A Tale of Two HOAs...

Let me tell you a story about a neighborhood in Florida that was built in the late 1970s.  There was a voluntary association and the declaration of covenants and restrictions didn't grant them authority over the properties.  The HOA was merely a social club.

Years later some of the homeowners decided they wanted a change and so they decided to amend the governing documents to force mandatory membership, require the payment of dues, grant the association jurisdiction,  and allow for the collection of attorney's fees.  This was all approved by 2/3rds of the homeowners, as required by the amendment process of the governing documents.

Sounds very familiar, right?

If you thought the neighborhood described above was Lime Tree Village think again. The association mentioned is the Holiday Pines Property Owners Association and all those things that sounded a lot like Lime Tree and the 2002 mandatory conversion amendment actually occurred over a decade prior.

Why is this tale important? Whatever happened to Holiday Pines and their own mandatory conversion?

Holiday Pines was involved in a huge court case that struck down their mandatory amendment back in 1992 - 10 years before Lime Tree did the same exact thing. This could explain why the lawfirm involved with Lime Tree, Larsen & Associates, told the board of Greenbriar at the time that such actions were a "gray area" of the law and would hold up so long as nobody challenged them.  The club president even sent out letters stating a desire to amend because the association lacked jurisdiction.

So what happened in the Holiday Pines case?

Basically the case, ruled by the Fourth District Court of Appeals, stated that despite being initiated by the property owners,  such a conversion drastically altered the scheme of the developement and substantially impacted the use of one's property without their consent. To put it in other terms, the association decided to rewrite the terms of the contract between property owners and the relationship they held with the neighborhood to the point that it was no longer recognizable as it once was.

The court differentiated between the nature of homeownership and condominium and stated that such changes burdened homeowners and forced them into an association they never wanted to begin with.

Lime Tree was established as a neighborhood with no mandatory association and a small list of negative restrictions. They even touted that fact in their promotional material.

This case is important because it relates directly to the events that had transpired in Williamsburg ten years later.  Legal reasoning would mean the mandatory amendment in Lime Tree would be invalid, and their revitalization attempt to be equally invalid.

There are other reasons as to why the revitalization is unlawful.  Florida statutes require governing documents to permit associations to have enforcement capabilities and lien rights - a power the association has openly admitted they do not possess.  Not to mention the association never met the 2/3rd threshold to amend the declaration back in 2002 - a fact that has been overlooked for nearly 15 years.

When Holiday Pines went to court the question of legality of such an amendment was unanswered. Should Lime Tree go to court there is no uncertainty what would happen. Lime Tree faces decades of statutory and case law, mountains of documentation proving fraud and malfeasance, and most importantly, the signatures of dozens of property owners authorizing a corporation to alter a contract that substantially burdens the use of one's home - a huge, costly liability.  A how do you think a judge would rule when the same thing happened years ago and Lime Tree still decided to go forward? 

No comments:

Post a Comment