At Hardwood Trails, it's residents vs. developer

Article Courtesy of The Ocala Star Banner

By Bill Thompson

Published October 21, 2009

The gate is open, because it always is. A pool is available, but unfit for swimming. A walking trail is nearby, but likely impassable without a machete.

Welcome to Hardwood Trails, a small, quiet community tucked away off the State Road 200 corridor that caters to people 55 and older.

Outwardly peaceful and well-kept, the neighborhood along Southwest 95th Street seems the epitome of the comfortable, worry-free lifestyle Florida developers offer to appeal to senior citizens.

The appearance, however, belies the emotional turmoil felt inside many of the 41 homes here.

Many of these seniors are in a pitched legal battle with their developer, John Zacco, whose unfulfilled promises and seeming indifference, they say, have created a climate of fatigue, frustration and bitterness within the community.

Relief for them might come soon. But it would not be fast enough, after three years of heartache.

That's because what further irks many Hardwood Trails homeowners is that their pleas for help went unheeded by county officials, law enforcement, prosecutors and state business regulators — all of whom told residents there was little they could do and urged them to get a lawyer, advice that has created a legal bog of lawsuits, counter lawsuits, small-claims actions and federal discrimination complaints.

Residents — from left, Gene Rowe, Judy Olsen and Sheilah Halker — look over an abandoned swimming pool at the Hardwood Trails clubhouse. The pool has not been maintained for three years, and Rowe and other residents clean it out and pump water out of it from time to time to keep it from becoming a health hazard.

"Everybody's getting pretty upset, but nobody seems to know how to handle it," said Don Kronen, one of three homeowners suing Zacco.

"He is the guy who had all the responsibility, and he's done nothing, and nobody else has done a damn thing. And that's why 40 families are in a mess right now. Three neighbors have died since all this started. They paid for those amenities and never used them. He's great at sowing turmoil."

‘A nightmare'

The homeowners' headaches partly stem from construction problems with their homes.

Several attempts to contact Zacco for comment were unsuccessful. One of his lawyers did respond, but not his personal lawyer.

In court records, Zacco has denied any wrongdoing.

Still, "everyone we have talked to had something wrong" with their home, said Frances Burnham, a part-time resident from Massachusetts who, with her husband Arthur, bought in Hardwood Trails in 2005. "Most people either fixed it themselves or did not want to be bothered."

For example, the Burnhams argued with Zacco over the lack of a Roman shower in their bathroom, one of several things not done in accordance with their plan.

Zacco, she said, insisted the Roman shower had been installed — something, since her husband was a carpenter, Burnham knew was false.

When the dissatisfied couple refused to pay the final installment on their $233,260 home, Zacco sued. The Burnhams counter-sued.

"It's been a nightmare," Frances Burnham said. "I never dreamt this could happen."

That thought echoes throughout the community, much of which frets that Zacco and his subdivision have failed to live up to their expectations — or their sales contracts.

"Every attention is given to detail and superior building practices," a sales brochure says of the "quality" homes within the community.

Kronen disputes that.

Court records say that when Kronen inspected his $225,000 home, supposedly ready almost a year late, he found holes in the walls; door openings that were the wrong size (which necessitated tearing out concrete-block walls and starting over); insulation that was absent or was the wrong type; and a garbage disposal that was missing.

Kronen complained, to no avail. Ultimately, Kronen says he gave Zacco $56,000 to finish the house, which he didn't do. He eventually spent $60,000 more to finish it himself.

Kronen sued.

Zacco denied that he was responsible for any of the problems and blamed Kronen for slowing the process with changes, court records indicate. Zacco countersued for $73,038 in damages. Kronen denies any foot-dragging on his part.

Promotional literature also touts Hardwood Trails as a "private gated community."

Well, it might be if the gate worked, residents say.

Judy Olsen, who has lived in Hardwood Trails for three years, said residents have pleaded for years to have the gates properly installed and operational — with no response from the developer.

A community of elderly residents, she added, feels exposed and is fearful of not having whatever extra layer of security the controlled-access system could supply.

The lack of a functioning security gate was cited by Circuit Judge Sandra Edwards-Stephens in April in granting the residents' request to appoint a temporary receiver to oversee the community.

"Walking trails, Clubhouse with many recreational activities, heated pool and a bird sanctuary are here for the enjoyment of our residents," the sales brochure says.

Olsen describes the walking trail, officially dubbed the "Savanna," as little more than a swamp.

As for that pool, the concrete has been poured but the only water it contains, when it has water, is the stagnant remnant of rain.

Olsen, 66, said she and her husband, Al, relocated from Minnesota to Hardwood Trails so her 93-year-old mother, Georgina Bruce, who is a co-owner of the house, could exercise in the heated pool.

Yet, "she hasn't been able to use it" because it's unfinished, Olsen said. "At 93, how much longer is she going to be able to enjoy nothing?"

A lone bright spot is the clubhouse, which is finished and in good shape. It features a card and game room, an exercise room with equipment, a billiards table and a big-screen television.

License to frustrate

Beyond not having amenities they paid have for, what fuels many residents' frustration was the surprising discovery that Zacco had no license to even nail a pair of two-by-fours together.

Sales contracts he inked with residents noted that he was the "builder," court records indicate.

Yet in November 2006, Zacco was found to be an unlicensed contractor by the Marion County License Review Board.

Zacco's company, Thoroughbred Homes Inc., had hired a state-licensed contractor from Boca Raton, Anthony Lasorsa, to pull permits on its behalf. Residents say they never heard of or saw Lasorsa until after complaints about the construction were aired.

The licensing board fined Zacco $2,500 — a penalty that was never imposed because the county dropped the case a few months later.

In court documents, Zacco's lawyers have argued that he qualifies for a "developer exception."

State law allows developers to bypass licensing requirements to build on sites where they have a "legal or equitable interest."

Zacco's lawyers asserted that just having the intent to build provided him leeway from the law.

"Even the promise to do something, or not do something, with real property can constitute an equitable interest," they argued in a filing in Kronen's case. And at Kronen's lot, for instance, there was "clearly a promise . . . to do something" by Zacco.

Three times this year, however, that contention has been quashed.

Judge Edwards-Stephens, in one case, and Circuit Judge Brian Lambert, in two more, have determined that Zacco was not entitled to the exemption, and thus declared him an unlicensed contractor.

Where's the generator?

To call this situation litigious would be an understatement.

The Olsens and Will Halker, a retired Army lieutenant colonel-turned lawyer and transplanted Las Vegas resident who now finds himself as the homeowners' chief counsel, have both successfully sued Zacco in small-claims court.

The Kronens, Burnhams and another couple, Joan and Claude LeBel, are fighting Zacco in circuit court.

The LeBels had construction problems, like the other couples, on their $220,000 home.

Yet they also went after Zacco over a generator. The couple maintains that Joan LeBel suffers from a medical condition that requires round-the-clock access to electricity. The generator was necessary in case their power went out.

Although it was initially approved, Joan LeBel said, Zacco took out the generator after a hearing before a group of homeowners he hand-picked. He claimed the LeBels installed it in the wrong place. They say they put the generator in the only spot county officials said it could go under land-use regulations.

In addition to their lawsuit, the LeBels have filed a discrimination complaint with the U.S. Department of Housing and Urban Development, maintaining Zacco's refusal to permit the generator violates the Americans with Disabilities Act.

A second federal complaint against Zacco has been made by a couple who bought a home in Hardwood Trails for their retirement.

According to neighbors, the couple has filed a racial discrimination action because Zacco reportedly objected to them moving in because they are black.

In addition, court documents reveal that Zacco is also being sued by one of his former lawyers, Eric Gifford of Ocala, for not paying legal fees. And Regions Bank has foreclosed on Zacco's 21 vacant lots within Hardwood Trails, seeking $522,197, court records show.

Troubled HOA

Besides construction faults with their homes, the common thread in the residents' complaints is the fault they found with how Zacco has operated the HOA.

Which means the vital litigation for the homeowners collectively is Halker's request to have the current HOA dissolved, with new board elections held.

Judge Edwards-Stephens is scheduled to hear arguments on that on Nov. 20.

The association is "a shell being manipulated" by Zacco, who exerts "absolute dictatorial control," the residents' lawyer claims in court records.

The litany of allegations, as found in court documents, include Zacco's failure to:

Inform them about, or hold any of, the required annual HOA meetings.

Provide residents with an annual budget or a statement about the HOA's finances.

Separate the revenue collected from the homeowners' $25 monthly maintenance dues from his company's accounts.

Relinquish control of the HOA to the homeowners after 90 percent of the homes were no longer under his control.

After the 2008 HOA meeting, scheduled for last December, was finally announced and then subsequently cancelled, nearly 20 homeowners went to court seeking to have the association placed into temporary receivership.

They wanted a judge to name an independent manager to monitor the goings-on until the budget and board-membership matters could be rectified.

Edwards-Stephens complied, citing the cancellation of the annual meeting and the non-functional security gates as grounds.

The receiver, Ocala lawyer Todd Hopson, was given two tasks: formulate the HOA's budget and monitor new HOA elections.

Resolution coming?

Thus, elections are scheduled for Oct. 29, the day many homeowners hope to become independent of Zacco. That remains to be seen.

Zacco retains 21 vacant lots of the original 65 Hardwood Trails parcels, plus two sites for model homes and the clubhouse lot.

Almost all of those lots are held by JMSB Family Partnership I, a company Zacco created in June 2007, according to state records. The clubhouse, records indicate, is still listed under JP & Sons Development Co., another Zacco entity.

State records show that all of these firms, plus others under the JMSB brand and the asset-management companies that have partnered with them, are headquartered at Zacco's Ocala office. He is the only corporate officer mentioned.

The residents contend the criteria for conveying control of the association to them was met in 2007, when Zacco transferred ownership of those vacant lots to his other company.

He has refused, however.

The homeowners are counting on the previous rulings by Edwards-Stephens and Lambert that Zacco was an unlicensed contractor, which under state law would render their contracts void and unenforceable — and by extension, their covenants.

That would give them a majority among voting property owners.

Their problem is that while all corporate roads lead to Zacco, their beef, as shown in court records, is with Thoroughbred Homes, and Edwards-Stephens validated JMSB as the author of the community's covenants, since it had assumed control from Zacco's other company, JP & Sons.

Her ruling upheld the community's rules that Zacco, as JMSB, is permitted nine votes per lot, compared to just one vote per household among the other 41 homeowners.

So, Zacco has a 216-41 advantage, factoring in all the parcels he owns.

Ted Schatt is an Ocala lawyer who represents JMSB Family Partnership I, and not Zacco personally nor any of the other Zacco holdings.

He declined to comment in detail about much of the controversy because he represents just JMSB.

But on that aspect, Shchatt said, "The governing documents exist to protect all the homeowners and lot owners. JMSB has an interest to protect the rights of all the homeowners and to protect their interests."

Renee Thompson, an Ocala lawyer retained by Zacco to represent the HOA, argues in court documents that the covenants and deed restrictions would still be binding because they were drawn up prior to any sales contract.

Still, there is little doubt about how the homeowners feel.

Halker tacked onto his court filing calling for the dissolution of the HOA an affidavit indicating how many homeowners wanted Thompson to drop any objection to his motion. It was signed by 39 of the 41 homeowners.