Florida Bill Could Allow Homeowners to Dissolve Their HOA — What It Means for Communities Like Palm Coast

HB 657 proposes major changes to homeowners’ association rules and could give residents the ability to terminate an HOA under certain conditions.

Across Florida — including many neighborhoods in Palm Coast — homeowners’ associations (HOAs) play a major role in how communities operate. They manage shared amenities, enforce neighborhood standards, and collect dues to maintain common areas.

But a new bill moving through the Florida Legislature could significantly change that system.

The Florida House recently approved House Bill 657 (HB 657), a proposal that introduces sweeping changes to how homeowners’ associations and community associations operate. One of the most talked-about provisions would create a legal pathway for residents to dissolve their HOA entirely under certain conditions.

The bill was filed by State Representative Juan Porras (R-Miami), who described HOAs as a “failed experiment” and argued that Florida should strengthen protections for individual property rights.

According to the legislation, the state wants to ensure that in certain situations homeowners have the ability to terminate restrictive covenants that control their property.

How the HOA Dissolution Process Would Work

Under HB 657, dissolving an HOA would require significant homeowner support and a structured legal process.

The proposal outlines these steps:

1. A petition must be submitted
A homeowner who wishes to dissolve the HOA must submit a petition to the board that includes signatures from at least 50% of the HOA’s voting members.

2. The board must hold a meeting
Within 60 days, the HOA board must schedule a meeting for residents to consider the termination proposal.

3. A supermajority vote is required
At least two-thirds of all voting interests in the association must approve the termination plan for it to move forward.

4. If the vote fails
Residents must wait 18 months before attempting the process again.

What Happens If an HOA Is Terminated?

If homeowners vote to dissolve their association, the HOA board would then be responsible for winding down the organization.

This process could include:

• Hiring professionals to handle the liquidation of HOA operations
• Settling debts, contracts, and financial obligations
• Maintaining or repairing any association property during the process
• Defending or filing legal actions related to HOA affairs
• Selling association assets if necessary
• Collecting outstanding dues or assessments
• Distributing remaining assets to homeowners according to the termination plan

Once the process is completed, any remaining funds or assets would be distributed among members or handled according to the approved dissolution plan.

Additional Changes in the Bill

HB 657 also proposes several other updates to how HOA and community association disputes are handled in Florida.

These include:

• Removing certain presuit mediation requirements for community association disputes
• Creating a Community Association Court Program within circuit courts to better handle HOA-related legal cases
• Requiring new community associations created after July 1, 2026 to include specific homeowner rights language in their governing documents
• Requiring older associations to hold meetings to consider adopting similar provisions

Supporters say these changes could make dispute resolution easier for homeowners who feel trapped in lengthy legal processes with their associations.

Why This Matters in Communities Like Palm Coast

HOAs are extremely common throughout Florida, particularly in master-planned communities and newer residential developments.

In Palm Coast, many neighborhoods rely on HOAs to manage:

• Landscaping and common areas
• Community amenities like pools and clubhouses
• Architectural standards
• Neighborhood appearance guidelines
• Road maintenance in private developments

Supporters of HOAs say they protect property values and maintain neighborhood standards.

Critics argue they can become overly restrictive or difficult for homeowners to challenge.

If HB 657 becomes law, it could provide homeowners with a rare legal mechanism to reconsider whether their HOA should continue to exist.

However, dissolving an HOA could also raise new questions about who maintains shared property, infrastructure, or amenities afterward.

New Penalties for HOA Boards

Another provision in HB 657 targets how HOA boards handle termination efforts.

Under the proposal, HOA officers or directors could face penalties if they attempt to interfere with a dissolution effort.

Violations could include:

• Using HOA funds to campaign for or against a termination plan
• Failing to schedule a required meeting after receiving a valid petition from homeowners
• Concealing financial records or documents related to the termination proposal

If a board member is found to have violated these rules, they could face fines of up to $5,000 per violation and removal from office.

Supporters of the bill say these measures are meant to prevent HOA boards from blocking or manipulating the termination process once homeowners begin the petition effort.

What Happens Next for HB 657?

Now that HB 657 has passed the Florida House, the bill moves to the Florida Senate for consideration.

If it is approved by both chambers and signed into law by Governor Ron DeSantis, the legislation would take effect on July 1.

The legislation could have significant implications for Florida communities where homeowners’ associations govern neighborhood rules and property standards.

Frequently Asked Questions About Florida HOA Dissolution (HB 657)

Can homeowners in Florida eliminate their HOA?

Under the proposed Florida House Bill 657, homeowners may be able to terminate their homeowners’ association if enough residents support the plan. The bill requires a formal petition process and a supermajority vote before an HOA can be dissolved.

What percentage of homeowners must approve dissolving an HOA in Florida?

The proposed legislation requires at least 50% of HOA voting members to sign a petition requesting termination, followed by a two-thirds approval vote from all voting interests in the association.

What happens to HOA property if the association is dissolved?

If an HOA is terminated, the board must wind down its affairs. This can include selling association assets, settling debts, collecting outstanding dues, and distributing any remaining funds to homeowners as outlined in the termination plan.

Would property rules disappear if an HOA is dissolved?

In many cases, dissolving the HOA would remove the governing body responsible for enforcing covenants and restrictions. However, some property covenants or deed restrictions could still remain unless they are legally terminated.

Why do some homeowners want to dissolve their HOA?

Critics of HOAs argue that associations can become overly restrictive, impose fines, or create disputes between residents and boards. Supporters of the proposed bill say it gives homeowners more control over their property rights.

Why do some communities support having an HOA?

Many residents support HOAs because they maintain neighborhood appearance, protect property values, manage shared amenities, and provide structure for community rules.

Could HOA dissolution affect property values?

Opinions vary. Some believe HOAs help maintain property values through consistent standards, while others believe removing restrictive rules could make neighborhoods more attractive to certain buyers.

When could the Florida HOA bill take effect?

If approved by the Florida Legislature and signed into law by the governor, parts of the legislation could take effect in 2026, particularly provisions affecting newly created associations.

A Question for Palm Coast Residents

Many neighborhoods in Palm Coast operate under HOA rules, while others do not.

What do you think?

 Should homeowners have the ability to dissolve their HOA if enough residents support it — or do HOAs play an important role in protecting communities?