The nation’s largest homebuilder, D.R. Horton, engaged in deceptive practices that forced the bankruptcy of the homeowners’ association for Majorca Isles in Miami Gardens, The Real Deal (South Florida real estate news) reported yesterday. Following a three-day trial, Bankruptcy Judge A. Jay Cristol entered a judgment against D.R. Horton and its employees for $16.3 million in damages, including $12.5 million in punitive damages, and said the company violated Florida’s Deceptive and Unfair Trade Practices Act. Bankruptcy Trustee Barry E. Mukamal of KapilaMukamal, LLP, and his counsel John Arrastia of Genovese Joblove & Battista, worked for more than four years on the case, representing the Majorca Isles Master Association, a homeowners association created by D.R. Horton as part of the planned 681-unit community Majorca Isles in Miami Gardens. According to Mukamal, D.R. Horton appointed its employees as the board of directors of the Majorca Isles Master Association until the association was turned over to the homeowners. During that time, D.R. Horton allegedly did not make a serious effort to collect assessments from the unit owners, and because it had failed to keep useful financial records, was unable to identify whether units had paid or not. Instead, D.R. Horton allegedly shifted the collections from the master association to other condominium associations, in a breach of the directors’ breaches of duty and loyalty.
