Florida court weighs using gated-community access to collect HOA debt

Article Courtesy of The Orlando Sentinel

By Mary Shanklin

Published March 9, 2013

Alaqua homeowner David Acosta, who is not a lawyer, is winning a legal battle against his Seminole County homeowners association after it limited his main-gate access because of unpaid HOA dues.

A standoff of sorts has occurred at the gates of one of the region's most prestigious country clubs.

Alaqua resident David Acosta owes as much as $100,000, possibly a record for the Orlando area, in homeowner-association fees. The exclusive Seminole County community has responded by trying to limit others' access to his home and by forcing Acosta to stop and get permission each time before passing through the subdivision's entrance gate.

The fight over those pending restrictions has gone to court, where Acosta has been representing himself against lawyers for the association. So far, he is winning, though another decision is expected out of state Circuit Court in Sanford any day.

"The real message this should send is that HOAs have neither the legal authority nor the moral authority to oppress their residents," said Acosta, 51, who sought and won court approval to pay his association fees into a court registry until the case is resolved.

Battles between community associations and delinquent homeowners have been playing out across the region in recent years, as investors and residents fall behind or skip out on their community fees following sharp downturns in the housing market. Association fees finance the upkeep of an estimated 60,000 subdivisions throughout Florida.

Alaqua says it won't allow guests of delinquent homeowners to enter the community, and such homeowners must use the visitor lane each time they enter and stop to get a security guard's permission before proceeding. (Other residents' vehicles have transponders that grant them direct access through an automated entry lane.)

Acosta argues that, when people purchase homes within association-operated communities, they are granted full access rights that the association cannot strip from them later.

Gate restrictions are a debt-collection tool advocated by Winter Garden lawyer James Gustino, who represents not only Alaqua's homeowner association but also those for Stoneybrook East, Stoneybrook West and Lake Butler Sound. The gate-access question pending before Circuit Judge Marlene Alva in Acosta's case could determine whether such communities can restrict homeowners' use of common areas.

"Anyone who is a full-time member of the family can get access, but not guests," Gustino said recently. "It's not that draconian in that sense. When you enter into a purchase contract, subject to covenants, conditions and deed restrictions, you enter into a contract with everyone else in the community, and their fortunes are impacted based on whether you comply."

Alaqua's legal bills in the Acosta case now stand at more than $30,000, said developer John Ritenour, who has two home lots remaining in Alaqua and controls the association. Only four of Alaqua's 200 association members are delinquent, he said, affording the community money for parties and reserves for road repairs. Access restrictions are a small sacrifice, Ritenour added, considering Acosta owes an estimated $100,000 in fees, interest, fines and legal expenses.

Acosta was unable to say exactly how much he owed but said it was far less than the six-figure total cited by Ritenour. At one point during the standoff, Alaqua was charging Acosta interest rates that exceeded the maximum 18 percent allowed by the state. Association board members said the usurious rates were a mistake on the part of the community's management company and were quickly corrected.

Ritenour said the association has tried repeatedly to waive Acosta's accumulated interest and settle with him, but the former marketing representative, who now helps lawyers frame foreclosure-defense strategies, has refused.

"All we want at the end of the day is the fees," Ritenour said recently. "What we don't want at the end of the day is more attorney fees."

Acosta said he has tried 10 times to negotiate down his association debt but that Gustino wanted him to pay the entire tab. The homeowner said the issue would have been resolved if Gustino had been willing to consider installment payments.

"I asked them if they could work with me on the interest and do a payment plan," Acosta said. "They wouldn't work with me, and I tried 10 times. … I don't believe John Ritenour is a bad person, but he's getting bad advice."

Ritenour said Acosta is "very good at what he does" and acknowledged that Gustino can be "very aggressive." But the gate restrictions are not nearly as intrusive as the tactics a real debt collector would take, he added.

Another Alaqua resident, Denise Hazelett, said Gustino was unwilling to work with her at one point on an unpaid association debt of $9,000 — plus an additional $16,000 for legal expenses and interest.

"Gustino was strong-arming us in the whole thing. Paying the entire amount was something that was not remotely feasible for us," said Hazelett, whose family suffered financially as a result of the real-estate downturn. "We're not trying to be slackers or deadbeats. We are not fighting the HOA. We want to help and do our part."

She said that, after the 2011 death of her brother-in-law, she was planning to host some relatives at her house, but the association wasn't going to allow them to drive into the community. After some neighbors intervened on her behalf, the association relented and opened its gates to Hazelett's guests temporarily.

Ultimately, she began working with a member of Alaqua's resident advisory board, Joseph Muehl, on a payment schedule and has been making payments. Muehl, an Alaqua homeowner and advisory-board volunteer, said that, if a resident is in trouble and presents the association with a plan to pay a debt, "we'll work with them."