The Coming Tsunami of Community Associations – Will We Have Enough Lawyers?

Nearly all new residential developments (except apartments) will require a PUD or MPD, creating an owner association to govern the community and its Covenants, Conditions & Restrictions (CC&Rs).

PALM COAST, FL – August 22, 2020 – The recently reported the purchase of lots in Sawmill Creek by four production builders not only gives us an insight into the economics of future development but also shines a spotlight on the direction of nearly all future residential development in Flagler County and Florida. A tsunami of homeowner associations and condominium associations is coming.


Builders' purchase price of over 125 vacant lots in Sawmill Creek, a new development in Palm Coast, ranged from $55,000 to $66,000 each. Lot widths are 50 feet to 60 feet. The average cost per lot-frontage foot was $1,100. The cost of developing a “new” lot from raw land is more than double the median price of a standard ITT-platted infill lot in Palm Coast. More than 13,000 of these typically 10,000 square foot Palm Coast lots remain vacant.

Matanzas Woods is the existing Palm Coast subdivision on the east side of Route 1 north of Matanzas Woods Pkwy, and opposite Sawmill Creek, making a literal side-by-side comparison both relevant and valid. Since the beginning of 2020, 30 vacant ITT-platted lots have been sold in Matanzas Woods for a median price of $26,750. The lot widths varied from 80 feet to 115 feet, averaging 87 feet. The Matanzas Woods lots sold for an average of $307.00 per lot frontage foot, merely 28% of the narrower Sawmill Creek lots price ($1.100 per frontage foot).

New developments do not and cannot happen under current zoning. That is because all the good contiguous uplands have already been developed. ALL new development must deal with existing wetlands and ever-stricter conservation regulations. A typical grid layout of streets and avenues on which traditional zoning is based cannot fit on available Florida land, forcing developers to apply for a zoning change to Planned Unit Development (PUD) or Master Planned Development (MPD).

The cost of rezoning plus the “time is money” cost of delaying construction boost developers’ costs. All increases in stormwater runoff created by the added streets, driveways, and rooftops must be contained within the development, requiring curbs, gutters, and stormwater retention ponds. Not the same for ITT lots which have existing roads, swales, and utilities.

No more conveying roads to the city or county. Tax increase-limited municipalities no longer accept the burden of maintaining roads and other infrastructure in newly developed communities. PUD and MPD development agreements specify that the developer shall form an owner association to maintain the new community’s common areas, including roads, retention ponds, etc.


So how does a developer of raw land compete with builders who build single-family homes on infill lots; also called scattered lots? The developers offer community differentiating features such as gated entry, security, clubhouse, pool, dog park, tennis, pickleball, marina, etc. They include sidewalks, buried electrical service, streetlights, curbs, and gutters (a result of a required stormwater management system) rather than swales. They also offer buyers, willing to pay a premium, lakefront lots, the lakes being retention ponds created for the aforementioned stormwater management system.

Buyers in newly developed planned communities not only pay a premium for their development lot but are also obligated to pay ongoing association assessments and succumb to living under the association’s Covenants, Conditions & Restrictions (CC&Rs). (That is why they are often referred to as “deed-restricted communities.”).

As the cumulative costs of the developer’s “differentiators” grows, the pressure to build larger, feature-rich homes grows too, allowing the developer to spread the cost burden over higher-priced homes. The unintended consequence of “mandatory” PUDs and MPDs is that it is impossible to build “affordable” single-family homes within them. The price gap between infill building and MPDs will continue to grow.

In March 2019, I wrote “Commentary: Confronting the Illusion of Affordable Housing” which dispelled the myth that affordable single-family homes could be built in Palm Coast, even on less costly infill lots. Palm Coast’s Land Development Code is quite restrictive. It requires all single-family homes to have at least 1,200 square feet and a two-car attached garage; basically a three or four-bedroom home with at least two full baths. Stringent minimum architectural requirements further limit affordability.

The epiphany that all future new development will require de facto PUDs or MPDs becomes a troubling revelation, once the concept sinks in and the repercussions are realized.

For instance, city staff and elected officials tossed a planning board recommendation to modify the Palm Coast Land Development Code to optionally allow single-car garages. (Clearly, not all households have two or more cars.) The reduction would cut the home’s construction costs by roughly $15,000 to $20,000. Staff and elected officials argued that while the Land Development Code lacked the flexibility in residential zoned areas, a developer could propose smaller homes and one-car garages in an MPD.

The argument sounds valid until one remembers that MPD lots already have a $30,000+ price disadvantage due to development costs. It also ignores the implicit pressure to build larger homes in MPDs to recover the higher development and amenity costs.

A tsunami of Community Associations

All new residential developments (communities), excepting apartments, will require the formation of an owners’ association to manage the common elements: homes, townhomes, and condominiums. Each will require a board of directors for governance. All but the very smallest will require oversight by a licensed Community Association Manager (CAM), usually an employee of a larger property management company.

Florida law makes a distinction between homeowner associations, condominium associations, and cooperatives. I live happily in Tidelands, a community comprised of both condominiums and single-family homes. There are two associations, a homeowner association for the single-family homeowners and a condominium association for the condo owners. The two associations jointly manage the shared entrance, security system, and street maintenance through a Cost Share Committee comprised of representatives from each board. The condominium association administers the Cost Share Committee. Each board has a separate property management company. It’s complicated.

Such complexity is not uncommon. Grand Haven has a master homeowners association to govern the several separate CC&Rs of the several communities within Grand Haven. A separate condominium association is responsible for the 24 condominium units. Grand Haven is also a Community Development District, much like a municipal government but without police powers. CDDs are often created for large developments because they allow the sale of tax-free municipal bonds to build the community infrastructure. The CDD Board is responsible for the common elements.

Community associations are far more common in states with the most population increases over the past 40 years, mostly in the south and west. Many newcomers are surprised by the constraints imposed by deed-restricted communities. Few fully understand the rules. Many don’t read the association documents before moving in, but the CC&Rs can dictate how many cars you can have, where you can park them, what type of flooring is permitted, what color your window treatments must be, how many and what types of pets are allowed, guest policies, amenity use, and so much more.

Real estate and community association laws are very state-specific. Even if a new resident has previous experience living within an association or even being a board member, if they did not move here from within Florida, they are essentially foreign nationals when they arrive.

Keeping a qualified board

Association boards typically have three to five members. The position is unpaid but carries fiduciary responsibilities as well as countless obligations. It also requires a significant time commitment. I have served on multiple homeowner association boards and a condominium board, two years as president. I’ve served as a non-resident board member on behalf of a developer. When asked why anyone would ever want to be on an association board, I reply, “The only thing worse than being a member of your board is NOT being a member of your board.” A dysfunctional board can mess up a community in a heartbeat.

Simply getting people to run for a board position can be challenging, particularly for small communities. Getting qualified people even more so. Performing the duties of a board member can put an individual at odds with their neighbors, their friends, and even with their family.

Florida legislation passed in 2018 limiting terms of condominium association directors to eight consecutive years does not help this issue. Experience counts. The required training course for board members is at best superficial, however increasing the required training would exacerbate the dearth of volunteer applicants.

Terms are typically only one or two years. It is not uncommon to have a quorum of newly elected, inexperienced directors each year. It is also not uncommon for new members to run for office on a single issue, joining the board with a personal agenda rather than with a desire to serve the community. Anyone who has served on a board or observed board meeting dynamics has at least one war story to tell.


Fines or suspensions (of use of association owned properties such as amenities) for rules violations must follow the Florida statute. A 14-day written notice with a subsequent opportunity for a hearing are required. Individual association documents may require additional steps. These requirements are well intended to limit abusive actions by renegade boards, but they are overly cumbersome and curb the ability of boards to respond timely to situations with short-term vacation renters.

Medium-sized and large communities lean on professional property management companies with their licensed CAM’s for guidance, advice, and day-to-day operations, but the property management is only as effective as their assigned CAM. Florida requires CAMs to be licensed but the license course is extremely limited; a 16-hour class with a test to pass.

The Florida Bureau of Economic and Business Research estimates that Flagler County’s population will increase by nearly 52,000 residents by 2045. Most of the increased population will find themselves living in deed-restricted communities governed by owner associations.

Facing so many hurdles, it’s not a stretch to predict increasing conflicts between owner associations, the residents they govern, the property management companies they hire, and the association’s vendors and suppliers (lawn maintenance, etc.).

Will we have enough lawyers? (I never thought I would say that.)

1 reply
  1. Irina Trudova
    Irina Trudova says:


    I just sold my house in Rivergate and feel such a relief. For almost four years I observed every other house to go on sale, a huge turn over due to the super strict rules and violations of residents privacy. You feel like you are in a fish tank being watched 24/7, HOA members make rounds every morning and afternoon , one tough rule is reenforced by another.. Actions speak better than words. People are leaving like nowhere. Gated community never again.

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