do we need an attorney?
We would rather collect the money!
An Investigative Report By Jan Bergemann ( 07 - 04 - 2003 )
|A lien on a home in a homeowners' association
plus the threat of foreclosure finally caused a homeowner to check some
documents. Annoyed about the mistreatment by a Community Association
Manager, somebody finally did some research and discovered that the management
company had created another great source of income by filing these liens.
Obviously, members of Leland Management, Inc. of Kissimmee, Florida established
a booming business from filing liens and preparing the releases of liens
or “satisfactions.” According to the Florida Supreme Court, this
constitutes Unlicensed Practice of Law (UPL).
One of Leland Management’s employees, Richard Murphy, filed a lien against a homeowner in Chapman Groves HOA, Inc. According to a statement from the homeowner, Richard Murphy explained that the extra $125.00 on the billing statement was for “legal fees for the attorney who prepared the lien.” But it turned out that no attorney was ever involved in this lien, nor in many other liens filed by Leland Management employees!
A complaint to the Florida BAR quickly exposed the real truth behind this ongoing violation of Florida Statutes. The law firm of Clayton & McCulloh distanced itself from being part of these filed liens. In a letter to the Bar Counsel of the UPL Department in Orlando, Kenneth M. Clayton clearly stated (quote): "We do handle legal work for this client but we do not have any open matters for this client involving liens at this time."
In another letter to the Florida Bar, explaining the reasons for his violations of Florida Law, Richard Murphy tried to blame the homeowner, by stating (quote):" With regard to the complaint by Ms. XXXX, she has repeatedly not paid the Association Assessments and this complaint is one more issue in an effort by Ms. XXXX to cause the Association additional expense because the Board of Directors has not allowed her dogs to run loose in the community."
This opens up another question: WHY is this complaint to the Florida BAR for Unlicensed Practice of Law – obviously Richard Murphy’s own personal violation -- causing additional expense to the association?
Pretty obvious the Bar Counsel didn't fall for all his excuses, because on June 18, 2003, Richard Murphy signed the Cease and Desist Affidavit, the normal way the Florida Bar treats offenders in cases like this. In her letter to Richard Murphy the Bar Counsel Ghunise L. Coaxum made it very clear that his previous conduct will not be tolerated in the future and he is ordered (quote): "to agree not to engage in any activities which constitute the unlicensed practice of law under existing decisions of the Supreme Court of Florida."
Remarkable was Murphy's statement at the end of his letter to the Bar counsel (quote): "I am enclosing a copy of the Release of Lien that was issued." No wonder this lien was released, because the defenseless homeowner had already paid the full amount of the lien, including the processing fee, under the threat of foreclosure!
The same excuses, blaming the homeowner, is obviously as well being used in a separate lawsuit, where the homeowner is asking for official association records, according to FS 720.303(4) . But Leland Management, Inc. and the board are willing to refuse this reasonable request at all cost. (In a nearly identical case in Jacksonville, a homeowners' association just spent more than $6000 in legal fees, only to pay the $500 penalty and surrender the requested records. This judgment came from a Small Claims Court -- and the homeowner was not represented by counsel.) Unlike in this case where the legal expenses of all parties are estimated at $40,000 to $50,000. Has the board of this association considered the financial risk they are exposing all homeowners to? Is it worth the risk of wasting these kind of funds just to prove to the homeowners WHO holds the power in this association? Is this what is called fiduciary duty?
But this isn't the end of this story, it's just the beginning. Research in the public records of the local courthouses have revealed that it was common practice by members of Leland Management to file liens and charge " Lien Processing Fees" in the amount of $125.
So far, many other filed liens have been discovered. And not only Richard Murphy was the guilty party. Many documents revealed that Rebecca Furlow was as well busy filing liens and thereby violating Florida laws. Public records list Rebecca Furlow as Director of Leland Management, Inc. and as well a director of the Community Associations Institute of Florida, Inc., the trade organization representing mainly the interests of association suppliers like management companies and specialized attorneys!
The research hasn't been finished yet,
but so far it has been discovered that these kind of illegal liens have
been filed against homeowners in these associations:
It is very obvious that further research will show that even more illegal liens have been filed by members of Leland Management. In the moment it is still debated what course of action shall be used in order to recover all the illegal fees collected. Most likely the next step could be to inform all the homeowners known who paid these irregular charges. It could very well end in a class-action lawsuit, considering the gravity of these violations.
A complaint against the management company will be filed with the DBPR to make sure that this will stop! CAMs who violate Florida laws should never be allowed to supervise homeowners' finances.
During the last legislative session, a bill was hotly debated to deregulate Community Association Managers. The bill finally died. But how helpless do our legislators want to leave Florida Homeowners and Condo-owners? Even when CAMs are regulated by the DBPR, all these problems still occur all over Florida.
Imagine what would happen if this DBPR supervision falls by the wayside?