Article Courtesy of The Orlando Sentinel

By Steven Lemongello   

Published December 28, 2015

In the wake of the controversy over ballooning charges on back-due homeowners-association fees, a group representing Poinciana residents filed a lawsuit Tuesday challenging the legality and authority of the association itself.

The Friends of Poinciana Villages claim the homeowners association has not done an audit, did not put contracts out to bid properly and used funds improperly.

The lawsuit also questioned the election process for the association's board and local village boards, claiming no elections were held in 2015. It seeks an injunction against one village board for what it says was improper removal of its president in a special meeting just last week.

Thomas Slaten, an attorney for the homeowners association, denied the allegations and said the information in the lawsuit was incorrect and that many issues had been legally settled.

"We never received an offer for mediation, and I'm surprised to receive this lawsuit without it," Slaten said.

A story in Sunday's Sentinel cited several Poinciana residents who said that the debt on their past-due fees had been sold to collection agencies and had ballooned by thousands of dollars in late fees and legal fees. The association has since defended the sale of debt and said that all accounts sold were years past due.

In the complaint, filed in the 10th Judicial Circuit Court in Polk County, Friends of Poinciana Villages attorney Jennifer Englert claims that developer Avatar Holdings violated the terms of the 1985 agreement setting up the association.

The complaint claims that Avatar "has refused to turn over control to the association per the terms of the 1985 agreement" and continues to have representation on the association board and smaller village boards because it controls one vote for every plot of land it owns.

The suit also alleges Avatar has representatives on village boards where it doesn't own land, such as Village 6, and village boards with no residents at all, such as Village 4.

The complaint also claims that the Village 1 President Peter Jolly and Vice President Elizabeth Welsh-Cousins were inappropriately removed in a special election Dec. 16 without being properly notified.

Jolly referred all comment to Friends of Poinciana Villages President Keith Laytham.

The suit seeks an injunction against Village 1 preventing it from holding a new election, claiming that "Avatar has wrongfully controlled the board make-up in the first place."

Avatar could not be reached for comment.

The Friends of Poinciana Villages also claims in the lawsuit the association committed multiple violations of Florida Chapter 720, which regulates homeowners associations.

The complaint claims that the association hadn't submitted a final 2014 audit to members by September. It also alleges the association did not seek competitive bids for a $4.4 million contract, despite regulations that require competitive bids for contacts larger than 10 percent of its operating budget.

According to the lawsuit, the Articles of Incorporation requires staggered elections for board members, with no term lasting more than three years, but instead the rules were changed to allow four-year terms.

Meanwhile, the 2016 elections for village boards were moved by the association to February without the village officials' consent, the suit claims.

Besides the Village 1 election injunction, the Friends of Poinciana Villages is seeking a judgment "in excess of $75,000."

Slaten described Friends of Poinciana as a for-profit organization "that says it represents residents, but nobody actually is identified" in the suit.

"We don't even know if they actually represent any homeowners," Slaten said.

The group being listed as "for-profit" on state paperwork was a mistake that has been corrected, according to Laytham.

"Friends of Poinciana Villages is a Florida non-profit corporation that represents the interests of both Poinciana Villages residents and friends of Poinciana Villages residents," Laytham said in an email.

Slaten also said that any issues with the 1985 agreement "have already been litigated" as part of a complaint filed in August by the association against Jolly and two other board members.

That lawsuit dealt with a tumultuous period in which control of the board seesawed, with the association's management firm being first fired and then restored, and locks changed on association offices. The association was granted an emergency temporary injunction against the board members.

"And regarding elections, any issue involving elections should be brought up at board meetings," Slaten said. "[This] is the first time they are raising those issues."