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.
