2023-12-17 21:29:41
Aerial view of damage caused by Hurricane Ian on the southern edge of the town of St. James, Friday, Sept. 30, 2022, in Pine Island, Florida. Ian made landfall on the southwest Florida coast as a Category Four storm on Wednesday afternoon, September 28, leaving affected areas with flooded streets, downed trees and scattered debris. MATIAS J. OCNER mocner@miamiherald.com
As Florida’s insurance crisis makes hurricane hardening more important than ever, consumer advocates have pushed to rein in a popular — but controversial — loan program that allows homeowners to pay for new roofs or impact windows through your property tax bills.
Some counties and tax collectors across the state have pushed for more clear reporting on a program that has generated hundreds of complaints from people who said they were misled about the costs or did not understand that the loan amounts to a tax lien. long term on your home.
Now, an agency that funds PACE construction projects is fighting back, arguing that individual counties have no legal right to force it to follow additional rules or even decide where it can operate.
The fight has led to a high-stakes lawsuit involving nearly half of the state’s counties, several of which have denounced the continued operations of a single quasi-governmental agency in Northeast Florida as “a danger.” immediate for the health, safety or well-being” of the inhabitants. Tax collectors from Alachua County to Palm Beach complained in emails and court records that the state’s expansion of the Florida PACE Funding Agency is “trampling” the rights of local governments. For now, Broward and Miami-Dade remain on the sidelines, but the outcome has big implications for two counties that lead the state in PACE contracts.
The Tallahassee case is shaping up to be an important legal test of the few but hard-won consumer protections already in place across the state. including new ones in Miami-Dade County, and, perhaps, the future of Florida’s PACE program. This is clean energy assessed by the property, a nod to what has been touted as a “green” program.
And it could also affect nearly 13,000 homeowners across Florida who recently signed agreements with Florida PACE Financing Agency for more than $500 million in home improvement projects, with no guarantee that the tax deal they agreed to will be met. will keep. You could potentially be hit with large bills from contractors or lenders instead.
The Florida PACE Funding Agency, for its part, launched its own public relations offensive, taking several tax collectors to court and promising to take the case to the Florida Supreme Court if the judge does not rule in its favor. favor.
Mike Moran, executive director of Florida PACE, strongly defended his agency’s actions, as well as the PACE industry itself. He argued that his quasi-governmental agency has its own authority to collect property taxes. He described the agency’s statewide expansion as a win-win for the state and for consumers, an opportunity for people who otherwise wouldn’t be eligible for conventional loans to make crucial repairs to their homes at a cheaper price (typically between 9% and 11% interest) than with a credit card.
Unscrupulous
Until last year, the PACE program worked like this: Groups like the Florida PACE Agency, which serve as intermediaries between homeowners and lending companies like Ygrene and Renew Financial, needed permission from a county to work within their boundaries.
Unlike a traditional bank loan, which is based on credit and financial records, PACE agreements are based on home equity. In exchange for cash to complete a construction project, PACE providers place a lien on the property and collect annual payments through the property tax bill, which is collected by a county property tax collector. .
The increase in the tax bill can be significant, in some cases 200% to 300%, and unlike a bank loan, non-payment of the tax bill can result in foreclosure.
As the program grew in popularity across Florida over the past decade, tax collectors began hearing complaints from residents who didn’t understand why their tax bills had increased so sharply or believed they had been enrolled in the program. under false pretenses by the contractors.
In response, several counties passed new consumer protection measures, such as limiting loans to the useful life of the product, requiring recorded phone calls and more comprehensive reporting forms; others did nothing, leaving a patchwork of protections across the state.
Then, starting in January, Florida’s PACE Funding Agency abruptly announced that it no longer had to follow any of those rules, thanks to a Leon County judge’s ruling.
A sentence changed the panorama
It was supposed to be a routine hearing, the same type Florida PACE agencies regularly go to to make sure they meet financial requirements, but instead of just asking the judge if his bond papers were in order, Moran asked him to rule whether Florida PACE needed permission from a local government to operate within its borders.
In his ruling, the judge said no, they did not need permission.
Moran said that gives the Florida PACE Funding Agency the right to operate in any Florida county, including those that explicitly banned the program; He also insisted that his agency already has strong consumer protection standards in place.
“We do all those consumer protections. There isn’t a single thing that anyone has asked us to do that we aren’t doing,” he told the Miami Herald. In court records, however, Alachua County said Moran fought “vehemently” against a new consumer protection it tried to enact in 2022 and Leon County said Moran negotiated with the county to modify some of its proposed protections the same anus.
Tax collectors stopped collecting
Tax collectors across the state have fought Moran’s moves, sending cease-and-desist letters, passing county commission resolutions and calling county attorneys and legislators. At least 30 tax collectors joined a lawsuit against Florida PACE over the issue.
“What a judge did in Tallahassee should never have happened in a bond-type hearing,” said Mike Fasano, Pasco County tax collector and a longtime critic of PACE. “That’s not what the Legislature had any intention of happening. “There was always supposed to be this interlocal agreement.”
As the fight spread to new counties, Florida PACE continued to enroll thousands of homeowners in counties across the state without their permission, including Alachua, Hillsborough and Palm Beach.
In response, some tax collectors said they would not collect PACE assessments added to their residents’ tax bills.
“I think the responsibility of the tax collectors is that we are only going to collect what is appropriate and authorized on the tax rolls. As it stands now, these assessments are not appropriate or authorized, so they are not being collected,” Collier County Tax Collector Rob Stoneburner told the Herald.
This has made Florida PACE strive to recover its investments and allay the doubts of its investors. In an October news release, Moran said bondholders and private investors withdrew funding from Florida.
“The consequences of this withdrawal are far-reaching, affecting tens of millions of dollars that were to be used to pay contractors who recently completed or are currently working on renovation projects; Additionally, many ongoing projects face uncertainty, potentially leaving homeowners in a precarious financial situation,” he wrote.
At that, Moran sued.
He took several tax collectors to court to force them to collect assessments he claimed were legally valid, based on the Leon County ruling. So far, judges have agreed with his argument in some counties, including Hernando and Sarasota, where he chairs the county commission and is running for tax collector, and disagreed with others, including Alachua, Bradford and Hillsborough. .
“We don’t petition another government authority to tell them to put it on the tax bill: we are the government authority,” Moran said. “There are billions of dollars of bondholders on the street in Florida that need to be returned and the property tax collectors need to put this on the tax bill. “It is not a complicated discussion.”
What the courts said
Experts said this PACE drama will end in two ways: either a judge rules that Moran is right or wrong, or the Florida Legislature changes PACE rules to resolve the dispute.
Stoneburner, the Collier tax collector, said tax collectors across the state need “a clear answer” about whether or not Florida PACE needs a county’s permission to operate there.
“Either they are right or they are wrong; “If they’re right, okay, in my mind it’s going to be the Wild West, because then all the other PACE providers are going to do the same type of thing and operate however they want,” he said.
But Moran said that even if the Legislature moves to fix the problem next session — or get rid of PACE entirely — he still wants the courts to intervene.
“If that curtain fell and PACE was gone, you still have a billion dollars from bondholders that need to be paid back,” he said.
That decision could come as soon as February, when the same Leon County judge whose ruling sparked the crisis agreed to revisit the debate, after a legal push by at least 30 tax collectors across the state.
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