Courtesy of The Orlando Sentinel
August 16, 2010
Recessed lights have been ripped from the ceiling and
yanked cable wires have left a gaping hole in the wall, yet the residents of
Avalon Lakes must still pony up $44 a month to the community's cable-TV company
for service to the vacant town home — and every other foreclosed and
delinquent house in the neighborhood.
For years, subdivision developers have locked their homeowners associations into
blanket cable-television contracts that force the associations to pay for every
home in a community — even if a house is empty or the owners are behind on
their homeowner fees.
But now, with associations racked by record foreclosures and delinquent
homeowner fees, some communities are balking at paying for unused cable service
in vacant houses or service to homes where the owners long ago stopped paying
their association fees.
"We're not paying for another empty house," said Hobie Fisher, a
member of Avalon Lakes' homeowners association. "This was the deadbeats'
The community of about 900 houses and town homes in east Orange County is
supposed to pay Comcast Corp. $44,000 a month for the neighborhood's cable-TV
service. But with more than a third of the association's property owners
stiffing the board on their monthly homeowner fee of $119, attorneys and board
members are trying to negotiate down the cable tab. Based on their crippled
revenue, the board this month is paying only $25,000, or 56 percent of the bill.
Comcast spokesman Bill Ferry said the cable operator recognizes that financial
challenges, often caused by foreclosures and related vacancies, may affect an
association's ability to adhere to the original contract.
"In such situations, Comcast works directly with homeowners associations on
a case-by-case basis to assist them meeting the obligations of the
contracts," Ferry said this week. "Sometimes the terms of the
contracts are modified if necessary."
He said Comcast is working with Avalon Lakes, though he could not disclose
Last year, Comcast's cable-payment demands bankrupted the Davenport community of
Legacy Park, which filed for Chapter 11 reorganization in U.S. Bankruptcy Court
for the Middle District of Florida. Legacy Park's biggest debt was a $105,305
cable-TV bill owed to Comcast.
"The homeowners association went bankrupt just to get out of that
contract," said Orlando Vacation Realty broker Pete Howlett, chairman of
the Four Corners Business Council in the Davenport area. "Quite a few
developers did that [agreed to blanket cable contracts for their subdivisions].
It was an opportunity to make money."
Winter Park resident Robert Secrist, who helped develop Avalon Lakes, said
bundled cable contracts have been commonplace in new subdivisions for some time.
The residents get cable-TV service for below-retail costs, and the developers
get some money from the cable company, he said, though he added that, in the
case of Avalon Lakes, "it wasn't very much."
When Avalon Lakes was being built in 2003, no one really foresaw the meltdown of
the housing market, with its foreclosures and the delinquent fees that
homeowners associations face today, Secrist said. He said he doesn't blame the
community for not paying the full bill, and said he would never do another
communitywide cable deal.
"It's not worth it," he said.
Avalon Lakes has a 10-year Comcast contract, with built-in rate increases of
about 7 percent a year. The contract expires in 2013.
Donna DiMaggio Berger, a partner with the Katzman, Garfinkel & Berger law
firm based in Fort Lauderdale, said homeowners associations can aggressively
negotiate the terms of their cable-TV contracts, and she advises them to
obligate their communities for no more than five years of coverage.
Although Florida law allows condominiums to get out of cable-service contracts,
she noted, state statutes do not offer that kind of an "out" for
"In a condo you can cancel, but not in a homeowner association. That may be
because of the erroneous feelings that there are less service contracts entered
into by HOAs," she said. "… That statute should be amended to allow
HOA members to cancel developer contracts."