Developer has residents outraged over maintenance fee jump

Homeowners' maintenance fee soars from $25 a month to $242.

Would Zacco foreclose on those who don't pay?


Article Courtesy of The Ocala Star Banner

By Bill Thompson

Published August 30, 2010


The bitterness built up over the years inside one small community in the State Road 200 corridor has led some residents to conclude that the best view of their neighborhood is in the rear-view mirror.


Some frustrated homeowners in Hardwood Trails reached that point last week after a judge ruled that the developer, JP & Sons Development Co., owned by Ocala developer John Zacco, could foreclose people's homes for failing to pay fees for garbage collection and cable TV service.


Based on County Judge John Futch's findings, some in the 55-plus community could be forced to surrender their home for owing Zacco just $996.

Zacco's lawyer maintains the residents were legally obligated to pay, and that the developer's position is supported by reams of case law from throughout the state.

Futch's decision came eight months after the homeowners association, which is controlled by Zacco, announced that the community's maintenance fee was being raised to $242 a month for 2010 — a nearly tenfold increase over the $25 monthly charge spelled out in the residents' sales contracts.

Much of the rate hike was to cover tens of thousands of dollars in legal fees incurred by the homeowners association. Ironically, the association — largely Zacco — ran up those fees fighting legal actions brought by the residents themselves because of their dissatisfaction with Zacco, his product (he was also the Hardwood Trails homebuilder), and his treatment of them.

"We're through! Zacco can raise the association dues to what ever he wants to pay all of his legal fees. We're in the process of turning the home over to the bank. We had a reverse mortgage and it will be deeded back to the bank," Judy Olsen said from her home in Hardwood Trails Friday morning August 27, 2010. The developer of the community, John Zacco, just recently raised everybody's association fees from $25 a month to $250 a month and the majority of the residents are now suing him.

Although multiple cases are pending, the most recent of which was a federal racial discrimination claim filed against Zacco, some residents think justice is now unattainable.

Futch, they add, showed that by siding with Zacco; thus, they want out — now.

A long battle

Zacco and many of his customers have been at odds for years, as evidenced by multiple lawsuits, some that date back to 2006.

Individually, court records indicate, they cite shoddy workmanship, or work just not done at all; Zacco reneging on the installation of items that were promised; and his failure to deliver on time.

Some residents balked at paying and were themselves forced to spend tens of thousands of dollars to finish their homes, which originally went for well above $200,000.

More globally, many in the 41-home subdivision have battled Zacco over a security gate at the entrance that until recently had not worked; a swimming pool and spa that remain unfinished; and common areas, including a walking trail, that were not maintained — despite the fact that homeowners were paying for these amenities.

A lone bright spot was the completed community clubhouse that featured a card and game room, an exercise room with equipment, a billiards table and a big-screen television.

In court records, Zacco, who besides being the developer of the community along Southwest 95th Street was also its builder through his company Thoroughbred Homes, has denied any wrongdoing.

On occasion, he has blamed the residents for their failure to live up to their contracts and sued to force them to pay up.

In the ongoing legal brawls, the anti-Zacco contingent thought it had scored a big victory last year.

Two judges, ruling in separate Hardwood Trails cases, declared Zacco to be an unlicensed contractor — a position Marion County officials shared until later dropping their complaint against Zacco.

The judges also found that the sales contracts for the homes were unenforceable.

Residents who believed they were free, however, were soon disappointed.

Sales contract or deed restrictions?

The homeowners subsequently tried to argue that the rulings by circuit judges Sandra Edwards-Stephens and Brian Lambert also voided the community's deed restrictions.

Those rules were noted in and subordinate to the sales contract, the homeowners maintained.

That was important because those covenants, for instance, granted Zacco exclusive control of the garbage and cable TV fees and outlined how the homeowners association would be governed.

Residents then pushed for the dissolution of the association and wanted new elections — thus freezing Zacco out.

The court rulings, however, affected Thoroughbred Homes and not Zacco's development company, JP & Sons.

Despite Zacco's common ownership, those are distinct entities legally.

Edwards-Stephens, in an order issued last December, found that the sales contracts and other paperwork, including the deed restrictions, were “valid separate documents” and that “the parties are bound by the covenants and restrictions of record.”

The community eventually held its new election in December, and Zacco easily prevailed, as did two of his allies, including one who does not live in Hardwood Trails, who were installed on the board.

That's because once Zacco paid delinquent association dues he owed for vacant lots he owned within Hardwood Trails, the deed restrictions granted him nine votes compared with the one vote allotted to homeowners.

Along the way, many residents quit paying their fees either out of spite for features they felt had not been provided or were unnecessary, or because they believed Zacco was not entitled to the proceeds.

Their refusal now might cost some of them their homes.

‘He only wants to be paid'

Last February, the association's board adopted an amendment that allowed the group to charge “special assessments” to anyone who might have sued Zacco. It was designed to “shield the Association members who have not participated in such litigation.”

The homeowners responded in April with a new lawsuit that basically restated previous claims about the soundness of the defective sales contracts.

That action added 10 new homeowners, many of them couples, to the 18 already fighting Zacco. In all, 50 people have signed on to the cause.

In June, Zacco countered by filing foreclosure actions on five homeowners for the delinquent trash and cable TV fees.

Independently, the homeowners association did likewise for the unpaid maintenance fees.

Joseph and Carol Desourdy provided a test case for the challenge, and went before Futch on Wednesday.

David Gibbs, a Tampa lawyer representing the couple, argued in court documents that the Desourdys were “retired and disabled senior citizens” who “were overpowered by [Zacco's] superior bargaining position” at the time they bought their home.

Gibbs also maintained that it was “unconscionable” for Zacco to foreclose because the couple had no option in choosing providers for those services — which they might never use anyway — and because of Zacco's “one-sided right” to charge those fees without the Desourdys being allowed to vote on the contracts or having a process for challenging them.

Gibbs also wanted the judge to wait until the April lawsuit was concluded and pointed out that Zacco — who according to residents has been ducking being served in that lawsuit ever since it was filed — was taking advantage of the system.

Desourdy said she has tried to sell her home on her own for a year. But once she and her husband, who suffered a stroke since they moved into Hardwood Trails, return from vacation next month, she will sign up with a Realtor. “I have been through a lot and I just want out of here. Tomorrow isn't fast enough,” Desourdy said.

On Friday, Judy Olsen, who co-owns her home with her husband, Al, and her 95-year-old mother was in the process of turning her home over to her mortgage company.

While not on the foreclosure list, Olsen plans to move to SummerGlen near Marion Oaks, where for $125 a month in fees, the family will have access to a swimming pool, tennis courts, an exercise facility and even a golf course.

“The judge had no consideration for the human factor,” she said. “This is not a happy place here because of Johnny Zacco.”

Don Kronen, who spent $60,000 to complete his home after Zacco quit working on it, now faces being foreclosed for owing $3,251 to JP & Sons and the association.

Kronen filed one of the first lawsuits against Zacco in 2006 and believes a litany of officials — including the attorney general's office, local prosecutors, state business regulators, county building staffers and the County Commission — all bear some responsibility for letting the situation in Hardwood Trails deteriorate to this point.

Their best advice to residents — get a lawyer and fight Zacco in civil court — has proven pointless, Kronen said. He's calling for a criminal investigation.

“We're getting ripped off, and we seem to have real difficulty stopping this,” Kronen said. “He's the Bernie Madoff of Marion County as he made off with our money.”

“I'm just tempted to walk away. I'm not going to be sitting here paying Zacco after what he's done to me for the last 4 ˝ years. It's not going to happen. I'll just leave.”