County tax collector worries some homeowners could lose homes after signing up for risky program

ORLANDO, Fla. — There are concerns about a government-approved program designed to help homeowners make improvements to their properties.

The Orange County Tax Collector believes the so-called PACE program is being used to prey on the poor and the elderly.  PACE stands for Property Assessed Clean Energy.

The PACE Program is approved in the State of Florida and two other states for residential customers and in several more states for commercial customers.  On the residential end, it makes it easier for homeowners to finance energy efficient projects and to harden their homes against severe weather.  Homeowners interested in things like solar panels, electric vehicle charging equipment or a new roof can take advantage of it.   It’s been credited with saving energy and saving energy costs for consumers.

Orlando homeowner Ida Starks needed a new roof when she first heard about the PACE program from a solicitor a couple of years ago.

Starks told Action 9, “Because this was new to me, I didn’t move on it quickly. I thought about and prayed about it.”

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She eventually went ahead and financed a new roof on her Orlando home. According to Starks, she was told her payments would be delayed by 18 months, then she would to start paying around $200 a month.  But last year when she received her tax bill she was shocked.

“My tax bill was greater than $5,000,” she said.

Previously her bills were closer to $1,700.  Starks said she had no idea under the PACE program, the financing is attached to a person’s property taxes as a lien.  Her entire amount was due right away.

Starks said, “I would have saved the money had I known that this was the way it was going to be assessed, but this is not what they said to me.”

The confusion isn’t surprising to Orange County Tax Collector Scott Randolph.

Randolph said, “I think if you looked at it on paper, you’d go ‘That’s not bad. That’s not a bad idea.’”

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But Randolph believes it’s been used in some cases to prey on the poor and elderly with contractors convincing some people to sign up for something they don’t understand or can’t afford.

“I think unfortunately, it’s sort of taken the typical Florida turn of an unregulated industry that is capable of taking advantage of people,” he told consumer investigator Jeff Deal.

Right now, there are three agencies set up in Florida that are public-private partnerships to administer the residential PACE program.  It’s only available in cities or counties where PACE agencies have interlocal agreements.  The includes Orlando and Winter Park.  But Orange County hasn’t signed any PACE agreements for those living in unincorporated parts of the county.  Still, the tax collector’s office must apply those assessments to tax bills for PACE participants in the cities that have signed the interlocal agreements.

Randolph’s concern is more people are using the program and tax bills are skyrocketing.  Action 9 looked at data in Volusia County and Orange County and saw one case where a homeowner’s tax bill jumped by more than 25,000%

Randolph worries when they go unpaid, in two years, borrowers could see their homes sold at auction.

Randolph said, “When that happens, people will lose their homes.”

Consumer groups are also concerned, in July, twenty of them wrote a letter urging the federal government to require PACE agencies to determine a person’s ability to pay before signing them up.  In the letter they wrote, PACE products have often been “pushed onto consumers through predatory and fraudulent sales practices.”

Late night host and comedian, John Oliver even did an entire segment warning about the PACE problems while making fun of it.

But for Ida Starks, it’s definitely not a laughing matter.

Starks said, “I have maybe a $400,000 house sitting on this corner and I’m going to lose it over $5,000 because I don’t have that?”

State lawmakers in Florida have considered mandating more consumer protections for the PACE program in recent years, but the efforts haven’t gained much traction.  In Orange County, Tax Collector Scott Randolph said his office works to educate those who may be facing issues with this to try to help them through the process, but he believes the local municipalities should be offering more oversight as well.

The group that worked with Ida Starks, Renew Financial, believes PACE is still a good program for many and sent this statement from its VP of Government Affairs, Leah Wiggs:

“Renew Financial’s first priority is the homeowners and communities we serve.

The PACE program at its core is a powerful public policy tool that enables Floridians access to affordable financing options for essential home upgrades that may otherwise be out of reach for many homeowners.

Renew Financial only operates in a community after gaining approval from the local municipality. We understand that each community has different needs, which is why we are open and committed to working with local leaders to implement any additional consumer protections and safeguards to best serve the homeowners in that area.

Renew Financial has taken careful steps to update consumer protections, mitigate marginal foreclosure risks and provide safety measures to keep homeowners and their investments safe. We will continue to be advocates for consumers, and fight for meaningful protections for those we serve.”

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