English
Français
Deutsch
Italiano
Русский
Español
简体中文
हिन्दी
日本語
In 2019, Collier County pulled the plug on a controversial financing program for home improvements following reports of abuse by unscrupulous contractors.
The program is back – and county leaders aren’t happy about it.
Known as the Property Assessment Clean Energy, or PACE, program, it is designed to help homeowners pay for energy efficiency and storm-hardening upgrades, but it can come at a high cost, with higher interest rates and higher default penalties than a traditional home loan.
Property owners put nothing down and pay the costs back over time through a voluntary assessment on their tax bill. The special assessment automatically becomes a first lien on any property — putting both the borrowers and mortgage lenders at risk, if owners are hit with a bill they can’t afford.
Eligible home improvements include new roofs, air-conditioning systems, solar panels, water heaters and impact-resistant windows and doors.
After a few years of little to no activity in Collier County, the Florida PACE Funding Agency, one of the districts that provides financing, sprang into action this year. The agency had recorded nearly 40 liens for property improvements in the county through early September.
On Tuesday, Collier commissioners agreed to send a cease-and-desist letter to the district, for operating “in conflict with board policy.” The action appeared on the consent agenda, so the board did not discuss it.
The Collier County Tax Collector and the Collier County Property Appraiser asked the board to send a letter “as soon as possible” after noticing an uptick in liens, or special assessments.
They offered up this as an example of what they discovered: The owners of a single-family home in Golden Gate, valued at $316,000, will pay a total of $7,919 in special assessments next year, following two rounds of PACE financing, with interest rates ranging from 7.25% to 8.99%. Including their property taxes, their estimated tax bill for next year comes to $8,735.
In a phone interview, Tax Collector Rob Stoneburner explained that because county commissioners voted to end the program on the residential side years ago, he’s refusing to collect their associated assessments for the Florida Pace Funding Agency.
“That’s something they are going to have to figure out,” he said.
He reasons the collection method isn’t authorized by the county, so he’s not authorized to do it.
“I just don’t stick anything on the tax notice,” Stoneburner said.
Previous coverage:Habitat CEO: Contractors targeted its homeowners for pricey loans in Collier County
And:Collier pulls the plug on PACE financing program, at least for now
Funding agency argues it can operate wherever it wants in Florida
The Florida PACE Funding Agency has taken the position that it can offer financing wherever it wants in the state, based on a recent court decision. Late last year, a circuit judge in Leon County – home to Florida’s capital – ruled the agency is free to operate in the state, without having to abide by local laws.
In unincorporated Collier County, the PACE program is limited to commercial, industrial andcommercial multifamily properties by ordinance.
Abuses were only reported on the residential side, with accusations of predatory lending that put people at risk of losing their homes, and claims of fraud by contractors looking to capitalize on the program by targeting the elderly and the poor.
Collier commissioners voted 3-2 to end the program in May 2019, then later reinstated the commercial part, which isn’t nearly as popular, or contentious.
In Collier, Florida PACE Funding Agency didn’t record any assessments for residential projects in 2020, or 2021, and had just one in 2022. Then came a wave of them in 2023, starting in January.
“The agency was authorized by the Legislature and its charter to provide PACE funding solutions statewide. Subsequent to a confirmation last fall by a court that the agency has the authority to impose assessments across the state, the agency determined to resume imposing assessments in Collier County,” said its attorney Jamy Dinkins in an email.
Collier isn’t alone in its dilemma.
Other Florida counties that have either banned the financing program, or haven’t authorized it within their boundaries, have seen a proliferation of loans by the Pace Funding Agency over the last year, which they aren’t happy about either.
In neighboring Lee County, property records show the agency has recorded more than 225 liens since January. The county has not approved any PACE programs for the unincorporated area, but a few cities have, such as Cape Coral.
The agency continues to offer loans across Lee, despite a cease-and-desist letter the county sent in June. The letter demanded that it “immediately stop executing new financing agreements” for property within its jurisdiction, without an interlocal agreement, or it would be forced to seek “judicial intervention” to protect its residents.
“The agency’s mission is to provide PACE funding to any property owner who wants to use it,” Dinkins said.
Other counties fighting to stop PACE financing for homeowners
Several counties in Florida have already sued the Pace Funding Agency in an attempt to stop it from financing any other projects, including Palm Beach and Hillsborough. The agency has fought back, with a few lawsuits of its own, seeking to force tax collectors to collect its assessments when they refuse to do so.
“To date, four counties have brought suit against the agency to seek to overturn the court ruling from last fall. None of them have yet survived a motion to dismiss,” Dinkins said.
After learning Collier County planned to send a cease-and-desist letter to the agency, he said the lines of communication are open, but his client hadn’t heard anything formal yet about changing its operations in the county.
“We welcome productive dialogue with the county as to how we can both serve our mutual constituents,” Dinkins said.
In response to critics of the program, he said: “Anyone who suggests that the agency is engaged in ‘predatory lending’ has not taken the opportunity to review the facts, or is attempting to mislead. First, the agency does not make loans — that would be unconstitutional. The agency imposes assessments on property in exchange for the reciprocal benefit to the property of qualifying improvements that promote hurricane resistance or energy resiliency for that property, specifically.”
In addition to protections, such as confirming a property has no tax delinquencies, mortgage delinquencies, or involuntary liens and that the amount of the assessment doesn’t exceed 20% of the market value of the property, for residential properties, the agency conducts “multiple recorded telephone calls” to ensure the owners understand the terms of the assessments, including annual payment on the tax bill, and that they are satisfied with the work performed,” Dinkins emphasized.
“We provide a right to cancel the assessment to each property owner even after they’ve signed the paperwork, and of course allow early payment without penalty at any time. The agency’s rates are well below rates charged by other methods of paying for home improvements, including credit cards or personal loans, and are competitive with home equity rates,” he said.
PACE program has a bad reputation in Collier County
The PACE program doesn’t have a good reputation in Collier, based on homeowners’ experiences a few years ago.
North Naples resident Elena Mola, a corporate attorney, has been one of the biggest critics of the program in Collier County.
Based on months of research, Mola made a long list of allegations about PACE-certified contractors back in 2019. Her claims included charging excess prices, forging the names of homeowners on documents and recording tax assessments in excess of 20% of the fair market value of a home, in violation of state law.
Mola started looking into the program after hearing shady contractors might have targeted the most vulnerable residents — including seniors, disabled veterans and non-English speakers — and deceived them about PACE, signing them up for financing they didn’t understand. At the time, Ygrene Energy Fund was the main provider of the funding, taking the brunt of the attacks on the program.
Even though the funding is coming through another district now, Mola said it doesn’t make her any more comfortable with it.
“The illegal marketing of PACE ‘loans’ has been an ongoing problem,” she said in an email. “I have even received marketing calls at my Naples home from contractors attempting to sell home improvement services through such PACE financings. When I question them about the legality, they simply hang up (and probably go to the next caller on their list).”
She’s happy to see the county is aware of the “problem” and taking proactive steps to address it, including refusing to collect the PACE assessments.
“I certainly question the wisdom of any county ever agreeing to freely lend its name and resources to collect what have been described as “mortgage loan payments” conveniently packaged as “first priority property tax liens” on behalf of any private company, especially for a program such as PACE that has been the subject of so many investigations, legal actions, penalties and consent decrees by local, state and federal agencies and authorities,” Mola said.
A few years ago, Lisa Lefkow, the CEO of Habitat for Humanity of Collier County, said she suspected unscrupulous contractors of preying on its low-income owners, trying to sell them pricey “loans” they couldn’t repay. Luckily, she said, the nonprofit identified the problem before it got out of hand.
“We actually had only a small number of homeowners who ended up with PACE liens,” she said in an email. “We were able to stop many before they were bound.”
While the program has resurfaced in the county, she said, fortunately, Habitat’s homeowners aren’t a target this time.
“We do not have families that are impacted by PACE,” Lefkow said.
Read the full article here
