December 7, 2015
Gentleman,
I am
writing to you today, as an attorney who represents
both homeowners’ associations and homeowners who are
being victimized by their associations. The HOA
Reform bill is critical at this point and comes at a
time when the president of the Florida Bar, Mr.
Ramón Abadin, has pointed out, in the November issue
of the Florida Bar Journal, the need for a new
business model because the working class cannot
afford an attorney and do not qualify for legal
aid. I see this injustice every day in my practice
as I have to tell clients the high legal fees and
costs they would incur to hire me to protect them
from being another HOA victim. These cases are not
the type that are done on a contingency because
rarely has someone been physically injured. I
turned down at least one case a day, sometimes as
many as five. Yesterday it was three. Most firms
won’t represent the homeowners because the
associations are a “cash cow.”
The
homeowners’ associations are unregulated and the
condominium associations have limited regulation
with the Dept. of Business and Professional
Regulation (“DBPR”) not having jurisdiction over
assessments, which is the biggest source of abuse
for homeowners. Even the appellate courts, in a
case called Ocean Two Condo. v Kliger, where
the Court stated “Because of the statutory lien
rights and the power to prosecute the foreclosure
action, an association and its attorneys have ample
leverage, and the unit owners have very little.
Every telephone call, meeting, or hearing regarding
the genesis of the dispute and the amount due
produces an incremental unit of attorney billings,
and every day until resolution of the dispute
increases the interest tariff.”
In my
practice I have witnesses law firms that have
paralegals do all the work, yet the homeowners are
billed attorneys’ fees, not paralegal fees. I have
witnessed a law firm give sales pitches to
associations during hiring interviews and state that
“95% of the homeowners can’t afford to sue you and
the 5% that can will soon learn that money can be
used for a vacation, their children’s college, or
retirement and will give up.” Unfortunately, this
is true. I have seen a law firm give homeowners a
letter stating they could not call or come to their
office to resolve their assessment delinquency, but
could fax their credit card or email and then are
given the email address of a former staff member.
Once I got involved the charges ballooned from $795
to over $3,600 with the attorney telling me he had
to read all those emails the owner sent trying to
get a response. This is outrageous and had I not
gotten involved he would have forced the homeowner
to pay those ridiculous legal fees.
The
industry not only needs more regulation, but more
affordable legal representation. Let’s give DBPR
jurisdiction to arbitrate assessment disputes. This
is the biggest source of abuse. Arbitration is less
expensive for the homeowner and the threat of
arbitration might help tamper the abuse.
Regulation of the homeowners’ associations is needed
to help curtail the abuse of out of control board
members.
Right
now there is a rise in homeowners’ associations
setting up their own corporations to perform work
normally performed by vendors. This results in the
board of directors putting their family members on
the board of these corporations as paid directors,
if not themselves in some cases; the board members
receiving free services, the members being denied
access to see accounting records of these
corporations even though their assessments paid to
set up this corporation and bought any equipment,
furniture or other assets. Several times I have
witnesses where these corporations are either owned
or operated by a board member or have contracts with
a board member. Some associations set up these
companies to operate a receivership or rental
program to take control of homes in foreclosure,
which is needed, but instead funnel the rental
income to themselves or the corporation without the
association getting a dime.
There
is also a rise in the community association
management firms setting up their own corporations
to perform work normally performed by vendors.
These corporations are then paid top dollar and paid
promptly with no one given a chance to dispute an
invoice.
There
is a rise in the number of cases in which deed
restrictions have expired under the Marketable
Record Title Act but the HOAs continue to operate as
mandatory associations and threaten to foreclose on
owners who refuse to pay because they know the
chances of the owner affording an attorney are slim.
I have
witnessed board members targeting homeowners they do
not like. This targeting sometimes includes
criminal activity, which is hard to prove. Any
witnesses refuse to get involved because they know
they will be targeted.
The
Village Condominium Association in Orlando was taken
over by a board member who slowly was able to get
rid of anyone who did not agree with him and then
proceeded to give himself the management contract,
the security contract (with armed security despite
not having the proper licenses), and the maintenance
contract. This board member marked all the board
members’ assessments as paid each month despite no
payment. He was able to take approximately $40,000
a month from the association (which we documented),
depleted the reserves and diverted money from
insurance claims to his own pocket. A receiver was
eventually appointed to take over and the board
removed.
I could
write a book on the atrocities committed against
homeowners, including cars being set fire, fake
bombs on lawns, handicapped owners in wheelchairs
being refused to attend meetings and harassed,
racial discrimination, sex discrimination,
discrimination against veterans. I have witnessed
homeowners being evicted from their homes for past
due assessments when their home was in a trust and
the association demands the rent be paid to them
from the “tenant.” And let’s not forget the
Higgins v. Timber Springs case in which Mr.
Higgins was foreclosed upon while on active duty in
the military. Our firm was able to get the
foreclosure reversed. We took the case pro bono,
one of the few we could afford to handle as a small
firm, because Mr. Higgins could not afford an
attorney and was trying to deal with this situation
while deployed.
The sad
part is when I have to give these homeowners a quote
of the fees to litigate they decide it’s easier to
sell their home and move, sometimes to another
state.
I
apologize this email is so long, because I know your
time is valuable, but I appreciate the efforts each
of you are making in trying to protect the rights of
our citizens. So many of them lose their homes, not
because they can’t afford them, but because they
upset their HOA, became a victim, and cannot afford
an attorney. Thank you!
Respectfully submitted,
Barbara Billiot Stage, Esq.
Orlando,
Florida 32835
Tel: (321) 299-9412
Fax: (321) 445-9857 |