‘Zombie HOA’ now the center for lawsuits in Florida
Homeowners of a townhome complex in Homestead, Florida, are taking the complex’s developer to court for allegedly failing to transfer HOA control to the homeowners.
In fact, homeowners in the Villa Portofino East The complex – which consists of 117 townhomes – claims the developer had control of the HOA for 20 years after the units were sold. He collects contributions from the residents, but maintains an iron grip on the board of the homeowners’ association.
Control and decision-making authority over Florida’s association-governed residential communities should pass from the developer to the homeowners once statutory turnover requirements are met.
But affiliates of developer Prime Homes in Villa Portofino East are connected to the developer Larry Abbo‘S Prime Group And PMG Asset Services– have appointed their representatives and employees to the HOA board for the past two decades, according to the lawsuit filed by residents last month in Miami-Dade Circuit Court Edney Del Risco, Eliseo MorenoAnd Madeline Garcia.
The developer-controlled board and its attorneys have reportedly told the homeowners that the requirements for transferring control of the association have not yet been met.
However, Risco, Moreno and Garcia – who have co-owned a townhome in Villa Portofino East since 2022 – strongly disagree.
“They are not the only owners in the community who are concerned; they are the ones who chose to file,” their attorney says. Eduardo Gomeztells Realtor.com®
Transfer problems
Below Florida’s Homeowners Association Lawhomeowners will have the right to elect a majority of the association’s board of directors within three months after 90% of the lots in all phases of the community ultimately operated by the association have been transferred to members or other owners not affiliated with the developer.
Risco, Moreno and Garcia allege that the developer-controlled HOA improperly included the transferred land in the residential lot calculation to delay the transfer of control to homeowners.
According to the lawsuit, on June 26, 2024, the Villa Portofino East Community Development District transferred two parcels to Prime Hotel Group of Homestead, LLC.
Although these parcels are now zoned for commercial use as a location for a new hotel, the HOA reportedly continues to count them as residential parcels when calculating whether the legal threshold for homeowner control has been met or not.
“The developer now appears to be treating the same parcels in two different ways, depending on which calculation is favorable: residential when that helps extend the developer’s control over the HOA, and commercial when that helps justify the hotel expansion,” Gomez says.
That alleged double treatment is part of what the lawsuit aims to challenge.
“Our position is that the developer manipulated the number of parcels through a series of post-closing land transfers to artificially keep itself below the threshold for almost two decades,” Gomez said. “The math, as we read it, does not support continued control by developers.”
The lawsuit also revealed maintenance issues
The lawsuit also alleges that the developer-controlled HOA has failed to adequately maintain the complex.
“The complaint identifies, among other things, inoperable entry gates; an unsafe swimming pool, fountain, and pergola; broken paving paths; fence damage; and deteriorating stormwater infrastructure,” Gomez says. “The association is required to maintain these features according to the governing documents – it is the residents who fund this through their assessments.”
According to Gomez, the monthly HOA assessment was $285.05 as of 2026, but was reduced to $252.51 in April.
HOA turnover problems persist
Florida lawyer Chad D. Cummings by Cummings and Cummings Actwho is not involved in the case but has investigated the situation, tells Realtor.com: “The developer turnover process fails more often than most people realize. This was a major problem during the 2008-2009 recession when many developers went bankrupt, creating ‘zombie HOAs,’ and the issue is starting to resurface.”
Cummings says sales should be measured in months or years, not decades.
“The longer a developer is in control, the more financial risks accumulate for homeowners,” he says. “There is an inherent conflict of interest between developers who want to minimize costs to maximize their ROI and homeowners who want money spent to maintain the community, protect future resale value and ensure amenities and infrastructure are maintained.”
When developers’ turnover process fails, the obvious risk, according to Cummings, is the effect on property values.
“Any time we deal with a zombie HOA, property values are going to take a hit,” he warns. “Expert buyers will run the other way.”
Realtor.com contacted PMG’s attorney, Geoffrey C. Bennettbut heard nothing back.
