Letter to the Editor of The Charlotte Sun

By Gerry Townsend     

E-Mail: [email protected]

Published August 6, 2012

Florida is a mecca for individuals who are lured by beautiful weather, affordable housing, low taxes, gorgeous beaches and the promise of paradise. Many homeowners will find themselves living in homeowner or condominium associations, also known as common interest realty associations. However, most people do not realize that homeowner associations are not regulated in the state, and homeowners have little consumer protections with regards to disputes with their associations.
   

Homeowners’ associations are governed by Florida State Law Chapter 720, but there are no enforcement provisions in the law or a governing body which regulates homeowners’ associations. A person who unknowingly buys in a dysfunctional, poorly managed community will find dissension and decreasing property values. Their dream of paradise can quickly become a nightmare.
  

When a homeowner has a dispute with their association which can’t be resolved, the only remedy is to pursue legal action either through mediation, arbitration or a lawsuit. Therefore, the Legislature has placed the burden and expense of enforcing the law on the homeowner, who is limited by amount of their personal funds. The board of directors, on the other hand, has a distinct advantage in legal challenges, because it has significant financial resources from assessments.
  

In contrast, condominium associations and cooperatives are more strictly regulated and are overseen by the Division of Business and Professional Regulation in the state Division of Land Sales, Condominiums, Timeshares and Mobile Homes. Florida condominium laws offer more consumer protections than HOA laws and the services of an ombudsman. (A quick definition:  A condominium association is multiple residences in one building;  in an HOA, each unit is separate).
   

Problems and complaints arise out of the nature of homeowner associations. They perform quasi-governmental functions and must deal with various complex issues. However, the governance of homeowner associations rests on the volunteer directors, who are unpaid, untrained and often unqualified.

  
This results in many common complaints, among them: boards abusing power, not following governing documents and the law, exercising bad management practices and lacking training. A number of attempts have been made over the years to create enforcement provisions for Chapter 720; all have failed. A recurring recommendation is to increase regulation and accountability of associations, but this has been essentially ignored by the Legislature.
  

Deed restrictions or covenants are formal contracts between members and the association. If an HOA board refuses to enforce deed restrictions, comply with the governing documents or address members’ concerns and take appropriate action, the only recourse members have is to engage in costly legal action: either mediation, arbitration or a lawsuit.
  

A report prepared by the Committee on Regulated Industries for the Florida Senate in 2008, states, “Arbitration of a homeowners’ association dispute may cost the parties as little as $500 or as much as $6,000 or more for the arbitrator’s service. Parties represented by an attorney would also have to assume that cost.” Court litigation is even more expensive, perhaps six figures or more.

  
None of these options is attractive to the average homeowner. In addition, the risk of losing a suit ups the ante for the homeowner because he or she would be required to pay for the association’s attorney’s fees too. And then, winning doesn’t necessarily mean success: There are no guarantees the association will not revert to business as usual.
  

Changing the law may seem difficult for a number of reasons. First, the current political climate is anti-regulation. Legislators are concerned about burdening the state with additional costs of regulation during lean budgetary times.
  

Second, powerful special-interest lobbies, such as attorneys and management companies, are opposed to increased regulation. They have created an industry from the lack of regulation and board member training, since boards are heavily reliant on these professionals to help run associations.

  
Finally, the homeowners do not have the power of a lobbyist behind them and don’t have a voice in the halls of the statehouse.

The solutions are rather simple, though.

First, the Legislature needs to change Chapter 720, the laws for homeowners associations; to mirror Chapter 718, the laws of condominiums. The two are basically the same type of entities, namely common interest realty associations. Second, the role of the condominium ombudsman should be extended to homeowners associations.
  

The costs of the increased regulation can be handled in a manner similar to condominiums by assessing a nominal $4 per unit surcharge in HOAs. Just as it does with condominiums, the state should require mandatory training and continuing education for board members.
  

Finally, residents need to become more engaged in demanding change. Cyber Citizens for Justice (www.ccfj.net) is a Website devoted to resident advocacy in Florida and does have a lobbying arm.

  
Ultimately, the solutions lie in the hands of residents. Prospective buyers need to do due diligence before committing to a particular community. Residents need to lobby their legislators through letters, e-mails, phone calls and in person to demand enforcement provisions and consumer protections in the HOA laws.