Homebuilder Sues HOA For Capital Contribution Fees

A homebuilder sues HOA at Valencia Sound for a capital contribution fee amounting to $3,900. The Valencia Sound Homeowners Association would impose this fee on all resales. However, instead of stopping at resales, the HOA levied the capital contribution fee on unsold homes as well.

Bylaws Amendment After HOA Turnover

The Valencia Sound Homeowners Association is a community composed of 653 units. It’s a high-end development situated west of Boynton Beach, Florida. GL Homes was the development’s homebuilder and began development four years ago. In April 2023, the homebuilder turned over control of the HOA to the community residents. However, because GL Homes still has a few units left to sell within the community, it’s still technically part of the HOA.

Following the turnover, the HOA quickly replaced some of the original bylaws GL Homes adopted. The homeowners association also included a capital contribution fee on all resales as part of the amendment. This amendment was adopted, with the homeowners’ approval following Florida law, in August 2023.

However, going against its imposed rule, the Valencia Sound HOA applied the fee to unsold homes on top of home resales. GL Homes warned Valencia Sound that it would need the homebuilder’s approval to adopt the fee. Nonetheless, according to the lawsuit, the HOA ignored GL Homes.

Homebuilder Sues HOA

After the imposition, the homebuilder sues HOA for charging buyers of new homes the special capital contribution fee of $3,900. This amount was equivalent to half of the community’s maintenance fees. While most HOAs impose upfront maintenance fees for capital improvements, the amount usually does not exceed a three-month payment. Valencia Sound is currently charging twice that amount.

The lawsuit implores a judge to declare the capital improvement fee null and void because the HOA imposes it on unsold homes. Valencia Sound has already collected over $100,000 from the direct buyers of GL Homes.

Steven Helfman, general counsel for GL Homes, says they’re simply trying to do right by their people. The lawsuit will not benefit them, but the buyers never anticipated they would pay that amount. Their previous buyers did not pay for it. Thus, the people who bought homes after the HOA turnover shouldn’t have to pay it either.

On the other hand, the lawsuit could make a greater impact than simply alleviating the financial burden of GL Homes’ buyers. The lawsuit argues that the way the HOA adopted the fee was wrong. Hence, even the fees imposed on resales could be countered.