Property Assessed Clean Energy (“PACE”) programs have become popular in many states including Florida. These PACE programs are expressly authorized in Florida under Section 163.08 of the Florida Statutes. Specifically, PACE Programs are created and approved by special taxing districts and their partnering local government members to assist property owners who want to finance energy efficiency, renewable energy, and wind resistance products on their homes with the aim to lower utility bills and greenhouse emissions. However, it has recently come to light that these programs have been ripe for fraud by bad actors, namely unscrupulous contractors looking to take advantage of program weaknesses. Thus, Florida homeowners need to be vigilant either when approached with a PACE program opportunity, seeking a PACE improvement, or even following the completion of a PACE improvement.
The majority of PACE program fraud comes in one of two ways. First, bad actors will conduct a door-to-door campaign misrepresenting the terms of a PACE transaction looking to lock in homeowners and seek excessive payments for improvements above market value. For example, bad actors will go door to door looking for elderly homeowners or homeowners not proficient in English and make representations that improvements can be made for “free” as part of an unspecified “government” program when in reality, the homeowner is fraudulently induced into agreeing to finance an over-priced construction project. The costs of such improvements are then inflated to an excessive level for greater financial gain by the bad actor. Another common scheme is for the bad actor to forge signatures on a second alleged PACE improvement that was never performed following a legitimate transaction. For instance, a contractor will provide services pursuant to a valid and agreed to contract for a PACE improvement. Following such transaction, the bad actor will create a second false agreement, forge signatures using the first agreement documents, and create fake emails (typically one letter or number off to make it look identical) to forge financing agreements using an e-signature program. This scheme is carried out with the hope the homeowner will not discover the second improvement on their tax bill.
Homeowners are not without legal recourse in these situations. This firm has not only brought lawsuits against the contractors for fraud, but claims are also brought against the financing company and special taxing district for claims ranging from rescission to negligence with the aim to seek the return of funds paid to date, removal of any liens against the property, and removal of future assessments. The financing companies will of course push back claiming they have sufficient consumer fraud protections, but this is typically not the case. On occasion, the contractor has a track record for fraud; yet, the financing company and special taxing district will push the deal anyway. If you are a homeowner that has discovered a tax assessment based on an improvement never performed or that was fraudulently induced, you have legal remedies.