Why Do We Let HOAs Bleed Homeowners Dry?

Article Courtesy of  The Florida Political Review


Published April 7, 2022


Across Florida, many people live in homeowners associations of varying quality and scale. While some may individually cite positive relations, looking online will lead one to see that for many the situation is less than happy. It is difficult to determine the exact number of HOAs in Florida, with estimates ranging from 47,900 to 48,500.

Property associations exist nationwide in many forms. They may manage a pool or cut the community grass. This is paid for by an HOA fee that ranges from as little as $21 a month in some communities to nearly $415 a month for some South Florida residents.

An HOA may coexist with a municipal government or exist within an unincorporated community. To live within the boundaries of one, you must be a fees-paying member and follow the rules set by the HOA.

As an association of property owners, almost all have a board elected by homeowners to make decisions on their behalf. In most large HOAs, functional day-to-day operations are controlled by entirely private HOA management companies.

There are few checks on what a large HOA can do since all but the most active homeowners will go to meetings or vote. Since voting is based on owned land, large development companies often have several votes based on parcels they own.

While Florida law prohibits HOAs from being for-profit, there appears to be no such prohibition on management companies that act as a middle man in most interactions for owners.

FirstService Residential, one of the largest management companies in Florida, claims to serve 1,550 HOAs in three South Florida counties alone as of January 2022. They also manage the Association of Poinciana Villages, one of the larger HOA communities in Florida.

Poinciana has been a hotbed of disputes and lawsuits between residents, private companies and HOAs. A lawsuit that concluded in 2021 regarding overcharged HOA fees against AV Homes brought attention to the senior-only Poinciana community of Solivita, with about $35 million awarded to affected residents.

The president of Cyber Citizens for Justice, a homeowner’s advocacy group, Jan Bergmann said of HOAs: “their goal is to bleed owners dry.”

HOAs can use the money gathered from HOA fees to lengthen legal disputes. In essence, HOAs can potentially raise money through a combination of fees and arbitrary fines to build up a reserve. This works to wear out those suing them.

While it is understandable that HOAs need an enforcement mechanism, these fines can hit low-income residents harder than others. At a time when many are financially unstable resulting from the pandemic, we should have higher priorities than investigating people for having too many dogs or threatening fines over the color of a swing set.

Also in 2021, Poinciana residents decried a now-implemented bulk contract wherein all residents would be required to use Spectrum internet and cable TV services. Bulk negotiation is another power of HOAs; residents pay Spectrum through the HOA. This led to regular people arising to push back against the efforts.

Elaine Sharnowski, a homeowner in Village 9, was one of the several in Poinciana. She has no background in community organization but this deal, seen by some as a unilateral decision by the APV, spurred her to action. She read up on HOA laws in Florida and the specifics of the deal, a laborious process given how many HOA laws are in Florida.

In an interview with Florida Political Review, Sharnowski shared her recognition that some who already have Spectrum can benefit. However, she also keenly noted: “For those in our community that don’t have these services, this is a huge monthly increase.” Another Poinciana organizer shared similar perspectives and had concerns for older residents who would have to pay fees for technologies they may not use.

Sharnowski and other organizers against this deal noted how it would also lock residents into using older internet technologies for seven years. Among many other concerns here was how much of the negotiations occurred while many were on lockdown in Florida and thus had limited mobility to share their voice.

What can be done?

Rep. Kristen Arrington, D-Kissimmee, along with Sen. Victor Torres, D-Kissimmee, filed a pair of bills that would curtail the ability of HOAs to fine their residents. Poinciana is in both of their districts.

HB 6103 and its companion SB 1364, would greatly amend Florida Statutes Chapter 720 that governs HOAs; they would remove language allowing HOAs to fine residents for breaches of HOA rules.

A related pair of bills are HB 1039 and SB 1362, which would prohibit HOAs from putting fines as property liens. If fees were immensely high, having a lien against a property could allow an HOA to seize that property as collateral.

All four bills died in their committee assignments.

In a recent interview with Florida Political Review, Arrington explained how reigning in overzealous HOAs was a “bipartisan issue” that has long existed in Florida that “we all know needs to be addressed.” She shared one story of a resident who was fined $1,000 for not having pressure-washed their driveway.

Arrington is encouraged that HOA stakeholders hope to assuage concerns locally rather than have “[lawmakers] change legislation across the state.” There is a concern, as with all legislation, of unintended consequences.

At the end of the legislative session, Arrington intends to meet with relevant parties in Poinciana to work through local concerns. She knows reform is inevitable but concedes that any major initiative like reigning in HOAs will take time.

If reelected, the representative hopes to work with HOAs to refine this legislation so that minor fineable offenses cannot be applied to a lien. Her ideal is an HOA of mutual trust between residents and the HOA, mediated through a dedicated state agency.

A story similar to the events of Solivita occurred in the Hammock community in Kendall. The HOA there raised fees by 300% to 400%. Residents have filed at least 15 complaints with the state regulatory agency tasked with resolving such disputes.

To give citizens such as those in the Hammocks community a greater voice on their behalf in the state government, Arrington pointed to an initiative by her conservative colleagues that met greater success in the GOP-controlled chambers.

Rep. Mike Beltran, R-Valrico, in conjunction with an initiative by Sen. Danny Burgess, R-Zephyrhills, pushed a bill that would create an HOA ombudsman’s office. The bill, HB 1033, has already been seen by committees, though remained unseen by the full House or Senate before they adjourned.

Hopes remain that some sessions in the future can curtail HOAs. They are more unaccountable the larger they are. Even though Arrington’s and Beltran’s measures failed legislatively, such measures must be revisited. A failure by Florida to more closely curtail HOAs risks allowing HOAs to bleed owners dry.