FL Division of Business and Professional Regulation orders new Village elections in August.
By Deborah Goonan, Independent American Communities
The Orlando Sentinel reports that a homeowner has prevailed in an election dispute with Association of Poinciana Villages in an Arbitration ruling last week.
The ruling represents a victory for homeowners, and a step toward a more fair election process that owners hope will finally wrest control away from developer Avatar, also known as AV Homes. A majority of Poinciana’s Village boards, and its master HOA, Association of Poinciana Villages (APV) , have remained under developer control for 44 years.
State orders Poinciana HOA to throw out election
Beth Kassab, Orlando Sentinel
June 23, 2017
A state arbitrator on Friday sided with a homeowner who challenged the way Poinciana’s homeowners association, one of the largest in the state, held its election of board members.
The arbitrator threw out the Association of Poinciana Villages’ results from a February election and ordered the group to hold a new election in August for the sprawling community of 26,000 homes in Osceola and Polk counties.
In question was whether Avatar, Poinciana’s developer and still a significant landowner, could cast one vote for every house it says it could potentially one day build on land it owns that is still undeveloped.
As a result of that practice, Avatar has been able to elect its representatives to the HOA board and maintain control over the 44-year-old community of more than 50,000 people, including the collection of fees, argued homeowner Martin Negron, who filed the complaint against the association.
To summarize, Arbitrator Terri Leigh Jones concluded that homeowner Martin Negron has a valid complaint. Avatar was claiming its rights to cast votes for undeveloped parcels of land, even though many of those parcels would not be approved for home construction under today’s development codes.
Therefore, thousands of votes were deemed likely to be invalid, skewing election results to favor the developer’s chosen candidates to serve on Village boards, many of them ultimately appointed to APV.
The Arbitrator ruled that Avatar must provide documented proof of the number of undeveloped parcels that could be legally approved as future homebuilding sites. Only then is the developer entitled to cast votes for those lots, based upon current County development codes.
A small step in the right direction
It is important to note that, while the DBPR has ruled that many of Avatar’s votes were not valid, the DBPR did not alter Avatar’s weighted voting rights as specified in various governing documents and formal agreements.
Although most homeowners do not realize it, it is typical for developers of HOAs to have the legal right to cast multiple votes per undeveloped and unsold parcels, until such time that control of the association transfers to homeowners. Many governing documents give the Declarant (developer) at least three votes per unsold parcel. I have seen governing documents giving the Declarant nine votes per parcel.
To illustrate how that impacts control of an association-governed community, here is how the votes would stack up in a residential development of 100 units:
In this example, you can see that more than three-quarters of units must be sold before homeowners can outvote the developer in elections or on important matters such as amending governing documents, approving substantial assessment increases, or even termination or dissolution of the association.
Let’s look at another example, assuming 5 votes per unit. As the reader can see, the advantage is clearly skewed far in favor of protecting the developer’s interests.
Hopefully, reports of what has happened in Poinciana will spur some serious, soul-searching discussion about the fundamental injustice of weighted voting rights for Developers and their Successors (investors that take over if the Developer declares bankruptcy).
Better yet, Americans need to engage in serious dialogue with their elected government officials about the undemocratic principle of attaching votes to property, rather than to persons age 18 and up who reside in an association-governed community, particularly when that association serves in a quasi-governmental capacity. Clearly, this is the case for Poinciana, a Census Designated Place with more than 50,000 residents living in roughly 26,000 dwellings.
What’s next for Poinciana?
Several important considerations come to mind, in light of the order for a new election in Poinciana.
Each Village has its own HOA, and six of the nine Villages must conduct new elections. But who will govern and manage those elections? In the past, APV has taken charge. However, it would seem that to put APV in charge of conducting new Village elections would be a conflict of interest, under the circumstances.
Will AVP be required to provide each Village with an accurate membership list, so they can provide ample notice of a new election?
Or will the Villages need to hire a neutral third party with knowledge and expertise to oversee the entire election process – such as Registered Parliamentarian or the League of Women Voters? Perhaps, given the size of Poinciana, election officials from Osceola or Polk County can offer their assistance?
Who will ensure that Avatar submits accurate reports of the number of buildable parcels for which it is entitled to cast votes? It would seem that APV and its management company, First Service Residential, have systematically failed to verify the validity of votes cast in the past. Therefore, can homeowners trust that the HOA or management company will act in the interest of fairness in the upcoming August election, or any future election, for that matter?
Read the DBPR ruling and order for a new election in August 2017 here:
IAC UPDATE July 4, 2017
Poinciana HOA asks for new hearing in election dispute
Ryan Gillespie Ryan GillespieContact Reporter
July 2, 2017
Days after an arbitrator ordered one of the state’s largest homeowners associations to toss the results of its latest election and host a new one within a month, the association has asked for a new hearing.
Lawyers for the Association of Poinciana Villages argued that votes cast by developer Avatar didn’t affect the outcomes of several races tossed out in the arbitrator’s ruling. The group also contends the arbitrator ruled outside of her jurisdiction.
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