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Article
Courtesy of The Orlando Sentinel By Victor
Manuel Ramos
Published
April 25, 2010
Homeowners
associations have been struggling to make up for thousands in dues lost when
homes sit empty for months, waiting for foreclosure.
Two Orange County golf-course communities have decided to make their new
neighbors foot that bill.
Buyers in Stoneybrook West in Winter Garden and Stoneybrook East in east Orange
County have to add $4,000 to closing costs, mostly for dues that
went unpaid by previous owners while the house was in foreclosure for
more than a year.
The so-called "resale capital contribution" doesn't sit well with
real-estate agents and bankers, some residents and a group that advocates for
homeowners' rights against HOAs. Usually, buyers in those communities would pay
$1,000 to move in, but the fees increased as the housing crisis deepened.
"It's ridiculous, and we are trying to get it changed," said Kristy
Matthews, a Realtor and a homeowner at Stoneybrook West who has taken her
complaints to the association's board. "It scares away prospective buyers
and it lowers property values.... When some people are buying their first home,
it's especially difficult for them to come up with that kind of money."
But a representative for the Stoneybrook East community association says
the fees protect responsible homeowners from having to pay increasingly higher
costs to keep things running. Even in lean times, someone has to pay for the
water bill on lush golf courses.
"Our association was being restricted in cash flow resulting from
foreclosures languishing in court for excessive periods of time," said John
Santaniello, president of the Stoneybrook Master Association of Orlando at
Stoneybrook East.
The two communities made news earlier this year for their unorthodox
enforcement measures against homeowners behind on their dues. Delinquent
residents are prohibited from entering through automated gates, had their
cable and Internet services suspended and their guests — including pizza
deliverers — blocked from entering.
Those collection tactics are guided by Jim Gustino, an Orlando attorney who
represents both communities. Gustino said the Stoneybrook boards have had to
take drastic measures because they are owed hundreds of thousands of dollars in
association fees.
He said the high "resale" fees were imposed to encourage banks to
foreclose sooner or face the difficulty of selling with the additional charge
tacked on.
"Lenders were dragging their feet on these foreclosures, so the community
found itself with many homes stuck in neutral," Gustino said.
Adding to the problem are financially strapped homeowners who decide to stop
paying their association dues, which can add up to about $1,600 a year.
"We have some homeowners who have been thumbing their noses for years at
the association, and they are driving around the community in their
Mercedes," Gustino said. "After giving them a reasonable chance [to
pay], we will take action."
But critics say the $4,000 fee is not fair to buyers, and some think the
additional cost keeps houses vacant longer than needed.
"It's like you going to a restaurant and buying chicken and getting a bill
for others who ate before you and didn't pay for their food. How is that
fair?" said Alex Sanchez, president of the Florida Bankers Association, a
group that represents more than 400 banks and financial institutions in
Tallahassee. "These associations have to understand the backlog of
foreclosures that we have in our state. Bankers are not delaying foreclosures
because they want to."
The Stoneybrook communities have caught the eye of advocates who fight what they
say are abusive homeowners associations. They complain that Gustino not only
conceived these punishments, but that he is a Stoneybrook West resident elected
to his community's board and hired by the same board to represent it.
"He comes up with all kinds of inventions to get more money out of people
using the community association's powers," said Jan Bergmann, president of
Cyber Citizens for Justice, an anti-HOA group in DeLand. "Stoneybrook uses
some very outrageous methods."
Gustino denied any conflict of interest, but he announced this week that he will
no longer seek re-election to the board, partly to avoid a "lingering
perception" that could become "an unnecessary distraction to the
Board's work."
Donna DiMaggio Berger, an attorney and director of the Community Advocacy
Network in Fort Lauderdale, which advocates and lobbies on behalf of more than
55,000 property-owner associations in Florida, said HOAs have to be aggressive
to protect their interests.
She said the associations' collection efforts also have to avoid and overcome
legal challenges. Associations have a stronger tool — foreclosing on
properties themselves rather than waiting on banks, she said.
"The purpose is to collect your dues, not to be punitive and not to exact
your pound of flesh," Berger said. "You can put anything in a set of
documents, but it has to stand the test of being reasonable, and that's where
associations have to be smart about what they do."
HOA
Trying To Kick Resident Out
Homeowner
association blocks guests when fees go unpaid
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