By Deborah Goonan, Independent American Communities
Updated 9:15 PM EDT
Regular readers of IAC know that Poinciana, a large master planned community in Central Florida, has been a hotbed of conflict and controversy for at least the past several years.
And that trend continues with the latest motion filed in Polk County circuit court.
AV Homes resists validating number of buildable lots in Poinciana
The motion involves an ongoing election dispute, for which the original complaint was filed with Florida’s Department of Professional and Business Regulation (DBPR), by homeowner Martin Negron. Negron complained that Poinciana’s developer, AV Homes, Inc. (also known as Avatar), illegally cast thousands of votes for undeveloped, unplatted lots, many of which are underwater or would otherwise be set aside for basic infrastructure and easements.
Negron’s legal complaint further contends that Poinciana’s HOA willingly accepts, without verification or challenge, the developer’s calculation of voting ballots to which it is entitled.
In June, an Arbitrator from DBPR threw out the results of February 2017 elections for six of the nine Villages that make up master homeowners’ association known as Association of Poinciana Villages, or APV. The DBPR ordered a new election on August 1, 2017, stipulating that APV must secure from AV Homes documented proof (from County records) of the actual number of homes that could be built on vacant land still owned by the developer.
However, when the election took place on August 1st, AV Homes once again cast with thousands of ballots for unbuilt homesites, in seeming defiance of the DBPR order. Of course, AV Homes won all Village elections, and continues to maintain control of the association by way voting in its chosen leaders.
Shortly after the election, homeowners learned that AV Homes had filed a lawsuit against APV (the master HOA) in Polk County Court, seeking to get a judge that would certify that AV Homes has a legal right to cast all of its votes for vacant lots using arbitrary “maximum density” allowances.
But AV Homes’ lawsuit had been filed with Polk County while the DBPR appeal by APV was still pending. And what’s more, Martin Negron was never told about the case, even though AV Homes sought to set aside DBPR’s mandate to get an accurate count of empty lots upon which homes could be built.
Now Martin Negron is fighting back with a motion to set aside the Judge’s ruling on AV Homes voting rights. The motion claims that Polk County Circuit Court had no jurisdiction to rule on AV Homes’ claim while the matter of the election dispute was still pending before DBPR. Negron alleges AV Homes committed a fraud upon the court by also failing to make Negron aware of the lawsuit as an “indispensable Party.”
You can read the details here:
News of the most recent legal challenge was also reported in The Ledger:
Poinciana Villages residents claim more collusion, backroom dealing after latest election
Under these circumstances, DBPR Arbitrator Terri Leigh Jones has reported APV attorney Thomas Slaten to the Florida Bar for his misconduct and failure to disclose the existence of a Circuit Court case, which has resulted in “inconsistent rulings.” Jones then recused herself from further involvement with the case before DBPR. A new Arbitrator will be assigned.
The saga in Solivita
In the meantime, several homeowners from Poinciana’s 55+ community, Solivita, are also suing AV Homes, but their legal challenges have nothing to do with elections.
The controversy was covered in the Orlando Sentinel in June.
To clarify, Solivita’s HOA elections are separate from elections for APV’s other Villages. Solivita is also governed by two Community Development Districts (CDDs), public units of government whose supervisory boards are elected by registered voters at a public polling place, just as in any general elections.
Solivita’s dispute involves the developer turning over control of the HOA board and the community’s recreational amenities to the homeowners. Several residents are upset that AV Homes plans to sell the community amenities to both CDDs for a price of $73 million, but Plaintiffs say that those amenities are only valued a $19.5 million.
That is quite a discrepancy!
And, by the way, residents have been paying $86 per month for these amenities all along, thinking they were already owned by the HOA. Now Poinciana CDD and Poinciana West CDD want to issue bonds to be paid back by homeowners over 30 years, at $86 per month assessed on their property tax bills.
More details from Orlando Sentinel.
Solivita residents sue developer AV Homes
Residents in the Poinciana-area Solivita senior community have sued developer AV Homes over its plan to sell them the clubhouse, pools and tennis courts for more than $73 million.
Homeowners hired lawyers and a certified appraiser, who stated the property was worth about a quarter of AV’s proposed price. Lawsuits were filed in Polk County Circuit Court.
AV Homes had no comment on the pending litigation. In correspondence with residents, it has stated the financial deal would include $11 million to renovate and build amenities. Residents would pay a capped annual fee instead of the monthly charges that have been in place for more than 15 years. The builder planned to complete the sale last year and now hopes to finalize it this year, according to documents.
Florida law requires developers to hand over control of homeowners’ associations to the homeowners three months after 90 percent of the homes have been sold. AV Homes seeks to sell the Solivita assets now that it has sold about 75 percent of the community’s 5,589 lots, according to SEC filings of AV’s annual report.
AV Homes plans to sell the community’s recreational perks to two Solivita Community Development Districts, which are run by residents. Several district board members stated they had concerns that AV Homes could alternatively sell the amenities to an outside operator and residents would lose all control. The districts would raise the $73 million by selling bonds. Homeowners would repay the bonds over three decades. Residents, mostly retirees, now pay about $86 monthly for a club fee, and those funds would finance the bonds, according to legal documents.
“The proposed sale of the club property to the CDDs [Community Development Districts] would result in the Solivita Homeowners buying what they have already paid to own,” states a legal complaint filed by attorney J. Daniel Clark. “ … instead of the developer turning over the club property to the Solivita homeowners, the developer is attempting to sell them the club property for $73.7 million.”
Looking at websites for both Poinciana CDD and Poinciana West CDD, I was unable to see any mention of the purpose of either CDD to include construction, purchase, and renovation of recreational amenities. The purpose of both CDDs is explained as “maintaining water management, water supply, sewer and wastewater management, bridges or culverts, roadways, street lights, and other basic infrastructure projects within or without the boundaries of the District as provided in the establishment Ordinance.”
Do you see any mention of clubhouses, pools, or tennis courts?
Based on a joint statement from Poinciana and Poinciana West CDDs, it certainly seems that both boards would be content to go ahead with what appears to be a sweetheart deal for AV Homes. Of course, the homeowners with pending litigation are cast as obstructionists to the renovation and purchase of Solivita’s amenities.
But that should come as no surprise, because, in Florida, the developer appoints CDD supervisors for the first 6-10 years, or until a sufficient number of electors (registered voters) reside in the District. So it is common for at least some developer-appointed CDD supervisors to be elected as incumbents, especially when the CDD governs thousands of retirees and part-time residents of Florida. (For general information on CDDs, see my previous article.)
Connecting all these dots together, one has to wonder why AV Homes is so intent on maintaining control of APV, and yet is willing to part with control of Solivita for a mere $73 million.
FL Statute 190, pertaining to Community Development Districts