.   Most firms won’t represent the homeowners because the associations are a “cash cow.” 

The homeowners’ associations are unregulated and the condominium associations have limited regulation with the Dept. of Business and Professional Regulation (“DBPR”) not having jurisdiction over assessments, which is the biggest source of abuse for homeowners.  Even the appellate courts, in a case called Ocean Two Condo. v Kliger, where the Court stated “Because of the statutory lien rights and the power to prosecute the foreclosure action, an association and its attorneys have ample leverage, and the unit owners have very little. Every telephone call, meeting, or hearing regarding the genesis of the dispute and the amount due produces an incremental unit of attorney billings, and every day until resolution of the dispute increases the interest tariff.” 

In my practice I have witnesses law firms that have paralegals do all the work, yet the homeowners are billed attorneys’ fees, not paralegal fees.  I have witnessed a law firm give sales pitches to associations during hiring interviews and state that “95% of the homeowners can’t afford to sue you and the 5% that can will soon learn that money can be used for a vacation, their children’s college, or retirement and will give up.”  Unfortunately, this is true.  I have seen a law firm give homeowners a letter stating they could not call or come to their office to resolve their assessment delinquency, but could fax their credit card or email and then are given the email address of a former staff member.  Once I got involved the charges ballooned from $795 to over $3,600 with the attorney telling me he had to read all those emails the owner sent trying to get a response.  This is outrageous and had I not gotten involved he would have forced the homeowner to pay those ridiculous legal fees.

The industry not only needs more regulation, but more affordable legal representation. Let’s give DBPR jurisdiction to arbitrate assessment disputes.  This is the biggest source of abuse.  Arbitration is less expensive for the homeowner and the threat of arbitration might help tamper the abuse.

Regulation of the homeowners’ associations is needed to help curtail the abuse of out of control board members.

Right now there is a rise in homeowners’ associations setting up their own corporations to perform work normally performed by vendors.   This results in the board of directors putting their family members on the board of these corporations as paid directors, if not themselves in some cases; the board members receiving free services, the members being denied access to see accounting records of these corporations even though their assessments paid to set up this corporation and bought any equipment, furniture or other assets.  Several times I have witnesses where these corporations are either owned or operated by a board member or have contracts with a board member.  Some associations set up these companies to operate a receivership or rental program to take control of homes in foreclosure, which is needed, but instead funnel the rental income to themselves or the corporation without the association getting a dime.

There is also a rise in the community association management firms setting up their own corporations to perform work normally performed by vendors.  These corporations are then paid top dollar and paid promptly with no one given a chance to dispute an invoice.

There is a rise in the number of cases in which deed restrictions have expired under the Marketable Record Title Act but the HOAs continue to operate as mandatory associations and threaten to foreclose on owners who refuse to pay because they know the chances of the owner affording an attorney are slim.

I have witnessed board members targeting homeowners they do not like.  This targeting sometimes includes criminal activity, which is hard to prove.  Any witnesses refuse to get involved because they know they will be targeted.

The Village Condominium Association in Orlando was taken over by a board member who slowly was able to get rid of anyone who did not agree with him and then proceeded to give himself the management contract, the security contract (with armed security despite not having the proper licenses), and the maintenance contract.  This board member marked all the board members’ assessments as paid each month despite no payment.  He was able to take approximately $40,000 a month from the association (which we documented), depleted the reserves and diverted money from insurance claims to his own pocket. A receiver was eventually appointed to take over and the board removed.

I could write a book on the atrocities committed against homeowners, including cars being set fire, fake bombs on lawns, handicapped owners in wheelchairs being refused to attend meetings and harassed, racial discrimination, sex discrimination, discrimination against veterans.  I have witnessed homeowners being evicted from their homes for past due assessments when their home was in a trust and the association demands the rent be paid to them from the “tenant.”  And let’s not forget the Higgins v. Timber Springs case in which Mr. Higgins was foreclosed upon while on active duty in the military.  Our firm was able to get the foreclosure reversed.  We took the case pro bono, one of the few we could afford to handle as a small firm, because Mr. Higgins could not afford an attorney and was trying to deal with this situation while deployed. 

The sad part is when I have to give these homeowners a quote of the fees to litigate they decide it’s easier to sell their home and move, sometimes to another state.

I apologize this email is so long, because I know your time is valuable, but I appreciate the efforts each of you are making in trying to protect the rights of our citizens.  So many of them lose their homes, not because they can’t afford them, but because they upset their HOA, became a victim, and cannot afford an attorney.  Thank you!

Regards,

Barbara Billiot Stage, Esq.

HOA Rant

There is a great article posted on CyberCitizens for Justice yesterday.  It's a rant from Lindsey Nesmith in an article she wrote which printed in the Florida Weekly.  My hat is off to Ms. Nesmith for saying the obvious, but what many of us are afraid to say.

You can read the article at:  http://www.ccfj.net/HOARANT.html