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Article Courtesy of The Ledger By MICHAEL W. FREEMAN June 19, 2009 DAVENPORT | 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 June 16 by the Legacy Park Master Homeowners' Association Inc. in the U.S. Bankruptcy Court for the Middle District of Florida.
Northeast Polk County, Legacy Park is a 10-minute drive to Disney World and close to other attractions. Community amenities include a swimming pool, cabana, and jogging and 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. This created problems when the real estate bubble burst. As the number of abandoned or foreclosed homes in each subdivision rose, it caused a loss of homeowners' dues for the governing association. At the same time, the homeowners' associations often had long-term contracts with cable providers that they couldn't cancel. In addition to owing more than $100,000 to Comcast, the Legacy Park Master Homeowners' Association cited $253,824.14 in unpaid HOA assessments. The Chapter 11 filing also lists a contract with Comcast Cable for "bulk cable service." The Four Corners Business Council, a group of business owners who work in fields related to real estate, has cited cable service as a growing financial headache for homeowners' associations. Pete Howlett, a Four Corners Realtor and chairman of the council, said that in some cases, the cable companies have shut off service to the entire subdivison or condo development, even if the remaining unit owners have maintained their monthly HOA dues. 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 in Celebration and Poinciana set the rules 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 have suffered badly since the market crashed. Some people cancelled their contracts to purchase a home within the development, even if it meant losing a large down-payment. Other units fell into foreclosure. That's left the associations with a shrinking pot of monthly dues for paying bills and maintaining basic services. Filing a Chapter 11 bankruptcy petition allows the Legacy Park association 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. |
