HOAtalk.com discussion

Recently I engaged in a discussion on HOAtalk.com about "homeowners associations" and how to solve the problems they have when an entrenched board goes too far in throwing its weight around.

There were a lot of creative suggestions on how to solve that problem - increased mediation, a legal defense fund to fund the defense of homeowners being railroaded by a board, specialized courts knowledgeable in HOA law, etc.

I think I was alone in saying that the flaws of the HOA system run so deep that reform is not possible and that, instead, the HOA system needs to be scrapped and replaced.

Many of the commentators were current or past board members and, unanimously, they considered scrapping and replacing the HOA system unrealistic.

But to remind everyone, there was a time in this country when we had very, very few (less than 500) HOA's in the whole nation (now there are over 360,000).   And the nation got along perfectly fine without HOA's for over 180 years.  

I think it's going to take the courts saying that the basis of the HOA's power (the declaration of covenants and restrictions as a "contract") is just a modern day version of the Emperor's New Clothes.   The declaration is not a a "contract" between the homeowners.  They did not sit down and negotiate its terms.  The declaration is a vestigial organ left to the homeowners by the developer.  It was drafted solely by the developer, without any negotiations with the homeowners, and solely to benefit the developer.

Once courts realize and hold that the declaration as a "contract" is just a legal fiction, then the HOA system will start to unravel and a replacement institution will be found.


Recently, I was contacted by a homeowner in the process of selling her home.   At closing, she found out that what appeared of record to be a $300 lien for unpaid HOA dues would cost her $6,300 to satisfy, in order to close the sale of her home.   That was because the $300 lien filed against her home contained language that also secured the HOA's attorney fees and costs of collection, which the HOA's attorney was claiming amounted to $6,000.

I tried to find a way around having to pay the $6,300 in order to close the sale of home, but was unsuccessful.   Under Florida law, there is a process for posting a bond for almost every other kind of lien, in order to free up your property.   For example, if a car mechanic claims you owe him an exorbitant amount for rotating your tires and won't let you have your car without paying him what he claims he owes, Florida Statutes provide a mechanism for filing a bond with the clerk of the court in order to get your car back.   The same applies if a contractor or repairman places a lien against your home.

But, there is no such protection for a homeowner against an HOA or its attorney claiming a lien against your home for exorbitant attorney's fees.  Under current Florida law, if you want to close the sale of your home, you have to pay the (bloodsucking) HOA attorney whatever he (or she) is asking.

This is madness and the Legislature needs to deal with it.

Right now, HOA attorneys and collection agencies are engaging in what (in my opinion) amounts to nothing more than legalized theft.   They charge fees for work never done and hold your home hostage to make sure they get paid.

In a recent lawsuit, I obtained copies of collection letters an HOA attorney mailed to homeowners delinquent on their dues.   I looked at thirteen letters sent out the same day to thirteen different homeowners.  The letters were exactly the same, except as to whom they were addressed and the address where it was sent.  They all demanded $75 in dues + $350 in attorney's fees.   All the letters were signed with the exact same attorney's signature on each of the 13 letters (Can anybody say "autopen?").

I will guarantee you that no attorney ever saw, much less signed, those letters.  I will also guarantee you that a paralegal or a secretary plugged in the individual names and address into his or her computer and the computer spit out 13 nearly identical letters and envelopes and that no attorney saw (much less signed) any of those letters before they went out.

And if all 13 of those homeowners dutifully paid their $75 in dues and $350 in attorney's fees to prevent that $350 in fees from becoming $3,500 in fees, then the attorney whose fake signature was on each of those letters just made $4,550 for zero hours worth of work.

Again, the Legislature needs to reign in this abuse of homeowners by HOA's and their unscrupulous attorneys.  The Legislature needs to put a cap on the attorney's fees HOA attorneys can charge homeowners.

There's a famous case in Florida about a homeowner who parked his work truck in his driveway.   The HOA fined him $200 for doing so.  He refused to pay the fine.  The long and the short of it is that his home eventually was foreclosed upon by the HOA to recover the $200 fine + $20,000 in attorney's fees.   Madness.  Pure Madness.