Ready To Terminate Your Hoa? New Bill Aims To Simplify Process

A South Florida legislator is offering homeowners a solution if they’re fed up with their HOAs: He wants to make it easier for them to dissolve their governing associations.

More and more Florida homeowners believe that trouble caused by their HOA and condo boards overshadow the benefits they provide, according to state Rep. Juan Carlos Porras, a Republican representing part of Miami-Dade County.

Making it easier to terminate such associations is one of several eyebrow-raising ideas in a comprehensive bill, HB 657, that Porras recently filed in advance of the legislative session that begins Jan. 13.

Opposition is likely. In a statement from an influential trade group, Community Associations Institute, CEO Dawn Bauman said the group is “closely assessing and engaging” with the bill.

But it added that a vast majority of associations are “well run” and that 86% of homeowner rate their experience as very good, good or neutral.

“Dissolving an HOA is already possible under current law, so we are carefully evaluating how the bill’s provisions could affect homeowners, community stability and dispute management,” Bauman was quoted as saying.

Porras’ bill simplifies the dissolution process, which currently requires hiring a trustee, filing a termination plan in public records, and securing approval from at least 75% of homeowners.

Porras, in an interview with the South Florida Sun Sentinel, said his bill was “the culmination of years of frustrating meetings, calls and emails from homeowners, especially in the district I represent in Southwest Miami-Dade.”

He added that he has spoken with fed up homeowners “from Pensacola to the Keys” who don’t know where to turn for solutions to their HOA and condo board problems.

Targets of complaints, Porras said, included The Hammocks, a West Kendall community where authorities have accused former board members of stealing hundreds of thousands of dollars by creating phony companies and billing for non-existent work. The yearslong investigation is still underway. Two suspects have pleaded guilty, while charges are still pending against several others.

But complaints also involve “regular disputes that have to do with documents and rules and special assessments,” he said.

Porras’ bill would eliminate a provision of state law that requires homeowners to bring their disputes to mandatory mediation before filing lawsuits.

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Hosting special HOA court

Instead, the bill would create a Community Association Court Program that would operate within circuit court systems.

A news release by Porras said the court program would be “a new, streamlined system” that would ensure “qualified arbitrators oversee disputes and gives homeowners a more accessible and efficient path to resolution.”

Funding for the system would be diverted from the state’s Department of Business and Professional Regulation, an agency that homeowners contend is slow to investigate complaints and resolve grievances.

Unhappy homeowners could focus on terminating their HOA altogether.

That process will be easier to initiate than current law requires, Porras said. First, a termination vote can be initiated by a petition signed by at least 20% of homeowners.

Two-thirds of HOA members would be required to approve termination, he said.

Then a homeowner or a designee would secure a judge’s approval of a dissolution plan that would spell out how the community would maintain common elements — such as roads, sidewalks, streetlights, retention ponds or recreational amenities — previously managed by the HOA.

How would services be provided?

Porras said he envisions that leaders of the termination effort would secure those arrangements through their cities or counties, possibly by creating a municipal services district that would fund the services from special taxes levied in place of HOA fees.

Others might replace their HOAs with a “private, optional club membership” that would fund maintenance.

“It’s obviously up to the homeowners on how they want to be self-governed or even if they want to have these common elements,” Porras said.

Left to be determined in Porras’ bill is how much say a governing city or county would have in an HOA’s decision to terminate, particularly if the city or county would be expected to pick up the slack.

Local governments save money by relying on HOAs to provide those services.

“There would have to be conversations between the homeowners, the local governments and possibly the judge (overseeing the termination), Porras said. “I would imagine the local governments would have a say over how that happens.”

Porras says he has spoken with numerous legislators and lobbying groups, including the powerful Community Associations Institute, which weighs in on nearly every bill that would affect HOA and condo association governance.

“Honestly, I have not had a lot of pushback from the industries,” he said, adding the bill was drafted “to make sure we give homeowners the most amount of rights and the most amount of power, but not to create a black hole or chaos in the making.”

He named a state senator he hoped would sponsor a version of his bill in the Senate, but that senator has not responded to a request by the Sun Sentinel for comment.

Although the bill has not yet been scheduled for a committee hearing, opponents are already speaking up.

Eric Appleton, an Tampa-area based HOA attorney, told Tampa Bay CBS affiliate WTSP-TV that allowing HOAs to dissolve would create widespread instability. “We can only imagine the chaos that it would create,” he told the station. “It would be borderline lawless.”

Others say ideas in the bill are worth exploring further.

Donald Cleveland, president of Delray Beach-based MPR-Fintra Inc., an insurance brokerage that works with community associations, told the Sun Sentinel he likes the idea of replacing mediation with binding arbitration overseen by locally based officials.

He called the idea to create a specialized court “a really good concept” but questioned whether it would be limited to enforcement of provisions spelled out in state laws. “There doesn’t appear to be any consideration for intervening or taking jurisdiction in disputes relating to the restrictive covenants, rules or regulations of the associations,” he said.

He also called the termination provisions “an important step” but said they should be clarified to ensure that they don’t serve interests of developers “rather than existing residents who find that their association is no longer functional.”

Jan Bergemann, president of an activist group, Cyber Citizens for Justice, focused on community association reforms, said his group supports Porras’ bill.

The HOA termination provision, Bergemann said, will mostly help homeowners in old HOAs with few or no amenities. “They have no real incentives to be an HOA besides paying for management,” he said.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at rhurtibise@sunsentinel.com.