When homeowners battle their associations

Article Courtesy of The Charlotte Sun Herald


Published May 2, 2008

Barbara and Carlos Batista thought they found their dream house in a dream neighborhood.

The Batistas now feel like they lived through a nightmare.

They are hardly alone, according to the testimony gathered by a Florida House Select Committee on Condominiums & Homeowners Association Governance. Rightly or wrongly, homeowners throughout the state feel bullied, harassed and wronged by their associations.

A year ago March, the Batista family moved from Miami-Dade County to Lake Suzy, looking forward to peace and quiet compared to city life in Miami-Dade County

But that wasn't to be.

No sooner than the Batistas closed on their new house, they found themselves pawns in a battle between her neighborhood Pembroke Property Owners Association and KB Homes, the builder of their house.

"It's been hell," Barbara said.

Batista claims former Pembroke association president, Fred Colwell, and Leroy Dunn -- a former Deep Creek Section 23 Property Owner's Association manager who worked as a consultant for the Pembroke association -- came to her door day-after-day. Batista said she'd see them 20 or more times a day, sometimes photographing her home.

"At the beginning, I said give me a list of all the wrong things with the house, and I would give them to KB Homes," Batista said. "I am still waiting for that list."

The association complained KB Homes ignored the architectural, landscaping and other covenants of the association. Batista did say she received the wrong deed restrictions from the builder.

The Batistas learned the association intended to lien her property, which Barbara said they weren't told at the closing. She accused Dunn of approaching her with a threat of being sued by the association for not paying its attorney, legal search and other bills.

"It's clear to me now, the association wanted to use me to go after KB Homes," Batista said. She and her husband realized they were caught in the association and builder's battle.

"It was a year of harassment I went through (with the association)" Batista said. "My original thing is that I needed someone to stop those people."

The Batistas accepted an offer from KB Homes to defend them with its attorney. Barbara said she believed in KB Homes because the company was addressing small issues, such as replacing her front door.

Once KB Homes attorneys defended the Batistas, Barbara said the threats of liens, violations and a lawsuit disappeared -- on the day of the settlement between the association and KB Homes.

"I never got my day in court," Barbara said.

KB Homes no longer builds homes in Lake Suzy.

Association vs. builder

Colwell said he can feel empathy for the Batistas and could understand any hard feelings they feel toward the association.

"KB Homes did not do them justice," he said.

"When someone buys a house from a builder in a deed-restricted community, they should make very sure they (know) the covenants," he said. Colwell also believes people should hire their own attorneys at closings.

According to Colwell and other Pembroke board members, KB Homes started building houses totally disregarding the association and deed restrictions. The association did get a court-mediated agreement requiring the builder to follow the association's architectural and other guidelines, but board members never viewed the builder as following the agreement.

Sean Ellwood, now the president of the Pembroke association, said, "(KB Homes) tried to circumvent the process, and that's when the Batistas moved in."

Ellwood said once the house was sold, the association could no longer hold the builder responsible. The Batistas were the first of several homeowners caught up in the dispute.

"Associations our size get tromped on because we cannot raise the money to fight a multimillion company like KB Homes," Ellwood said.

KB Homes spokeswoman Cara Kane said her company was following "100 percent" the terms of the original agreement with the association. However, she said the association continued to file liens against KB Homes properties.

The final settlement between the association and builder took more than four years to reach. It also led to an increase from $75 to $200 within four years in the annual assessments the 82 properties in the Pembroke association pay. Colwell said the hike was due to more than $60,000 in attorney fees.

In the final settlement, KB Homes agreed to pay the association $60,000. The association agreed to dismiss its suit against the Batistas.

"They should not have had any problems with me from the beginning," Barbara Batista said of the association board.

The experience was so emotionally trying on her that she testified before the Florida House of Representatives Select Committee on Condominiums & Homeowner Association Governance in February.

Committee investigation

Florida House Rep. Julio Robaina, R-Miami, chaired the Select Committee on Condominiums & Homeowner Association Governance that held public meetings in Miami, Tampa and Tallahassee.

The committee listened to hundreds of homeowners complain about their treatment by associations, malfeasance and other mismanagement issues of association boards, as well as exorbitant attorney fees charged to associations.

Besides Barbara Batista relating her battle with the Pembroke Property Owners Association in Lake Suzy, Kim Jakubaitis, now president of the Deep Creek Section 20 Property Owners Association, testified to the committee how a state arbitrator with the Department of Business and Professional Regulation overturned her association's 2004 election after determining irregularities in its handling.

Dunn was Deep Creek Section property manager at the time and was dismissed after the state overturned the election and Jakubaitis and her board were seated. Then a licensed property manager, he was also being investigated by the state for a complaint filed by Jakubaitis. Dunn voluntarily turned in his license to the state before that investigation was complete.

"It would have cost me ($300-plus) to renew my license, and I only made $600 that year," Dunn said. He was accused of working for Pembroke as a part-time property manager and consultant without a license. However, those allegations were dismissed. Any consulting work Dunn did for Pembroke, for which he was paid $100 an hour, was done before he retired his license.

In response to Barbara Batista's testimony, Robaina said he called Dunn and Colwell, asking them to appear before the committee, but they hung up on him.

Dunn and Colwell said they did talk to Robaina, but they said they did not know him and had no verification of who he was. The association members did received written notification to appear voluntarily with association records before the committee within two days of the hearings.

Dunn and association board members declined, especially after viewing a video of committee meetings on myfloridahouse.gov Web site. Ellwood said he didn't think the association would get a fair hearing, while Dunn said, "If this wasn't a personal agenda, I don't know what is."

Committee conclusions

The committee did find that reforms were needed for both for condominium and homeowner associations.

Unlike condominium associations, homeowner associations do not enjoy any state oversight.

Condominium associations pay $4 a unit for a state-appointed ombudsman, DBPR mediation and other oversight protections for condo owners. But state ombudsman spokesman Bill Raphan said, "Homeowner associations are basically on their own."

The DBPR does mediate homeowner association disputes, such as Jakubaitis' complaints against the Deep Creek 20 association, but it is the loser of the mediation that pays the costs. In the case of Deep Creek, the fees ran up to $50,000.

The committee called for similar regulation and oversight of the homeowner associations that condominiums now enjoy.

"Condos (owners) at least have an arm of government," Robaina said. "It's time to start doing something."

However, the final report also stated, "(The committee members) were uncertain regarding the number and scope of homeowners associations and the burden that regulation will invariably have on the DBPR."