Open Letter to the Secretary of State on Aug 5th ,2021:

Dear Ms. Lee,

We are a group of homeowners concerned about our HOA’s finances after the board had severely depleted our statutory reserves, by spending $1.4 Million for playground upgrades and landscape beautification from 2018 to 2020, completely ignoring our 2017 reserve study, which recommended only $9,672 in expenditures in the same time period.

The Towngate Master Association in Pembroke Pines has 2094 homes. The reserve fund was established in 1999 by the developer and the reserve fund balance at the end of June was $598,883 instead of $1,933,442 as calculated by the reserve analyst, despite an increase in our assessment fees by 57% in 2019.

Some directors/officers might have been colluding with the management company to steer business to a few vendors like the landscaping company, which was paid at least $220,000 without board approval. The President and/or Treasurer have paid invoices without board authorization or a contractual obligation and a $30 million contract was awarded without a competitive bidding process that complies with Florida regulations.

After becoming aware of the financial wrongdoings, homeowners called a special member meeting to recall two directors. The management company refused to send out the invitation letters for the meeting, so homeowners had to organize everything themselves. Despite the obstruction by the management company,  enough homeowners showed up or signed a proxy and the meeting was held on March 3rd, 2021. The vast majority of members voted in favor of the recall, but the recalled directors refused to leave.

Neither did they hold the required board meeting within the statutory time period, nor did they file for arbitration with the DBPR to dispute their recall as required by FS720.303(10)(d), in complete disregard of the Florida Statutes for HOAs.

In April, when Maria Iturrioz, a homeowner, contacted you, you suggest talking to Rikki Taylor from the DBPR. We called her, but she told us that the DBPR has no jurisdiction over HOAs violating Florida laws like the reserve funding requirements in FS 720.303(6). She suggested filing a petition for arbitration regarding our recall.

Because of the board’s failure to follow Florida law, homeowners had to pay $5,000 for a lawyer to help with the recall arbitration filing. Our lawyer sent the mandatory pre-arbitration demand letter to the association. The recalled President hired a new law firm (KBR) and filed a statement to change the registered agent with the Department of State on May 11th 2021, without board authorization. Our lawyer filed a petition for non-binding arbitration pursuant to FS720.303(10)(g) which refers to the procedure in FS718.1255.

After a month, the DBPR arbitrator dismissed the petition because of one allegedly missing mandatory form, the demand letter, which the association had received and responded to. During this one-month period, the DBPR had communicated several times with our lawyer and requested other non-essential documents like the declaration of covenants and an additional fee of $150, but not the mandatory demand letter.

Our lawyer filed a motion for reconsideration since he had sent all required documents by mail and he cited case law that, if a form does get misplaced, the arbitrator should have simply asked for it. Nonetheless, the arbitrator denied the reconsideration motion. The arbitrator declared the arbitration proceedings as binding, thus preventing any legal review of the recall. Attached is an affidavit of our lawyer Joseph Pustizzi, testifying that the petition was mailed to the DBPR complete with all forms.

Now, the recalled directors/officers continue wasting homeowners’ money and refuse to even discuss how to replenish the reserves. An excerpt from the President’s email to the board:

If there is any “misappropriation“. What then?  We will not likely get anything back in terms of money.  The services were provided.  If for some reason, there’s no minutes to reflect a motion to authorize the expense, what then?  We cannot get the money back.  

Under questioning, the President could not explain what services were provided for the payments that have not been authorized by the board and he thwarted any attempt to recover the misappropriated funds.  

It is surprising that the DBPR is preventing homeowners from recalling financially irresponsible officers and directors from their association, even blocking their access to the courts.

Some homeowners started to wonder whether an HOA is a law-free zone, with no legal recourse when directors and management boldly ignore Florida Statutes and go on a spending spree with the homeowners’ reserves that have been accumulated for 20 years. 

How can we get a legal review of the recall, can you vacate the DBPR decision or declare it non-binding to permit a court review?

Who can help us to recover our reserves that have been depleted in violation of Florida law?