Article Courtesy of The
Orlando Sentinel
By Trevor Fraser
Published November 27, 2021
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When Martin Kessler moved from Winter Park to Solivita in Poinciana in 2008, he
says he quickly realized it was a big mistake. This was the first place the
97-year-old had ever lived with a homeowners association.
“Living in an HOA is not really a pleasant thing for a resident,” Kessler said.
A retired economist, he said the fee he was required to pay was “a capitalist’s
perfect dream of a business. People must join whether they like it or not, and
they pay all the expenses of the business.”
Kessler is among more than 5,000 members of the 55-plus community locked in a
class action lawsuit since 2017 against Solivita developer Avatar Properties,
which they allege improperly collected HOA fees. On Nov. 2, Polk County Circuit
Judge Wayne Durden awarded the residents $34.8 million.
“That’s the biggest award I’ve ever heard of,” said Harvella Jones, president of
the National Homeowners Advocate Group. Based in Texas, Jones’ organization
specializes in helping people fight HOAs and lobbies for homeowner protections.
“We get calls from all over the country, but no one has ever reported to us a
win as large as [Solivita].”
Experts agree that fighting HOAs is hard for residents and big wins are even
rarer. In Florida, HOAs govern more than 44% of the population, according to
research by analysts at iProperty Management. |
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Martin Kessler, is a 97-year-old resident of Solivita
and one of the 5,000 residents that won a rare class action lawsuit
against their HOA for $34 million and lives in Poinciana.
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With fees that can reach into the thousands of dollars from an estimated 3.5
million homes in the state, HOAs can make lawsuits long and costly for
residents.
“Their goal is to bleed owners dry,” said Jan Bergemann, president of Cyber
Citizens for Justice, a homeowner’s advocacy group based in DeLand. “They will
hit you with motion after motion, tie it up for years.”
HOAs are infamous for limiting what signs can go up yards, raising free speech
issues. They sometimes even ban basketball goals or other sports equipment from
yards or tell residents how many cars they can have. A Florida HOA was accused
this month of threatening a family with a $100 a day fine for putting up
Christmas lights too early.
Avatar, which was purchased by homebuilder Taylor Morrison in 2018, developed
Solivita and other communities in Poinciana in the early 2000s. Avatar also
built amenities such as pools and clubhouses. When the time came to turn
management of the community over to the Poinciana Community Development
District, Avatar wanted to sell them to the community for $73 million.
But there was a problem. A certified appraiser said the amenities were only
worth about a quarter of that.
“I was immediately against it. It was the most stupid thing in the world,”
Kessler said.
Avatar based its number on the future value of a roughly $86 a month club fee
they were charging, said attorney Carter Andersen of Bush Ross in Tampa, who
represented the residents. That fee, the lawsuit alleged, was illegal. Residents
couldn’t opt out of it and could even have their homes foreclosed upon for
nonpayment.
Taylor Morrison, who has handled the defense in this case since acquiring
Avatar, did not return requests for comment for this story.
Poinciana residents win $34.8 million in HOA lawsuit against developer
Andersen said the $34 million figure is only the beginning. He estimates another
$27 million in pre-judgment interest, and at least $4 million in fees collected
this year that were not added to the ruling.
There will also be, Andersen estimates, $5 million to $10 million in attorneys’
fees for the two firms that represented the residents. The case was taken on a
contingency with no retainer from the residents, which means it was a gamble for
the lawyers who fought for it.
Bergemann says it’s rare to find attorneys who will take such a complicated case
without some assurance of payment. “Unfortunately, wins [such as Solivita] would
be very common if the owners had the money,” he said.
Bergemann says he’s spoken to attorneys who want thousands of dollars just to
get building documents residents should be able to see anyway. “And who just has
that?” he said.
Jones said another problem residents face is harassment for speaking up, which
she says happens when residents don’t act together. “You can’t have one or two
people taking the brunt of everything,” she said.
For Jones, much of the problem is a lack of government oversight. She says many
HOA board members cling to their power.
“Even when we have rules about elections, they still won’t hold [to] them,” she
said. “If you can’t get rid of them, that’s the main problem.”
Jones got started fighting a homeowners association in the 1990s when she lost
her Texas home for nonpayment of HOA fees. “They take advantage of foreclosures,
which is why they should be regulated,” she said.
Although Andersen says the Solivita case is likely to be appealed by the
developer, Bergemann said wins such as Solivita’s are important because they can
create a domino effect leading to more victories for homeowners around the
state.
“Homeowners have rights but they often aren’t being enforced,” he said. “[HOAs]
don’t want decisions coming down for homeowners.”
The win gives hope to people such as Slade Chelbian, a resident of the Bellalago
community in Poinciana, also built by Avatar.
Chelbian has been a plaintiff in a class-action suit for the same activity that
led to the Solivita suit since 2019.
“This was great news in the fight to stop this sort of action,” Chelbian wrote
in an email. “This makes me believe we can win this action in court.”
For Chelbian, winning would mean an end to the fee he’s been challenging.
“Defeat is the status quo,” which he said is, “paying the developer a mandatory
‘for profit’ fee forever. That is not fair.”
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