STATEMENT TO THE HOMEOWNERS’ ASSOCIATION TASK FORCE
ORLANDO NOVEMBER 14, 2003

Ladies and Gentlemen:

Concerned Homeowners In Partnership or CHIP is a not-for-profit corporation that was founded to protect homeowner rights in deed-restricted communities. 

The State of Florida is responsible for the current mess involving deed-restricted communities. Florida with its history of fraudulent land sales, dishonest developers and builders, allegedly corrupt officials and worthless laws has done little or nothing to remedy this situation. In the past the legislature under pressure from the special interests seems reluctant to proactively develop legislation to protect the rights of homeowners. Fortunately this appears to be changing as legislators listen to real people and not industry organizations about problems with HOA and developers. The opposition to change is very real. While the agenda items today do touch on some issues involving homeowner associations, the roots of the problem lie in the virtually unregulated area of how developers can operate.  A property reform task force as proposed by the Cyber Citizens For Justice and their allied organizations can best resolve these problems. We urge this task force to recommend this approach to resolve the current inequities borne by homeowners.

Item 1 Disclosure:  Full disclosure of all aspects of a development in a manner defined by state statutes with severe penalties for noncompliance will mitigate issues and disputes involving developer control of the HOA.  The right of a developer to have absolute dictatorial control over an association is foreign and un-American in concept and practice.  Control should be based on a vote for each lot owned.  As the members gain majority control they should not be allowed to interfere with the completion of the development as given in the full disclosure.  Changes caused by conditions beyond the developers control such as changes in laws and regulations, geologic and environmental conditions are exceptions. Changes must be approved by a competent government agency with notification and a public hearing.  Other changes must be approved by 70% of the members other than the developer in a secret ballot.  

At 51% build out or seven years which ever comes first, the members should have the voting majority. The developer should retain the right to appoint and remove one director as provided in existing law.  The developer must be required to inform the community via a monthly conspicuous posting within the development the number of homes that have been closed. The posting for each month must be posted within 10 working days after the 1st of the following month. The posting must have the following information: the report date, the total number of homes at build out, the current number of homes that have been closed (completed) to date. The current report would replace the previous report.  The developer must provide a monthly list of new property owners to the association BOD. This list at a minimum should contain name(s) of owner(s) parcel number and address. If an owner resides outside the community this address shall be provided as well.  

The governing documents of a community (Articles of Incorporation, HOA bylaws and the Protective Deed Restrictions and Covenants) cannot have unilateral changes made without the approval of 70% property owners other than the developer after the first home is sold. Copies of the changes must be provided to the property owners without cost. The buyer of each home must be provided with signed copies of the existing governing documents. These are to be provided to the prospective purchaser as part of the full disclosure. The developer may require a receipt for these documents and prior to signing a purchase contract a signed statement that the purchaser has read and understands or has had legal advice regarding the governing documents and their legal implications. 

Items 2-5: Good communications within a community will determine the success or failure of the HOA.  Apathy is a very real and devastating behavior in our communities. This behavior is nurtured by poor communications.  When HOA boards do not involve the members in the decision making process and rule instead of serving their communities they alienate themselves from the community.  This in turn feeds the vicious circle and destroys the HOA.  We have found that the apathy rate can approach 90% in a community. That is until an event takes place that stirs up the community.  

Many newcomers to Florida often state that they didn’t retire here to fight or get involved. This is another source of apathy. Therefore the homeowner laws must be written in a manner to protect the interests of those who are unable or refuse to get involved in their communities.  The rules for meetings of both the boards and the members need close attention. Penalties need to be imposed on developers and directors for willful violations of HOA laws. We have seen elections cancelled, failure to hold meetings, failure to allow discussion of concerns even when the BOD was provided with advance notice of items to be discussed. We have seen a developer interfere with the right of members to meet, unlawfully record meetings, take away the microphones and lock up the chairs. The overall situation is bad.  These are some of the things that turn people off to the Florida retirement experience. Those coming from most other states do not accept the concept of living in a third world dictatorship where the rules are whatever the developer wants them to be with no consideration for the rights of the homeowners. The word is out and that is the reason people are not coming to Florida. Meaningful and serious reform is necessary.

Thank you,

Channing Gerber, V.P.