By Jan Bergemann, Member of the HOA Task Force
After taking care of the necessary formalities, the Orlando meeting started with some explanations of Senator Mike Fasano, who participated by phone. He encouraged the Task Force members to revisit the issues of SB 1632, the bill vetoed by the Governor. He explained that he feels strongly about finding a solution for this problem. He stated that these communities need money to maintain the common areas, clubhouse, etc. But Senator Fasano's reasoning differed from the presentations of two homeowners, members of the United Communities of Hernando, who emphasized that association money is needed to enforce the deed restrictions and prosecute violators in courts.
So far, Nina Vaznelis, an attorney and Task Force member, has failed to find any kind of support among her fellow Task Force members. In my opinion, no miracle! Who in his right mind would be willing to voluntarily pay into funds that could be used to sue himself? It seems that this is a new approach, since attempts have failed miserably in court to make mandatory associations out of voluntary associations. We will hear more about this issue, since Senator Fasano promised to address the Task Force in person at the Tampa meeting December 8. But after seeing what happens in Nature Watch HOA in Pinellas County, who wants to be part of mandatory association in the first place? People who choose to be part of a voluntary association shouldn't be forced, neither by a court nor by any law, to become a member of a mandatory association. As long as there is no oversight or regulation of HOAs, who wants to be a member if he doesn't have to?
Altogether, we listened to 15 presentations
from public speakers, mostly homeowners talking about problems in their
communities, complaining about lack of disclosure.
We heard from George Andres, the Jupiter flag man, who underlined that lack of disclosure can lead to serious legal problems, as can be seen in his case - see: The Battle over Old Glory!
We heard from Steve Comley, whose story could be read in newspapers nationwide. His problem started when his association board changed the rules in midstream.
CHIP Vice President Chan Gerber talked in his presentation about the total lack of disclosure and the harmful things that are going on in communities in his neighborhood. He strongly outlined the problems retirees are facing in these communities. Word goes around up North, and the flow of newcomers may slow down, if nothing is done to solve these problems. Retirees are very important for Florida's economy!
We heard from homeowners like Gary Hinkle, Mike Sims and many other homeowners, who blamed lack of disclosure and lack of governmental oversight for the problems in their communities.
Also, we heard from attorney Paul Wean, Vice Chair of CAI-FLA (Community Association Institute - Florida Legislative Alliance) and legislative representative of OCHA (Orange County Homeowners Association). Wean was the sole voice trying to convince the Task Force members that all is pretty well in HOA La-La-Land and that the problems are mostly caused by unhappy homeowners unwilling to obey by the regulations. All in all, Wean repeated the old industry platitude about “the few disgruntled homeowners.” In his opinion, regulation of homeowners' associations or governmental enforcement of the existing laws would not be necessary. No wonder he voiced this opinion, because regulation and enforcement would most likely decrease HIS income from many legal fees created by lawsuits on these matters.
One of these lawsuits was discussed at the last meeting in Miami with my presentation regarding huge legal fees created when a lawsuit was started by a special meeting to oust a seated board. Since my presentation created some disbelief among task force members, I distributed the copy of the malpractice lawsuit brought by the association against Wean & Malchow, PA. (Paul Wean is the senior partner of this law firm.) My attempt to distribute the copies of this lawsuit was strongly objected to by Task Force member Joe Adams, who is the chairman of CAI-FLA.
The copy of this lawsuit was not distributed to discredit members of the CAI, even if many homeowners are blaming them for the many problems in these associations. Instead, this lawsuit opposes the often quoted statement by members of this trade organization that it is real easy to recall a board if the majority of homeowners agree. This kind of legal action shows that this is definitely not the case! Task Force Co-Chairs and the DBPR Legal Counsel overruled Joe Adams’ objection.
This lawsuit was further proof that government oversight is necessary to protect the homeowners. These legal problems can totally bankrupt an association, with the private homes being used as collateral for legal debts incurred during these outrageous lawsuits.
The main issue of the day -- DISCLOSURE
created some lengthy discussion. Please read our views about the necessity
of disclosure in our CCFJ, Inc. Presentation.
Besides the up-to-date deed-restrictions, a prospective buyer should receive as well the financial report + last year's accounting, information about pending litigation and a statement that by signing the contract the buyer will give up part of the protection of the Florida Homestead Act, because unpaid dues could lead to the foreclosure of the home. CCFJ, Inc. will be pushing for aJoint Resolution in order to avoid people losing their homes for small amounts of unpaid dues.
The members of the Task Force will be presented with the draft of a new disclosure bill, which is being written at this time. Members expressed their hope that these issues would be included. But the “NO” vote of Jim Morgan, the representative for the Florida Association of Realtors, was in my opinion a little surprising. Shouldn't realtors be interested to market a product without many flaws and problems? Even if a little more work would be necessary for the selling realtor to gather the required information, it could save them a lot of headaches later.
Issues 2 - 4 - changing certain paragraphs of the Florida Statutes 720 to adopt regulations from the Condo Act - found favorable votes among the members. However - Issue 5 - Joe Adams was pushing in his motion for 20% of necessary homeowners for a petition - was defeated by a wide majority of members. He was unwilling to consider my proposal of making it at least 10% of the total voting interests of the association, using the 10% clause as in FS 720.306(3) Special Meeting. He even started arguing that there is no such clause. But Adams stayed corrected in the end.
But all these reforms wouldn't help homeowners, if no enforcement is provided and willful violators are not punished.
The next meeting in Tampa will definitely be very interesting, considering the many big problems in associations in the Tampa area. Number One Issue on the agenda is Purchaser Protection, something homeowners in Florida claim is non-existent. So keep your calendar open for December 8, 2003, when the Task Force comes to Tampa!
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