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JamesO5 (Florida)
Posts: 12
Posted:
The developer recently sold the recreational facilities and golf course in my community. We may be extra dumb, but most home owners thought that the rec. facilities would be turned over to the HOA eventually. As it turns out, our Association was formed under Florida statute 617 not 720. When buying we had to sign a statement acknowledging that we would be required to join a HOA, the _____ Residents Association. When the sale came up we had the right of first refusal, but were not able to raise the $10.million to purchase the rec. facilities. To make a long story shorter, our Assoc. is only responsible for social, recreational and cultural activities. Now the new owner is changing some of the rules for the facilities (not the C&R's).For example: Once a month we hold a Pancake breakfast in the club house. The volunteers would start preparations at 5:30am and begin serving at 7:30.Now the club house doesn't open until 7:00am. This makes it impossible to hold the pancake breakfast. In the past the committee members had a key to access the club house, now all the locks have been changed and no exceptions to the 7:00am rule are permitted. The main issue is that the new owner refuses to discuss any concerns with the board, especially maintenance issues and rules.
Not being a standard HOA there may not be a lot of help here, but if anyone has any insight or advice , I would certainly appreciate it.
KevinK7 (Florida)
Posts: 1,343
Posted:
From my understanding of the law, a corporation cannot force you into membership. Florida Statute 720 does define membership as mandatory. What it sounds like here is the developer tried to create a loophole, calling their corporation an association but trying to avoid all the laws that come with one. I had a property in a neighborhood that did something similar - they amended the covenants to declare every property subject to their rules, but they claimed to be voluntary to join and thus not governed by 720.

Now some questions.

Do you have covenants and restrictions?

If so, do they state that ____________ Residents Association has any authority?

Is ____________ Residents Association filed with the state? Have they been licensed with the Department of Business and Professional Regulation? If not, have you filed a complaint for unlicensed practice of a HOA? Have you contacted a lawyer?

What are you trying to do? Get out of the "HOA"? Stop paying?
JamesO5 (Florida)
Posts: 12
Posted:
Thanks for responding. The Association is registered with the county as a " Florida Corporation Not for Profit ".

From the Articles of incorporation: The Association shall have all the powers and duties reasonably necessary to operate and maintain the Association, including the following:
JamesO5 (Florida)
Posts: 12
Posted:
Hit the wrong key apparently. Including the following: a.to meet for the purposes of ascertaining the social, recreational and cultural activities in which its membership is interested in participating. b.to approve and schedule events that meet with the rules and regulations of the recreational areas as established pursuant to the declaration. c. to provide for elections of representatives etc. d. to exercise all the power and privileges and to perform all the duties and obligations of the Association. e. to promulgate or enforce rules, bylaws , covenants, restrictions or agreements. f. to have and to exercise any and all power, rights and privileges which a nonprofit corporation organized under the laws of the state of Florida may now or hereafter have or exercise.
JamesO5 (Florida)
Posts: 12
Posted:
We contacted a lawyer when the offer to purchase was received. He explained the difference between HOA's formed under statute 720 and the 617 statute that applies to us. His take was that the greedy bastards had followed the letter of the law if not the intent. Before we got all questions answered the Board gave in to pressure from residents about spending funds on attorney fees, when we needed to send in a $2500. retainer for the lawyers to continue.
JamesO5 (Florida)
Posts: 12
Posted:
Our goal is not to get out of paying or belonging to the Association, we simply want to have the best active adult community that we can. I suppose it would have been wise to hire an attorney to review the C&R's before buying, but there are a couple of retired lawyers living here who seem as surprised as the rest of us.
After receiving notice of the offer to purchase I personally read the C&R's and bylaws etc. over and over and pretty much learned something new every time.
KevinK7 (Florida)
Posts: 1,343
Posted:
Quote:
Posted By JamesO5 on 10/15/2013 10:55 AM
Thanks for responding. The Association is registered with the county as a " Florida Corporation Not for Profit ".

From the Articles of incorporation: The Association shall have all the powers and duties reasonably necessary to operate and maintain the Association, including the following:

Filed with the county? It was my understanding that the corporation would have to file with the state. Are you saying they just filed paperwork with the county saying they are a corporation and not the state?

Also, I was referring not to the Articles of Incorporation. I was referring to the Covenants and Restrictions - the legal contract that binds your property to a certain set of rules and possibly a HOA. Are there any C&Rs filed on your property that require you to do certain things, such as be a member to the association?
KevinK7 (Florida)
Posts: 1,343
Posted:
From my understanding, they may call themselves a HOA, function like a HOA, but claim to be something different, and in the eyes of the state they would be viewed as running a HOA without a license and require registration, per a new law.

While most HOAs may be formed under 617, to say they are not governed by 720 would only hold true if they are a voluntary association. Here is an excerpt from a HOA lawyer's blog (http://condohoalaw.blogspot.com/2013/04/my-hoa-is-governed-by-chapter-617-not.html):

Your homeowners’ association tells you it was created a long time ago under Chapter 617 of the Florida Statutes and Chapter 720 does not apply – that they do not need to follow Chapter 720. What they are telling you is partially true. Actually, it is 100% true if they want to declare they are a voluntary association and you are not a mandatory member required to pay them assessments. Voluntary associations are not governed by Chapter 720. Since I doubt they will do so, let’s look at what is true and what is not true.

Chapter 720 did not exist before the year 2000. Certain language in Chapter 720 did exist prior to that in Chapter 617, as sections 617.301 to 617.306, but those sections were not enacted until the mid-1990s.

Your association is correct it was created under Chapter 617. Your association is correct Chapter 617 applies. All associations are governed by Chapter 617, which covers “not for profit” corporations, unless they were organized as a “for profit” corporation under Chapter 607. Both Chapter 720 and Chapter 617 govern homeowner associations and if the two conflict Chapter 720 prevails. Chapter 617 even states in some sections the section does not apply to community associations (homeowner associations and condo associations).
Your homeowners’ association tells you it was created a long time ago under Chapter 617 of the Florida Statutes and Chapter 720 does not apply – that they do not need to follow Chapter 720. What they are telling you is partially true. Actually, it is 100% true if they want to declare they are a voluntary association and you are not a mandatory member required to pay them assessments. Voluntary associations are not governed by Chapter 720. Since I doubt they will do so, let’s look at what is true and what is not true.

Chapter 720 did not exist before the year 2000. Certain language in Chapter 720 did exist prior to that in Chapter 617, as sections 617.301 to 617.306, but those sections were not enacted until the mid-1990s.

Your association is correct it was created under Chapter 617. Your association is correct Chapter 617 applies. All associations are governed by Chapter 617, which covers “not for profit” corporations, unless they were organized as a “for profit” corporation under Chapter 607. Both Chapter 720 and Chapter 617 govern homeowner associations and if the two conflict Chapter 720 prevails. Chapter 617 even states in some sections the section does not apply to community associations (homeowner associations and condo associations).


My neighborhood tried this. They used the whole "we are but aren't a HOA" argument but then tried to get away with certain actions. I would recommend seeking a second opinion from an attorney experienced in HOA law - preferrably one who represents individuals, not HOAs. When I had my issues I had gone to some attorneys and most assumed the HOA was on the up and up. It was only after some of them looked at the specifics did they come to realize something was wrong.
KevinK7 (Florida)
Posts: 1,343
Posted:
Quote:
Posted By JamesO5 on 10/15/2013 11:23 AM
Our goal is not to get out of paying or belonging to the Association, we simply want to have the best active adult community that we can. I suppose it would have been wise to hire an attorney to review the C&R's before buying, but there are a couple of retired lawyers living here who seem as surprised as the rest of us.
After receiving notice of the offer to purchase I personally read the C&R's and bylaws etc. over and over and pretty much learned something new every time.

Sorry. Missed this when I made my other response.

So there are Covenants and Restrictions?

What do they say regarding a HOA, membership, common property, etc.?
GlenL (Ohio)
Posts: 5,491
Posted:
James I'm not an attorney nor do I play one one the internet but do your documents specifically state you will be governed under 617? Because if not you would IMHO also fall under 720: (emphasis added)

720.302 Purposes, scope, and application.—
(5) Unless expressly stated to the contrary, corporations that operate residential homeowners’ associations in this state shall be governed by and subject to chapter 607, if the association was incorporated under that chapter, or to chapter 617, if the association was incorporated under that chapter, and this chapter. This subsection is intended to clarify existing law.

You state the clubhouse was sold to a third party, what in your documents obligate you and your fellow homeowners to support it? If it is not part of the HOA are the owners now operating a business in a residential area? It might be worth your while to visit the Zoning Board to find out if they can operate in your development. While you are there I would ask to see the original application and any amendments for your development, it should include whether or not the clubhouse was to be part of the development.

Studies show that 5 out of 4 people have problems with fractions
KevinK7 (Florida)
Posts: 1,343
Posted:
When 720 was passed 617 was amended to state community associations would also be governed by 720 just so long that it fits the definition laid out in 720.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
James

Sorry to say, but what you are experiencing is quite common. People buy into an association assuming things and their assumptions come back to get them. Especially amenities like a golf course with a clubhouse. I have seen this happen in IL, MA, NH, and SC. I got "bitten" on the one in IL.

Bottom line is the association and the courses had one name, one owner, a set of "verbal" promises, etc. but they were set up under different corporations. In the end, the courses became separate entities and the rules changed.

Forget a simple pancake breakfast. How about:

1. Showing up thinking one was a member based on a lifetime initiation one had paid last year and being told well that was paid was to the old owners and we are the new owners. You have to pay another initiation. Twice in 3 years.

2. We are the new owners and we are going from private to public.

3. Dues increased by 200%.

4. Spending minimum increased by 200%.

5. Areas maintained by the club ended up being part of the association so the association had to raise dues to pay for.

Pancake breakfasts were the least of the issues.

Be careful of amenities. They often are the things that jump up and bite one in the a$$.

JamesO5 (Florida)
Posts: 12
Posted:
Sorry, I misspoke. The Association is registered with the Florida Department of State Dept. of Corporations.
JamesO5 (Florida)
Posts: 12
Posted:
The CR's state : The members of the Association shall consist of the Declarant and all owners of Homesites. Except in the case of Declarant, membership shall be appurtenant to and may not be separated from ownership of a Homesite.

Title to Common Areas: Declarant shall retain title to the common areas, subject to Declarant's right later to sell, mortgage, or otherwise encumber its interests in all or a portion of the common areas, along with the improvements thereon.

This statement is apparently all the Developer had to do to bypass most of Statute 720.
JohnB26 (South Carolina)
Posts: 1,569
Posted:
you, like many others, have been layed, relayed, and parlayed

legally, of course

617 or 720 does not really matter

the members will never own the 'common' elements - further - since this fact is actually in the 'covenants' you AGREED when you bought

CAVEAT EMPTOR
KevinK7 (Florida)
Posts: 1,343
Posted:
Quote:
Posted By JamesO5 on 10/16/2013 4:47 AM
The CR's state : The members of the Association shall consist of the Declarant and all owners of Homesites. Except in the case of Declarant, membership shall be appurtenant to and may not be separated from ownership of a Homesite.

Title to Common Areas: Declarant shall retain title to the common areas, subject to Declarant's right later to sell, mortgage, or otherwise encumber its interests in all or a portion of the common areas, along with the improvements thereon.

This statement is apparently all the Developer had to do to bypass most of Statute 720.

From reading the C&Rs above, it sounds like 720 would apply. It is basically stating that membership is mandatory and tied to the property, and states who is a member. There is no bypassing part of the law. What your c&rs state fall in line with 720.

Is the developer still in the picture?
JamesO5 (Florida)
Posts: 12
Posted:
I agree John, I didn't see the C&R's until my "Developer orientation" that took place 3 or 4 months after closing.
NaĂŻve northerners come down to Florida thinking it's all the same, only to get the rude awakening sometime later.
The sad thing to me is that 720 is a good law designed to protect people's rights but it can be circumvented so easily by a developer .
JamesO5 (Florida)
Posts: 12
Posted:
The Developer sold everything but the Sales office and two parcels that his master plan will build condos on . The C&R's seem to indicate that they will be entitled to the Recreational Facilities of the current community which is comprised of 1040 single family homes.

The new owners of the Recreational Facilities assume all duties and privileges of the Declarant.
JamesO5 (Florida)
Posts: 12
Posted:
We have accepted the fact that we are screwed as far as ownership of the Rec. facilities is concerned. The thing I need advice on is the fact that the owners won't even listen to any concerns we have about maintenance or upkeep. They have the right to change the rules any way they want and refuse input from the Board. The changes seem arbitrary and they seem to be doing it because they can. Little or no consideration to the quality of life of the folks paying the bills.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
James

There was a similar situation at Ipswich Country Club in Ipswich MA. Many thought the home owners/members ($25K initiation) owned the club. It was sold out from underneath them twice and they were told if they wanted to be/stay members they would have to pay another initiation each time.

Sky Meadow in Nashua NH promised a private club so many bought on or around the club. They never got enough club members to go private so they stayed public.

Country Lakes Golf Club, Naperville IL. Same situation. Buy a home on a member only private club. After the homes were sold, the owner took the club public. I got bit on this one.

Not limited to FL.

JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JamesO5 on 10/16/2013 6:14 AM
I agree John, I didn't see the C&R's until my "Developer orientation" that took place 3 or 4 months after closing.
NaĂŻve northerners come down to Florida thinking it's all the same, only to get the rude awakening sometime later.
The sad thing to me is that 720 is a good law designed to protect people's rights but it can be circumvented so easily by a developer .

James

You say you did not see the Covenants until 3-4 months after closing. I bet if you go back over your closing documents, you signed something saying you had read and were aware of such. You may have even signed saying you were given a copy. Not saying you had them nor read them but.

As long as the facilities are kept in top shape, and available to you, it might just turn out to be a blessing in disguise. Your association will not have to worry about maintaining/operating them. Just pay for them and enjoy them.

I have lived in 6 or so associations ranging for one that owned an 18 hole private golf club to my present association that has no amenities. I have learned the most troublesome and costly items are always the amenities. I do not want amenities. If I do, I will join a club that has them such as I have done here.

JamesO5 (Florida)
Posts: 12
Posted:
I'm probably did sign a document saying that I received the C&R's , obviously I didn't do a real good job of reviewing things.

There was a charge on the closing for cable TV. When I discovered it sometime later I asked what it was for. The response was to verify that it is working right because some folks have satellite dish reception and they may have cut a cable or something. Well I brought Direct TV from up north and had not used it, but I had tried to use it when we moved in before my DTV was installed and it didn't work. So out of curiosity I tried it again and sure enough it still didn't work 18 months later. It has been almost two years eight months now and it still doesn't work even though I have been paying a mandatory basic charge of $18.91 per month. Yes I have raised hell about it and I've been promised over and over that it will be taken care of but still no connection. This is however something that remained with the original developer. He contracted with a new company to take over and run the cable TV with fiber optic etc., but he still collects $18.91 from everyone for doing nothing.
GlenL (Ohio)
Posts: 5,491
Posted:
James not to pick on you but remember receiving this document BEFORE you bought?

720.401 Prospective purchasers subject to association membership requirement; disclosure required; covenants; assessments; contract cancellation.—
(1)(a) A prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale. The disclosure summary must be in a form substantially similar to the following form:

DISCLOSURE SUMMARY
FOR
(NAME OF COMMUNITY)

1. AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS’ ASSOCIATION.

2. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

3. YOU WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER . YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .

4. YOU MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE.

5. YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS’ ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

6. THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS’ ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .

7. THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS.

8. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

9. THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

DATE: PURCHASER:

PURCHASER:

The disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the disclosure summary required by this section.

Studies show that 5 out of 4 people have problems with fractions
GlenL (Ohio)
Posts: 5,491
Posted:
I understand you are upset at having no feedback in the policies regarding the use of the clubhouse but you have no investment in it other than being required to pay a fee to use it. You may use it or not but you must pay. Sort of like shopping at a members club, yes you are a member, yes you pay for it but no you don't own it and the people who do, get to set the rules including hours of operation.

Studies show that 5 out of 4 people have problems with fractions
JamesO5 (Florida)
Posts: 12
Posted:
No I don't. I do remember signing a document that stated "you will be required to be a member of a Home Owners Association , The ___ ____ Residents Association". That was all that was on that particular document.

Again, let say that I am not looking to get out of the Association or to get out of paying amenities fees. I am asking for suggestions to promote or even force the new owner to communicate with the Board and listen to our concerns and suggestions. We want our members to enjoy the best lifestyle available in our community.

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