Is America’s worst homeowners’ association in Miami? It’s starting to look that way

Opinion Courtesy of The Editorial Board of The Miami Herald

Published March 9, 2023


The allegations of gangster-style wrongdoing at one of Florida’s largest homeowners’ associations, the Hammocks Community Association in Miami’s West Kendall suburbs, already were the stuff of suburban nightmares.

Last year, HOA board members faced charges of racketeering, money laundering, fabricating evidence and using shell companies. Monthly maintenance fees had been jacked up 400% without any real explanation. Money seemed to be disappearing, but expenses weren’t documented. The board hadn’t met in public in more than four years, meeting in secret instead. Yet homeowners couldn’t get rid of the board: One attempt was thwarted by a fake bomb threat, and a recall effort got nowhere when the board, in an outrageous move, threw out two-thirds of the ballots.

It took the arrests of the former president, her husband and three others for participation in what prosecutors called a sophisticated “criminal enterprise” to bring into the open the insanity that Hammocks homeowners had been living with for years.

Miami-Dade Circuit Judge Beatrice Butchko, as reported by The Real Deal, called it “a terror situation.”

And now, in the latest court hearing on Tuesday, it seems the fraud was even worse than originally thought, somewhere in the range of $3.4 million, up from a previous $2 million estimate. That’s a whole lot of homeowners’ fees stolen or misappropriated. And it’s even more reason for a state or local crackdown on abusive HOAs.

Hammocks residents at a Justice for the Hammocks meeting, signing petitions to recall the HOA board of directors.

The scheme in the Hammocks, as the Miami Herald has reported, apparently revolved around payments to vendors for work that wasn’t done, with the money pocketed by board members or family members. The investigation had been going on for years, with the board refusing to cooperate. When investigators from the Miami-Dade State Attorney’s Office were finally able to gain access to the association’s clubhouse office last November — the association at one point refused to comply with a court order because “the board doesn’t trust the state” — they found a ton a documents, including one stash under the floor of the office, according to the Herald.

The president, Marglli Gallego, seems to be at the heart of this. She was first charged in 2021 on allegations she took nearly $60,000 from the association, spending some of it on a private investigator to spy on her neighborhood enemies. Members of the community have said that, for years, they felt as though they were fighting the “Gallego Mafia.”

But $60,000 looks like weak tea compared with the most recent allegations of a multimillion-dollar conspiracy.

The revelations haven’t ended, either. On Tuesday, court-appointed receiver David Gersten said board members had used 55 bank accounts and credit cards, something he called “exceedingly abnormal.” Prosecutors might call it something else: evidence of a crime.

The Hammocks HOA is supposed to help govern a vast community with 6,500 housing units and a population of about 18,000. But any size HOA can abuse its members. How many smaller HOAs are spending money in questionable or even criminal ways that we don’t know about?

Homeowners’ associations can be boons to their community, keeping the quality of life — and property values — high. That’s no small thing when, for most people, their homes are their biggest investment.

But the Hammocks is proof that, without oversight, HOAs can run wild. Board members can exploit their neighbors or even become criminal organizations. More oversight is clearly needed. Miami-Dade State Attorney Katherine Fernandez Rundle said in December that she is working on a plan to hold HOA leaders more accountable. She was scheduled to hold a news conference Friday to discuss a ”major effort” to change laws to provide new protections for HOA residents and condo owners. That will be welcome progress.

Whether it’s a state or local effort, it’s time to learn the hard lesson of the Hammocks HOA. And love thy neighbor, it ain’t.