New rule: Homeowner associations have to report to state

Article Courtesy of The Palm Beach Post

By Kimberly Miller

Published December 17, 2013

The paint-color police and monitors of all things flagpole abound in Palm Beach County.

Homeowners associations, or HOAs, rule multiple communities, but until now, no one knew just how prevalent they are.

In the first-ever statewide census of homeowners associations, Palm Beach County ranked first in number of HOAs, topping Broward and Miami-Dade counties with its estimated 1,500 groups that oversee communities ranging in size from 10 to 5,000 homes.

Lawmakers required the Department of Business and Professional Regulation to take stock of the state’s HOAs in legislation passed this year for two main reasons: no one had ever done it before, and it’s the first step in creating state oversight for the powerful boards.

Condominium associations have long been governed by laws that give the state power to review complaints from residents, issue fines and even conduct recalls if boards act unlawfully.

HOAs have not been subject to similar oversight.

“There was no regulation before and we have to start somewhere,” said Sen. Alan Hays, a Central Florida Republican, who, despite a dislike for big government, pushed the HOA accountability bill during the 2013 session.

“I get so many reports of what I consider unconscionable behavior. I felt like it was necessary.”

The statewide list of HOAs counts 12,700 associations overseeing 2.5 million homes or undeveloped lots.

Past estimates of how many homes are governed by associations varied from 1.5 million to 3 million, said Jan Bergemann, a DeLand resident who has worked for HOA reform as president of the grass-roots organization Cyber Citizens for Justice.

HOAs were required to fill out the census by Nov. 22, listing their legal name, federal employer identification number, mailing address, total number of parcels and annual budget.

The budget information was not made public on the Department of Business and Professional Regulation’s website.

And the report still needs some tweaking.

There was double-up on parcel counts in some communities where both a master association and each of its sub-associations listed home numbers.

One Palm Beach County property manager accidentally put her certification number down as the parcel count, leaving a community west of Lake Worth with 14,742 homes. It really has 249.

“They didn’t specify whether we had to mark a master association differently so I registered them all,” said Paula Rap-pole, property manager for the Winston Trails Foundation, which has 20 sub-associations.

“Assuming everyone else did what I did, there would be a lot of duplication,” she said.

Still, Bergemann said he doesn’t expect the 2.5 million home count to change much because some HOAs have yet to register.

The 2013 legislation requiring the census includes some new oversight rules that govern recordkeeping and information requests.

It also requires the removal of association officers and directors who take kickbacks or steal association money.

Hays expects another bill will be filed during the 2014 session to clarify and add to this year’s bill.

“If you have a problem with an HOA, the only thing you can do is go to court,” Bergemann said. “There’s no ombudsmen, no official source of information. Even simple lawsuits over records requests end up with $30,000-plus in legal fees.”

One infamous Palm Beach County case pitted a Jupiter veteran who flew an American flag from a 12-foot pole in his yard against his association, which required flags be flown from brackets attached to a house.

The case, which started in 1999, even attracted former Gov. Jeb Bush’s attention.

After tens of thousands of dollars in fines and legal fees, the two sides settled a court case in 2007. Andres was allowed to continue flying his flag from a pole.

THE NEW PLAYBOOK

Legislation passed this year to increase accountability requires HOAs to register with the state for the first time.

New rules also include:

HOAs must maintain official records within 45 miles of the community or within the same county.
Association members must be allowed to photograph records at no charge.
Officers and directors who take or solicit kickbacks or steal association money must be removed.
Homeowners must be allowed to elect at least one member to the board when 50 percent of a community is owned by people other than the developer.