Almost 15 years ago, before this area was full of sinkholes, Paul Rosado's home in Regency Park started to form cracks.
A neighbor advised him to check it out. An insurance representative said fixing the damage would cost $75,000, but the home was only insured for $41,000. Plus, he knew of other neighbors who had sinkhole repairs that just caused more problems.
"We ended up getting the claim," said Rosado, 37. "We were entertaining the option of fixing it. Ultimately we said, 'These houses are old, let's just kind of wait it out and see.' "
He and his wife moved to another house, and they got a good deal because it also had unrepaired sinkhole damage. He still owns the Port Richey home and has converted it to a rental.
"Since then, sure a couple of other small cracks have appeared," he said. "But the house isn't falling into the ground."
Pasco County has 3,200 properties with evidence of a sinkhole but a repair status listed as "unknown" in property appraiser's records. Many received no repairs or minimal cosmetic fixes.
Those properties are a significant drain on Pasco's tax base. Once a home has a confirmed sinkhole, the property appraiser appraiser's office knocks 30 percent off the value to account for needed repairs or the risk of additional complications. Even after it's stabilized, the property value goes back to only 95 percent of the original figure.
All told, such unrepaired properties have removed $81 million from the county tax rolls over the past decade. Repaired properties lopped off another $32.7 million. In Hernando, which reduces values by half after a sinkhole is confirmed, the lost value is even more staggering — more than $280 million.
Wade Barber, Pasco's deputy property appraiser, said many homeowners are savvy about the unintended tax break.
"To be honest with you, the word's out on the street," he said. "When they find out they have a sinkhole, they make three calls. They call the insurance company, call their attorney and they call us to lower their value."
Using current tax rates, removing that chunk from the tax base means roughly $750,000 in lost taxes for county government and $835,000 for the school district. Other agencies, including Pasco Fire Rescue, cities and the Southwest Florida Water Management District lose smaller amounts.
"Three-quarters of a million dollars to anybody, including me, is a significant amount of money," said Commissioner Ted Schrader. "Especially when we haven't given pay raises in the past couple of years and we've had to lay people off. Those kind of numbers, when they all add up, can make a significant amount of difference."
Schrader said he would talk with the property appraiser's office to review the county's options to restore the value.
Some cases sound like simple cheating. Stories abound of homeowners who received a sinkhole payout and simply paid off their mortgage or bought a motor home. Meanwhile, they continue to live in their house.
"They were winning in two ways," said Lynne McChristian, the Florida representative of the industry-funded Insurance Information Institute. "They got cash and they got diminished value on their property to pay less taxes."
It's now harder for people to simply pocket sinkhole settlements. A state law passed in 2011 allows insurance companies to hold back a portion of the payments until a contract for repairs is signed. Deductibles for many policies have soared, giving homeowners a hefty financial stake in making repairs.
That law also required companies to cover only "catastrophic ground collapse" — the headline-grabbing chasms that can swallow homes. Traditional sinkhole coverage for cracks in walls, misaligned doors and other less noticeable damage is now optional, and premiums are rising.
The new law certainly had an effect. According to a report from Citizens Property Insurance, sinkhole claims through September 2012 were down 28 percent from that same point a year ago.
Lance Dietz's property is one of the thousands of sinkhole claims with an "unknown" repair status. But his situation is more unusual.
Up until a few years ago, he owned a 3,200-square-foot home on Skymaster Drive in Hidden Lake Estates. Now it's an empty lot.
Dietz, 61, filed a sinkhole claim shortly after a neighbor made repairs. He figured the problem didn't stop at the property line. A MetLife representative inspected the damage and estimated repairs would cost more than the home's insured value. So the company cut Dietz a check for the policy limit, about $400,000, and promptly canceled his coverage.
Dietz decided he couldn't live in a house with a possible sinkhole and no homeowner's insurance. He bulldozed the place.
A few months later, in April 2005, he used about a quarter of the settlement to pump grout into his lot and stabilize the soil.
"Our thought is still to go back to Hidden Lake," he said. "We're going to go back and build now."
His claim occurred just as sinkhole claims started booming along the Nature Coast. Citizens says 95 percent of the company's sinkhole claims in 2011 were from Hernando, Pasco, Hillsborough and Pinellas counties. Hernando had a whopping 49 percent of Florida's claims, and Pasco had about half that figure.
Pasco just completed a banner sinkhole year. The property appraiser's office logged 1,808 new sinkholes in 2012, slightly more than the earlier high of 1,781 in 2009.
"By anybody's measure, that's a big number," Barber said. "That's a huge number."
He added: "I guess the residents of Pasco heard Hernando was the sinkhole capitol of the state. We're pulling together. We're going to get that title back."
Lisa Barrus' home is also part of the official list of sinkhole homes with an "unknown" repair status. And she's not happy about it.
In September 2009, an engineering firm inspected her New Port Richey home after she noticed her pool deck drooping and cracks in her foundation. Five months later, she received a report. "They just said that it's natural causes, ground settling," she said.
She was relieved.
But the deck got worse. Screws connecting the deck to the home have popped off in some places because the deck has fallen so low. Tiles are falling off the pool. Barrus and her husband are retiring next year and want to sell the home. They called a foundation repair company.
Turns out the earlier inspection did not include soil boring and was essentially a "dog and pony show," she said. Two weeks ago, she filed a sinkhole claim with her new carrier, Citizens.
Meantime, the property appraiser reduced her home's value by 30 percent. All after she received a clean bill of health.
"We don't want to have our house labeled a sinkhole," Barrus said. "Now we're kind of worried. What is going on here? If there isn't (a sinkhole), great. If there is, we need to get it fixed and taken care of.
She added: "We'd like to move on, and it's kind of scary because we don't know how long the house is going to sit on the market with all this nonsense going on."
Lee Logan can be reached at [email protected]