FOUR CORNERS | The homeowners association for the Legacy Park subdivision in Davenport has filed for Chapter 11 bankruptcy protection, mainly for an unpaid bill of more than $100,000 to the development's cable company.

The petition was filed on June 16 with the U.S. Bankruptcy Court for the Middle District of Florida by the Legacy Park Master Homeowners' Association Inc. Under the listing of creditors holding unsecured claims, Legacy Park cited just two: an outstanding debt of $105,305.45 owed to Comcast Cable of Orlando and $50,000 for legal services provided by the Orlando law firm of Larson & Associates.

Legacy Park is a 270-unit townhome development in the Four Corners area, with homes zoned as short-term rentals. As with other short-term rental properties in Northeast Polk County, Legacy Park boasts of a 10-minute drive to Walt Disney World and the other attractions, and community amenities including a swimming pool, a cabana and jogging/walking trails. Many of the homes were built as four bedroom, single-story villas in a gated community. Incorporated in April 2004, the subdivision is owned by Sutherland Management Inc. of Apopka.

During the boom days of the real estate market in 2005 and 2006, some subdivisions tried to remain competitive by offering free cable to all units. That created problems when the real estate bubble burst. As the number of abandoned or foreclosed homes in each subdivision continued to rise, it represented a loss of homeowner's dues for the governing association. At the same time, the homeowners associations often had long-term contracts with cable providers that they couldn't get out of.

In addition to owing more than $100,000 to Comcast, the Legacy Park Master Homeowners' Association also cited $253,824.14 in unpaid HOA assessments. The Chapter 11 filing also lists a contract with Comcast Cable for "bulk cable service."

That is becoming a growing problem for developments in Four Corners that have long-term, bulk cable contracts. The Four Corners Business Council, a group of business owners who work in fields related to real estate and who meet once per month at Polo Park, have cited cable service as a growing financial headache for homeowners associations.

Pete Howlett, a Four Corners Realtor and chairman of the council, noted that in some cases, the cable companies have shut off service to an entire subdivison or condo development, even if the remaining unit owners have maintained their monthly HOA dues, while other cable providers have agreed to set up accounts with the individual homeowners still living there.

"I think they realized they would not get paid by the HOA, so they might as well allow the individual homeowners to get the service," Howlett said.

Homeowners associations were intended to be self-governing boards that oversee new developments and subdivisons build in unincorporated areas like Four Corners, Celebration and Poinciana. HOAs set the rules that the homeowners within the development live by, and collect the dues that finance everything from landscaping and upkeep on the common grounds to construction of new clubhouses.

But a growing number of the subdivisions that started construction at the height of the housing market, when demand for new properties was at its peak, suffered badly when the market crashed. Some people canceled their contracts to purchase homes within the development, even if it meant losing large down payments. Other units fell into foreclosure. That's left the HOA with a shrinking pot of monthly dues for paying bills and maintaining basic services.

Filing a Chapter 11 bankruptcy petition allows the Legacy Park HOA to seek court protection from its creditors.

Legacy Park isn't alone. The Tierra Del Sol Homeowners Association filed for Chapter 11 bankruptcy protection earlier this year. A subsidiary of American Leisure Holdings, the northeast Polk County resort's bankruptcy filing showed it owes more than $100 million to creditors. The resort has also faced lawsuits from British investors who paid for units that didn't get built.

Howlett said HOA developments are getting harder to sell these days, as a result of all the foreclosures and short sales in many of them.

"Most buyers, we take them to the places without homeowners associations," Howlett said. "We have major problems with people who have not paid their HOA dues, and that has to get settled at closing."