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Lawsuits, Drama, and political controversy surrounding Palm Beach, FL condominium association

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guest blog by Deborah Goonan

Here’s a condo story in Florida that might some day make the basis for a great TV movie script. It’s so bizarre. I can’t make this stuff up.

It involves Whitehall Condominium of the Villages, West Palm Beach, Florida.

First, I watched the WPBF news report of condo-owners breaking and entering the condo office to seize records, checks, and computer hard drives. It just so happens one of the homeowners involved was Katherine Waldron, a candidate for Palm Beach Commission.

Predictably, dirty politics is using this information to campaign against Waldron, and in favor of her competitor.

Waldron explains that in October 2014, FL Division of Professional and Business Regulation (DBPR) had authorized the removal of Condo President Vincent Rossi, and therefore the owners were justified in taking control of the Board and securing their assets and records.

Another video report from WPTV sheds additional light on the story. After a recent audit, owner Cary Collins and others became concerned about discrepancies in the financial records. There seemed to be money missing! Enter Vincent Rossi, former condo Board President. He admits to WPTV that he withdrew money from Association accounts to gamble in various casinos, but claims it was “his” money after all. Something to do with Rossi guaranteeing a past due water utility bill, he claims.

Whitehall owners have filed many other complaints with DBPR officials. But when the state fined the Association $5000, Whitehall Condo Association, led by Rossi, fought back unsuccessfully, at a cost of $130,000 to condo owners. Oh, and by the way, although he is no longer on the Board, Rossi is currently employed as the maintenance manager at Whitehall to the tune of $52,000 annually.

The owners have sued the Whitehall Condo Association and Mr. Rossi. The Association is now suing the owners for damages related to the break in.  WPTV reports an ongoing police investigation, which could result in criminal charges. Your tax dollars at work, Floridians, even if you are fortunate enough not to live in Whitehall or any other condo or HOA in the state.

It’s too early to tell how this battle will turn out, and we may never know the whole story if there is yet another round of out-of-court settlements with gag orders.

References:

(video of Palm Beach Commission candidate breaking into condo office)

(link to article about Palm Beach Commission race, Whitehall Condo)

(link to video interviews with upset condo owner, former condo president accused of wrongdoing)

(links to public record of court cases filed:)

(link to another court case)

Owner wants to know how to get rid of HOA

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guest blog by Deborah Goonan

An owner in Parkview HOA in Brownsville, TX was recently interviewed by KRGV television. He explains that several years ago their HOA “fizzled out” but then a new management company suddenly appeared on the scene, looking to collect assessments. But the HOA has a $46,000 deficit, and many owners are not paying their dues or paying attention to the HOA, despite collection letters tacking on a $250 attorney fee for delinquent account owners.

So what’s the story here? That’s a bit of a mystery. A quick Google search turns up minimal information on Parkview Homeowners Association LLC – address, phone number, and management agent. Attorney Bill Davis was consulted by KGRV, and, according to him, the first step is to locate the original HOA governing documents, and determine whether the HOA currently attempting to collect assessments is the Original HOA vs. a newly formed corporation masquerading as the once-defunct HOA. Got that?

The story leaves out many details, and calls to mind several questions. Was there a vote of owners to revive this inactive HOA? How long was it inactive? Were assessments being collected before the new management company started sending invoices? How many homes are involved, and what are the dues?

There are specific legal processes for dissolution, as well as reviving inactive HOAs, depending on state law. Looks like the homeowner, Mr. Jack Jew, will have to consult an attorney, and get together with his neighbors to see if they can rid themselves of the HOA that he claims most owners do NOT want.

Ironically, as demonstrated in Florida, a group of Bulk Buyers (investors) can quickly gain control of a Board, and then vote to dissolve the Association.  But ordinary owners of one measly home apiece have to play detective and jump through numerous legal hoops just to get rid of the HOA albatross, if possible.

Does that seem fair to you?

(link to story in Brownsville, TX)

Worst Neighbor Nomination: How about the one who shoots, kills your family dog?

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guest blog by Deborah Goonan

On New Year’s Eve in Wedgefield, a deed-restricted, golf and equestrian community in Central Florida, someone shot and killed the Evans family’s yellow lab.

The family’s beloved pet escaped from its yard, as pets sometimes do, and apparently wandered onto a neighbor’s property. The neighbor allegedly confronted the owner of the dog, Brock Evans, and threatened to shoot his pet. When Evans quickly went to retrieve his dog, and talked to his neighbor for about ten minutes, he heard several gunshots. Shortly thereafter his dog was found with gunshot wounds, and later died as a result of those injuries. The neighbor denies shooting the dog, but does not deny that his son might have pulled the trigger. Orange County is investigating the matter as a case of cruelty to animals.

Under Florida Statute, the perpetrator, if properly identified and if guilt can be proven, may be charged with a misdemeanor or fined up to $5000 or both. However, if your dog is deemed as “dangerous” or if your neighbor claims that your dog attacked a person, pet or livestock on his property, this often suffices as a defense for shooting your dog.

Before the unfortunate incident, Evans had never spoken to his neighbor, who lives just two doors down the road. Wedgefield is a deed-restricted community with voluntary HOA membership.

Orlando Sentinel link to story of family pet shot by neighbor

http://www.orlandosentinel.com/news/breaking-news/os-yellow-lab-dog-shot-20150107-story.html

Opposing Views report on Orange County neighbor dispute over shooting of pet dog

http://www.opposingviews.com/i/society/animal-rights/orange-county-florida-family-accuses-neighbor-shooting-their-dog

Wedgefield HOA

http://www.wedgefieldhomeowners.com/faqs.html

Legal references:

FL Statute 828.12

https://asci.uvm.edu/equine/law/cruelty/fl_cruel.htm

FL Statute 775.082

http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0775/Sections/0775.082.html

FL Statute 767

http://www.flsenate.gov/Laws/Statutes/2011/Chapter767

When Killing a Dog is Legally Justified

http://www.nolo.com/legal-encyclopedia/free-books/dog-book/chapter9-2.html

Shake-Up in Holly Lake HOA in Florida‏

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guest blog by Deborah Goonan

Bob Norman of Channel 10 has taken on yet another rogue HOA in Florida.

One of the oddities of some HOAs in Florida is that the Board of Directors retains the authority to screen and reject buyers and tenants. But what are the criteria used to arrive at those decisions?

The “HOA screening” issue has been a contentious one in Florida, as many would-be buyers or tenants have sued or filed formal complaints of discrimination.

For example, last year, one Venice HOA enacted restrictions for unmarried couples seeking to buy or lease a home! The Board claimed the July 2013 amendment was an erroneous oversight, but has never offered a reasonable explanation of how or why the single-people-or-married-couples-only restriction was approved. The media picked up on the outrageous restriction, and that prompted the HOA to amend its declarations to eliminate the discriminatory restriction.

Holly Lake HOA, located near the Everglades in South Florida, is the latest site of buyer-tenant review controversy. But this one involves a Board member apparently profiting from his position. It seems that Board Treasurer Paul Morales has been approving plenty of applications to purchase (or lease) units, but nearly all of those buyers have been family members and business affiliates. Meanwhile, it has been alleged that other buyers or tenants lacking direct ties to Morales have been rejected without satisfactory explanation.

Bob Norman’s review of public records seems to support those claims. Check out the video report. HOA members are calling for a criminal investigation, and have put pressure on Morales and colleague Ed Patton (President of the Board), prompting both men to choose not to run for reelection for the Board. Coincidence?

Another bit of irony: Florida Statute stipulates that convicted felons cannot serve on the Board; however, it does not require background checks for Board candidates. Yet Florida Statute fully allows Board to screen and background check their tenants and buyers! Talk about a double standard. Guess what? It just so happens that Morales faced federal charges in 2000, involving a past real estate deal – charges that were mysteriously dropped.

As usual, requests for access to financial records have been ignored, and one owner has been harassed for daring to ask questions. Also predictable, although the conflict of interest seems obvious to anyone with two active brain cells, there has not been any determination of illegality.

Link to Channel 10, Bob Norman, Holly Lake HOA story

link to Herald Tribune, Casa di Amici COA story on amendments to restrictions

When it comes to collection of HOA liens, it’s all about the money!

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guest blog by Deborah Goonan

The latest controversy in HOA Land: in Nevada – and by extension 21 other states with similar legal status – the HOA super priority lien can now extinguish an outstanding mortgage backed by the Federal Housing Finance Agency (FHFA).

It’s ironic, because when CAI was founded back in 1973, it was with cooperation from FHA. Their agreement to back mortgages in common interest developments was the glue that held disparate CAI interests together.

But after years of mortgage deregulation, followed by out-of-control real estate price increases, and the ensuing mortgage default crisis, things have certainly changed.

Now it’s very difficult to obtain mortgage financing for condos, and not that easy for detached single family homes either. In the 22 states that have enacted priority lien status for HOA assessment liens, mortgage financing just became a great deal more difficult to obtain.

In early December, CAI boasted about its Nevada Supreme Court victory, where the court ruled that the FHFA backed-mortgage lien is extinguished following the HOA’s non-judicial foreclosure to collect unpaid assessments.

But a few weeks later, FHFA has fired back, vowing to fight in court to invalidate HOA foreclosures that wipe out taxpayer-financed guaranteed mortgages.

CAI claims that FHFA is “bailing out mortgage servicers” and vows to fight for the rights of HOAs to maintain super priority lien status.  CAI’s statement presents the usual argument that the owners that can afford to pay assessments have to cover the costs for owners who cannot or will not pay.

But at issue for FHFA is the fact that HOA foreclosures can now wipe out entire mortgage interests, at dollar amounts that far exceed state super-priority lien allowances of 6, 9, or 12 months unpaid assessments.

The super-priority lien, CAI argues, is a means to motivate mortgage servicers to either speed up the foreclosure process or pay the HOA’s lien prior to or at its assessment foreclosure sale.

It is interesting to note that the Nevada Supreme Court was split 4-3 on whether a judicial foreclosure is necessary in an attempt to wipe out the mortgage lien, citing due process rights to redemption for owners and mortgage lien holders.

It seems clear that FHFA will not sit idly by, allowing HOAs to beat them to foreclosure and wipe out mortgage interests. FHFA has filed action in Nevada Federal court because, in its own words, it “has an obligation to protect Fannie Mae’s and Freddie Mac’s rights, and will aggressively do so by bringing actions to void foreclosures that purport to extinguish Enterprise property interests in a manner that contravenes federal law.”

Will FHFA challenges lead to statutory mandate of judicial (vs. non-judicial) foreclosure of HOA liens? Will increased legal costs and lending risks lead to higher costs for borrowers, including escrow of 6 – 12 months assessment fees?  Or will FHFA push for elimination of HOA super priority lien status? These are interesting times.

Given the history of more than a few HOA attorneys to abuse the foreclosure process in order to evict owners and acquire homes with high equity (little to no mortgage balance owed) at the HOA’s auction sale, the recent NV Supreme Court decision is unsettling, to say the least.  If first mortgages can be wiped out following HOA foreclosure, doesn’t that create additional moral hazards?

CAI-HOA corporate interests will duke it out in court with FHFA. And while HOA homeowners may “win” the relatively small battle for collecting a portion of unpaid assessments upon mortgage foreclosure, they will probably lose the war for preserving property values, if homes are allowed to sell at HOA auctions for pennies on the dollar, or if FHFA pulls the plug on favorable financing terms.

CAI press release – Win on Priority Lien Case in NV

Statement from FHFA on Super-Priority Liens

CAI press release – FHFA Move Threatens Homeowners and their Communities

SFR vs. US Bank, NV Supreme Court Decision