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'Their goal is to bleed owners dry.' $34 million victory in Florida HOA lawsuit is rare, experts say

Trevor Fraser, Orlando Sentinel on

Published in Business News

When Martin Kessler moved to the Solivita development in Poinciana, Florida in 2008, he says he quickly realized it was a big mistake. This was the first place the 97-year-old had ever lived with a homeowners association.

“Living in an HOA is not really a pleasant thing for a resident,” Kessler said. A retired economist, he said the fee he was required to pay was “a capitalist’s perfect dream of a business. People must join whether they like it or not, and they pay all the expenses of the business.”

Kessler is among more than 5,000 members of the 55-plus community locked in a class action lawsuit since 2017 against Solivita developer Avatar Properties, which they allege improperly collected HOA fees. On Nov. 2, Polk County, Florida, Circuit Judge Wayne Durden awarded the residents $34.8 million.

“That’s the biggest award I’ve ever heard of,” said Harvella Jones, president of the National Homeowners Advocate Group. Based in Texas, Jones’ organization specializes in helping people fight HOAs and lobbies for homeowner protections. “We get calls from all over the country, but no one has ever reported to us a win as large as (Solivita).”

Experts agree that fighting HOAs is hard for residents and big wins are even rarer. In Florida, HOAs govern more than 44% of the population, according to research by analysts at iProperty Management.

With fees that can reach into the thousands of dollars from an estimated 3.5 million homes in the state, HOAs can make lawsuits long and costly for residents.

 

“Their goal is to bleed owners dry,” said Jan Bergemann, president of Cyber Citizens for Justice, a homeowner’s advocacy group based in DeLand. “They will hit you with motion after motion, tie it up for years.”

HOAs are infamous for limiting what signs can go up yards, raising free speech issues. They sometimes even ban basketball goals or other sports equipment from yards or tell residents how many cars they can have. A Florida HOA was accused this month of threatening a family with a $100 a day fine for putting up Christmas lights too early.

Avatar, which was purchased by homebuilder Taylor Morrison in 2018, developed Solivita and other communities in Poinciana in the early 2000s. Avatar also built amenities such as pools and clubhouses. When the time came to turn management of the community over to the Poinciana Community Development District, Avatar wanted to sell them to the community for $73 million.

But there was a problem. A certified appraiser said the amenities were only worth about a quarter of that.

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