By Eric Glazer, Esq.

Published April 15, 2013

As we all know by now, our Senate Bill 580 tries to stop the scenario where HOA developers maintain control of the Board of Directors for years, if not decades after they rightfully should.  There are countless horror stories throughout our state where owners simply cannot get their voices heard or opinions counted in communities that are almost entirely occupied by their home buyers, or where the developer has virtually abandoned the community.  It's the developer's voice that only gets heard.  It's the developer's decisions that are put into effect and it's the developer's show to run.  Period.

So what's asked for in our bill this year? 

In addition to what the statute already allowed, homeowner's would be now allowed to elect a majority of the Board members:

(c) Two years after the developer has ceased construction or ceased to offer parcels for sale in the ordinary course of business;

(d) Upon the developer abandoning or deserting its responsibility to maintain and complete the advertised amenities or infrastructure. There is a rebuttable presumption that the developer has abandoned and deserted the property if the developer has not engaged in construction or sale of properties or has unpaid assessments or guaranteed amounts under s. 720.308 for a period of more than 2 years;

(e) Upon the developer filing a petition seeking protection under chapter 7 of the federal Bankruptcy Code;

(f) Upon the developer losing title to the property through a foreclosure, or the transfer of a deed in lieu of foreclosure, unless the successor owner has accepted an assignment of developer rights and responsibilities; or

(g) Upon a receiver for the developer being appointed by a circuit court and not being discharged within 30 days after such appointment, unless the court determines within 30 days after such appointment that transfer of control would be detrimental to the association or its members.

In addition, the bill requires that members other than the developer are entitled to elect at least one member of the board of directors of the homeowners’ association if 15 percent of the parcels in all phases of the community which will ultimately be operated by the association have been conveyed to members.

Finally, the bill requires that members other than the developer are entitled to elect at least two members of the board of directors of the homeowners’ association if 50 percent of the parcels in all phases of the community which will ultimately be operated by the association have been conveyed to members.

Is there anything even remotely objectionable about any of these new provisions?  Shouldn't the owners be allowed to elect a majority of the Board if any of the above occurs?  Isn't it fair and rational?  Everyone seems to thinks so.  Except the developers that is.

Let me be remarkably clear about something.  Last year the developers of homeowner associations in Florida hit the Florida Powerball and Lotto combined when The Florida Legislature gave them the biggest break of all time and passed a law that said developers don't give warranties to homeowner associations for the communities they build.  This is despite the fact that an appellate court said they did.  If the streets flood, the electric doesn't function, your clubhouse collapses and your driveway caves in the day after you close on your new home purchase, you're on your own and the developer has no liability to fix any of it.

You would think with that kind of break, the developer lobby would simply be humble and not even show their face in Tallahassee this year before The Florida Legislature realizes what it did and quickly repeals what may be the worst law ever if you’re a homeowner in Florida .

But the developer lobby has no shame and obviously no fear of The Florida Legislature.  They won't even agree to allow you to govern the communities that they  abandoned, have lost to foreclosure, receivership or bankruptcy.  They want to control the purse strings of the community until the last blade of grass is sold to the last buyer. 

Our bill also requires HOA's to now simply give their name, address, budget and total number of parcels to the DBPR each year.  The developer's response:  wait a minute, what's the rush, why this need for regulation and expansion of government? 

By law, a developer of a condominium must get approval of the governing documents by the DBPR, and pay a fee.  HOA developers don't even want to provide the name of the community they are building.  They want to simply be off the state's radar, build communities without any laws overseeing same, provide no warranties and provide no representation on the board to the owners who live in the HOA communities.

If there ever was a time to pick up the phone and call your legislators, e-mail them or write them letters urging them to support a bill, this is the time and SB 580 is the bill.   Unless you think the developers make sense.