Solivita’s homeowners 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.”

Tampa attorney J. Carter Andersen represents homeowners on a second legal challenge that disputes the bond sale. Florida allows community development districts to pay for construction, land purchases and other improvements with bonds. He questioned whether bonds can be used for a sale that primarily generates profit for the developer.

“The developer has convinced the CDD boards to pay $73.3 million for amenities that are appraised for $19.25 million,” Andersen said. “That creates an excess profit to the developer of $54 million.”