BOYNTON BEACH — In what could become a precedent-setting lawsuit, builder G.L. Homes is suing the HOA of its very own community, Valencia Sound. The issue: whether or not the HOA is allowed to institute a policy that violates the policies put into place by the builder. If the HOA loses, it could prove costly for homeowners while affirming the right of a builder to implement rules that remain long after it relinquishes control of a community.

Filing the complaint under the name “Boynton Beach Associates XXVI,” which is a working name used by G.L. Homes for construction business and litigation purposes, the builder alleges that the Valencia Sound HOA instituted a mandatory “capital reserve” fee for all homes purchased from G.L. Homes after September 1, 2023. That’s the date that G.L. Homes “turned over” the HOA to those living in the community, and G.L. Homes no longer had a representative on the Board of Directors. Despite the turnover, G.L. Homes claims that the board was still required to seek — and obtain — permission before instituting any policy that involved fees for potential owners buying directly from the builder.

BocaNewsNow.com obtained the complaint. Here are a few highlights:

“On September 1, 2023, the Developer emailed the Association and objected for a second time regarding the Association’s wrongful attempt to impose the Working Capital Contribution on homeowners purchasing directly from the Developer. The Developer referenced the notice requirement imposed by the Article XIV, Section 8, Paragraph D of the Declaration. The Developer has never consented to the amendment to the Declaration to add the Working Capital Contribution.

The Association not only ignored the Developer’s objection to the proposed amendment to the Declaration to add the Working Capital Contribution, but the Association did not even attempt to obtain the Developer’s consent to the proposed amendment as required by Article XIV, Section 8, Paragraph D of the Declaration. Instead, and in violation of said Article XIV, Section 8, Paragraph D, the Association procéeded to pursue the approval of the amendment by the owners in Valencia Sound.

There is a bona fide, actual and present practical need for the Court’s determination of the respective rights and responsibilities of the parties, including: i) whether the Association had the authority to amend the Declaration to unilaterally add the Working Capital Contribution to the Declaration via the Third Amended Declaration without the Developer’s express written approval, and ii) whether the Association has the authority to charge such Working Capital Contribution when all other homeowners in Valencia Sound did not have to pay such Working Capital Contribution when purchasing their homes from Developer.

The relief sought from this Court is not merely the giving of legal advice. The Developer requests that this Court take jurisdiction of the matter and determine the rights and obligations of the parties. The Developer requests that this Court enter an order declaring the Association’s addition of the Working Capital Contribution to the Declaration via the Third Amended Declaration is null and void ab initio, as such action was taken without the Developer’s express written approval as required by the Declaration.”

While HOA’s routinely impose capital contribution fees for homes that are being resold in a South Florida community, it is rare — if unprecedented– for an HOA to attempt to tack on a fee to homes still being sold by the builder. A Palm Beach County Circuit Court judge will ultimately make a decision as to whether the HOA is permitted to add a fee, or not. It was not immediately clear if G.L. Homes will seek financial damages, however, the statutory minimum for filing in Palm Beach County Circuit Court is $50,000. Experts say if G.L. Homes lost sales as a result of the HOA’s policies, the HOA — and its members — could be required to reimburse the builder, plus pay damages and legal fees.

Valencia Sound is a senior living community on Lyons Road, just north of Atlantic Ave. in Boynton Beach.

CLICK HERE TO READ THE LAWSUIT