POA Lawyer Denies Charges


Article Courtesy of The Tampa Tribune


Published December 1, 2007

CORY LAKE ISLES - The property owners association response to a lawsuit filed by seven Cory Lake Isles homeowners over access to financial records can be summed up in one word: denied.

Philip Friedman, the association's lawyer, denied that the Cory Lake Isles POA collected assessments from homeowners between 2002 and 2006.

He denied that Gene Thomason's development company, Cory Lakes Limited, was the developer of Cory Lake Isles and denied any knowledge of Thomason's role as the owner, president and sole officer of Northeast Development Co.

He denied that the Cory Lakes Isles POA failed to respond to numerous written requests for documentation. He also denied that the plaintiffs requested mediation with the POA and denied that the POA ignored the request.

Friedman did not file a motion to dismiss the lawsuit, but he wrote that the neighborhood's deed restrictions require homeowners to submit to binding arbitration to resolve disputes with the POA, and the plaintiffs neglected to do so.

"That defense will not stand up," said Mark Basurto, who represents the plaintiffs. "Our claim arises out of the statute, not the covenants."

During the past five years, Cory Lakes Limited billed Cory Lake Isles residents more than $4.6 million to run the nearly 1,000-home community. Seven homeowners sued the developer-controlled property owners association for access to the community's financial records.

Cory Lake Isles' neighborhood covenants gave Thomason complete control over the association. Fourteen years after it was established, the board never has held elections.

Though the covenants say the property owners association had the sole authority to assess residents and maintain the community's assets, it never did. Thomason's development company billed homeowners more than $1,000 a year.

The fee went up every year, even though the number of homes kept increasing. By 2006, the community had more than 900 individual owners and each was billed $1,475 for operations and maintenance.

Residents say their checks were never deposited into an account for the POA. But if they didn't pay, the POA filed liens for unpaid assessments.

In addition, Friedman has argued that Thomason should not have to pay for the association's legal fees. Florida law says that a developer-controlled homeowners association board cannot use association funds to defend itself in a lawsuit, but the POA board has threatened to levy a special assessment.

He said that because the lawsuit is against the association, and not the individual board members or developer, it is "entirely appropriate" for the board to use association funds for its legal defense.

Basurto disagreed. "I think he's wrong," he said. "They can't go back and bill the individual homeowners, particularly when the developer controls the board and is the one causing the problem."

The board raised homeowners dues this year to make up for a $10,000 shortfall because 150 homeowners last year didn't pay their dues.

"It will come to a head when they try to assess everybody - and let them try," Basurto said.

Basurto this week served Thomason's Cory Lakes Limited with a subpoena to inspect its financial records and scheduled a deposition with POA President Jane Taggart.