A Florida PACE finance company said it will urge the state Supreme Court to force several Florida tax collectors, including Palm Beach County’s Anne Gannon, to add consumers’ home-repair bills to their tax rolls.
Mike Moran, executive director of Florida PACE Funding Agency, said in a conference call on Monday that the tax collectors’ refusal to add assessments for home improvements to their consumers’ tax rolls is causing bondholders that finance the programs to withdraw funding for its improvement programs from its agency.
The refusals are also causing uncertainty for property owners looking to fund qualifying improvements such as new roofs, air-conditioning units, impact windows, HVAC systems, emergency generators and solar systems, he said.
PACE stands for Property Assessed Clean Energy programs.
PACE financing allows homeowners to pay for improvements with no credit check and no money down by tying financing to their annual property tax bills. But critics have accused contractors offering PACE financing of omitting critical facts, including that failure to make payments can result in consumers losing their homes through foreclosure.
Gannon is one of six Florida tax collectors named in a news release by the agency as causing a “critical funding crisis” by refusing to collect Florida PACE’s fees, according to the release. The others are in Volusia, Duval, Alachua, Pasco and Hillsborough. The news release does not mention Broward or Miami-Dade counties.
Palm Beach County is suing Florida PACE Funding Agency over the agency’s interpretation of a Leon County judge’s ruling in October 2022 that it says obligates all tax collectors to add assessments to tax bills.
The ruling was a “judicial validation” of a bond validation that affirmed that Florida PACE Funding Agency is a special purpose local government throughout the state that has the right to recoup spending through tax-roll assessments, Moran said.
But Palm Beach County disagrees, saying Florida PACE no longer has the right to assess costs through its tax rolls because it allowed an interlocal agreement with the county to expire in January 2023.
That agreement contained consumer protections approved by county commissioners in November requiring PACE finance agencies to disclose that a lien will be recorded against their properties and that PACE assessments will be collected on property tax rolls, the Palm Beach Post reported in May. Also included was a statement warning consumers that they could lose their homes through foreclosure if they fail to make payments.
In a lawsuit filed in May, lawyers for Palm Beach and Polk counties said the Leon County judge overstepped his bounds. The counties were never made parties to the bond validation proceeding, the lawsuit argues.
Gannon, a longtime PACE critic, announced in a news release in early October that her office was joining the lawsuit that seeks to prevent Florida PACE from entering contracts with consumers in Palm Beach and Polk counties.
Moran on Monday said a decision to seek Supreme Court review of the question depends on the results of the counties’ challenge.
Since 2015, Florida PACE has financed more than 18,000 improvements and provided more than $570 million in funding, a Florida PACE news release said.
Without the ability to assess property tax bills, homeowners are left with limited options to fund improvements, Moran said on Monday.
They can pay cash, borrow from family members, get a Home Equity Line of Credit, or use a credit card, he said.
Homeowners without cash or strong credit often end up using a credit card with an interest rate of 29%, far more than the 9% charged on average by Florida PACE, he said.
A news release from Florida PACE accused the holdout tax collectors of going “rogue” and committing what it called “a clear violation of Florida law.” On Monday, he said they were acting as policymakers rather than complying with a state law that he says tax collectors have no discretion to decline to collect properly imposed fees.
Prior to the October ruling, Florida PACE operated by entering interlocal agreements with individual counties. Moran said those agreements became “labor intensive” to maintain, with counties asserting their own controls, imposing fees for unrelated purposes, and even dictating font sizes of language in contracts with consumers.
Florida PACE’s decision to cancel the interlocal agreement “is cause for consumers to use caution when entering into PACE financing agreements” with the agency, Gannon said in an Oct. 5 news release.
Moran said that if tax collectors are unwilling to add assessments to tax bills in their counties, it’s unsure how contractors, such as roofers, will be paid for work completed under Florida PACE Finance contracts, he said.
“Anything that deviates from that, and we’re in uncharted waters,” he said. “Either way, a lien is filed onto that property (by the contractor). If not through PACE, they’ll have to come up with an alternative way to get that roofer paid.”
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at .
