Larry Abbo's Prime Group stands accused of operating a "zombie HOA" for two decades in Florida, collecting resident dues while maintaining tight developer control over the homeowners association.
The lawsuit alleges that Abbo's company has prevented the HOA from transitioning to resident control, a common practice when a development reaches maturity. Instead of releasing governance to homeowners, Prime Group has allegedly kept decision-making authority in developer hands, allowing it to continue extracting fees from residents without surrendering operational control.
HOA zombie situations occur when developers retain power beyond the initial construction and sales phase. Residents pay mandatory association dues but lack meaningful say in how money gets spent or how the community operates. The developer effectively uses the HOA as a revenue stream while avoiding the accountability that comes with resident-elected boards.
For current residents, this arrangement means continued monthly or annual HOA payments flowing to a developer-controlled entity rather than a resident-elected board that responds to homeowners. Property values can suffer when buyers learn they'll never gain governance control. Sellers face disclosure requirements about the HOA structure, which complicates transactions.
For prospective buyers, this becomes a crucial due diligence issue. A zombie HOA signals red flags. Reserves may be underfunded because developers have no incentive to build proper financial cushions. Special assessments could hit suddenly. Residents cannot vote out board members or challenge spending decisions through a representative process.
Prime Group's alleged two-decade grip suggests a systematic strategy to maintain revenue control. Florida law typically requires HOAs to transition to resident governance within a specified period after development completion, but enforcement and timelines vary. The accusation points to either a failure of regulatory oversight or a company skilled at working within legal gray areas.
This case has broad implications for Florida's booming real estate market. Buyers must examine HOA documents and governance structures before purchasing. Existing residents in similar