Settlement

“We are just trying to do right by our people,” said Steven Helfman, general counsel for GL Homes, at the time the lawsuit was filed. “This is not really a benefit to us. It is a benefit to these buyers who never expected to pay that money. None of our other buyers paid it.”

Almost all HOAs in the county impose an upfront payment of HOA maintenance fees as a way to pay for capital improvements. But by the time the HOAs get around to imposing the fee, the homebuilder, in most cases, has sold all of its homes.

The one-time fee is usually the quarterly maintenance fee. At Valencia Sound, with homes often selling for well over $1 million, the HOA made the fee equal to two quarterly maintenance fees, or $5,140. Buyers of GL Homes had to pay that at closing.

At Valencia Sound, the HOA moved quickly to impose the capital contribution fee once it assumed control of the development from GL Homes last April. At issue was that it did not exempt those buyers who bought remaining homes from GL Homes.

“Just because these people bought after we turned over the HOA does not mean they should pay that fee,” Helfman

said last month after the suit was filed in circuit court. He noted that he warned the HOA that it was improper to collect the capital contribution fee from its buyers.

Efforts to obtain comment from the Valencia Sound HOA were unsuccessful. The 653-unit development is nearly sold out. Only a few homes are still available for sale through GL Homes.

With the settlement of the lawsuit, there is no legal challenge to the fee being imposed on resales. Had the case gone to trial, the fee itself could have been wiped out because the the lawsuit contended the way in which the fee was adopted was wrong.

GL Homes began building the development more than four years ago. The new HOA board, with approval of homeowners, adopted the capital contribution rule in August. “We have never seen an HOA try to do this on our buyers. I’m not sure any other HOA has done it,” Helfman said.

Joshua Gerstin, a Boca Raton lawyer who specializes in HOA law, said he was surprised that the HOA went ahead and collected the fee from buyers who bought directly from GL Homes, especially when GL Homes warned that it was improper.

“I cannot imagine their attorneys telling them that they could do that,” Gerstin noted. “GL wrote the rules, and it had to be clear that such a fee could not be levied against their buyers.”