Palm Beach County sues PACE provider after it refuses to abide by consumer protection rules

Mike Diamond, Palm Beach Post
·4 min read

County lawyers are seeking an emergency injunction to prevent Florida Pace Funding Agency (FPA) from doing business in Palm Beach County after the agency refused to abide by new rules designed to protect consumers.

The Property Assessed Clean Energy (PACE) program allows low-and-moderate income homeowners to improve their homes without upfront costs. But those loans are not free and they have to be paid back through one's tax bill. Eligible projects include solar panels, roofs, air-conditioning systems and even seawalls.

The Florida Pace Funding Agency, one of the PACE providers operating in Palm Beach County, obtained a ruling from a circuit court judge in Leon County that said it is free to operate in Florida without having to comply with county ordinances. County lawyers say the Leon County Circuit Court judge overstepped his bounds and did not have the right to make such a ruling.

A worker installs a new roof on a home as part of a special program that allows consumers to improve their homes without upfront payments. The loans are paid off through assessments that become part of their tax bill. County officials have sued a provider for refusing to abide by regulations designed to protect consumers.
A worker installs a new roof on a home as part of a special program that allows consumers to improve their homes without upfront payments. The loans are paid off through assessments that become part of their tax bill. County officials have sued a provider for refusing to abide by regulations designed to protect consumers.

In November, Palm Beach County commissioners added consumer protections and oversight to the program in response to complaints from homeowners that they were unaware of the impact the loans had on their property tax bills. Failure to make payments could result in a home being foreclosed upon.

Jamy Dinkins, FPA’s lawyer, said he does not understand what the emergency is. Palm Beach County knew for months that FPA was going to terminate its agreement with the county, he said.

FPA is the only provider in Palm Beach County that has decided not to comply with the new set of rules. There are three other providers. Between March 12 and April 11, FPA originated 136 loans worth $4.4 million without complying with the new consumer protections. The new set of rules require disclosures to homeowners that:

  • A lien will be recorded against their properties and that PACE assessments will be collected the same way as real estate taxes.

  • Failure to make payments could result in the home’s loss through foreclosure.

Regenia Herring, the executive director of Palm Beach County’s Criminal Justice Commission, has questioned whether PACE providers are preying on the vulnerable, particularly people of color. She told The Post she had an elderly relative that nearly lost his home because he was unable to keep his tax bill current, thanks to the impact on the tax bill because of a PACE loan.

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County commissioners unanimously voted to seek the injunction. They also called on staff to issue a news release cautioning homeowners to not seek PACE loans through Florida Pace Funding Agency. The news release was never issued, and efforts to seek comment from the county attorney were unsuccessful.

As for telling consumers not to do business with it, Dinkins said: “There could be consequences down the line for that.” Dinkins called the county’s lawsuit an effort to get around a judge’s opinion.

How does the PACE program work?

PACE providers tout the program as an easy way to finance home improvements. Eligibility is determined by the equity in one's home; credit scores are not a factor. The program offers a way for low-and-moderate income homeowners to make needed property improvements that they otherwise would not be able to do, according to Dinkins.

But sometimes the PACE portion of a tax bill can be higher than that part of the tax bill to support government operations.

The Florida Pace Funding Agency, in its letter to the county, called the provisions in the new ordinance “overreaching” and accused the county, “at the behest of Tax Collector Anne Gannon,” of imposing stringent regulations on PACE providers.

Pinellas County is also seeking an emergency injunction to block FPA from operating there.

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Tax Collector Gannon has been a long-time critic of the program, objecting to the requirement that her office collect payments for PACE agencies through tax bills. Other tax collectors throughout the state have also criticized PACE agencies for the same reason. Gannon told county commissioners that she will no longer process the loans for Florida Pace Funding Agency since it is not adhering to the new ordinance.

As to when the courts will take up the issue, County Attorney Denise Coffman told county commissioners it is not clear how quickly that will happen, noting that it depends on the court’s schedule. Dinkins said FPA wants to have the case heard quickly as well but noted that it will not allow “the county to railroad its rights.”

Mike Diamond is a journalist at The Palm Beach Post, part of the USA TODAY Florida Network. He covers Palm Beach County government and transportation. You can reach him at mdiamond@pbpost.com. Help support local journalism. Subscribe today

This article originally appeared on Palm Beach Post: County suing PACE provider over energy-efficiency financing program