Will class action lawsuit defeat the HOA culture of corruption?

By Deborah Goonan, Independent American Communities

Buyers of luxury real estate expect a lot for their money. And when they believe they’ve been ripped off, they sometimes sue the responsible party.

The Orlando Sentinel just reported that lot owners in Bella Collina of Monteverde (near Clermont), Florida, have filed a proposed class action lawsuit against developer Dwight Schar. According to a news release posted on Bella Collina’s website, Schar is a co-owner of the Washington Redskins, and a founder of a leading home building company, NVR Inc.

Members of the Tuscan-themed Club enjoy fine dining, catering, a fitness center with salon and spa, a pool, tennis courts, and 18 holes of golf. The private golf club community’s residents include the former Mayor of Monteverde.

Planned real estate offerings include estate homes exceeding $1.5 million, new villas starting at roughly half a million dollars, and soon-to-be-offered luxury condominiums. (Be sure to read the Legal Disclaimer, though.)

 

Bella Collina property owners, in lawsuit, allege racketeering

By Paul Brinkman, Orlando Sentinel

March 13, 2017

One of Central Florida’s most troubled home developments, the upscale Bella Collina country-club near Clermont, has been hit with a proposed class action lawsuit by people who bought lots there before the development went dormant in the Great Recession.

The lawsuit alleges that the owners behind the Bella Collina company, including Palm Beach businessman Dwight Schar, actively sought to destroy property values in order to drive out lot owners so they could repurchase the entire project at super-low prices.

The lawsuit alleges Schar and his companies engaged in racketeering, embezzling and conspiracy

Schar and his local business partner, Randall Greene, aren’t commenting. A company backed by Schar called DCS bought Bella Collina lots, the Nick Faldo-designed golf course and the $40 million clubhouse in 2012 for just $10 million.

Read more:

http://www.orlandosentinel.com/business/brinkmann-on-business/os-cfb-brinkmann-20170313-story.html

 

What I find intriguing about this story is that the allegations being made by Bella Collina owners are strikingly similar to allegations made by owners of moderately priced and “affordable” condominiums in Florida and other states across the country.

Common objections of owners typically include the following:

  • Many planned units have never been completed or sold
  • Amenities were never built or renovated as promised
  • Developer or investor-controlled board approves outrageous special assessments and demands immediate payment
  • Maintenance of portions of the common areas or amenities are neglected, reducing appraised value of homes
  • Developer or investor then forces association members to sell their units or parcels back at artificially low prices

For a little history of Bella Collina, see this 2014 article:

Construction restarts in luxury Bella Collina ‘ghost town’

Of course, most condo owners have limited financial resources, making it much more difficult for them to take legal action.

But if Bella Collina homeowners are successful in court, could that open to door to class action lawsuits in response to hostile condo association takeovers, especially the kind that force condominium termination upon unwilling owners?

Also of note: even sophisticated and affluent home buyers can be exploited. According to the Orlando Sentinel article, the attorney for owners at Bella Collina also alleges that the developer negotiated “illegal” contracts, no doubt by way of confidential, out-of-court settlements.

How many current and former owners of association-governed property have been intimidated or coerced into unfair secret settlements? No one knows for sure, because legal negotiations happen in the shadows, and owners are threatened with future litigation leading to financial ruin if they dare break the gag order.

The fact that a small group of owners at Bella Collina have the courage to stand up for their rights is remarkably rare.

 

 

 

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