Condo Wars “It’s All About the Documents”
By Hallandale Beach Mayor, Joy Cooper
August 25, 2022
A few weeks ago, I wrote two articles about the new Condominium Law changes that were adopted during the Special Session. I did not anticipate the emails and calls I would receive from many boards and condo owners thanking me for the update.
We all know or have heard about condo wars. It really has been exacerbated over the years because of State Legislation. In years past there was the ability to waive reserves by a vote of the unit owners. The wars ensued due to the fact residents were unwilling to “save” for future repairs.
The arguments included I already pay maintenance, I can save my money and pay when repairs come, they are a bunch of thieves on the board, we don’t need to do those repairs, they have no clue and are just getting ripped off by the engineer and worse I’ll be dead before they need a new roof. Sadly, we all know now how bad it can get.
I knew of many stories myself but hadn’t been directly involved with finding out all of the specifics until recently. One such story is that of one condo that has been under receivership for almost 3 years. It is one of those tails that you would see in a movie. I would call this movie “It’s All About the Documents.” Warning it’s a bit long and is going to take two articles but it is worth the lessons learned.
This condo was built in 1966. Residents were a mix of full time and part time. They had a resident board and owners were pleased with how the board was maintained. For years, they fixed what needed to be fixed. Painted the building, cut the lawn and even fixed the roof. But did they?
Over the years, the board changed. Some of the owners passed on and their children took over the units and some even participated on the board. Like many buildings, many of them were part time or day to day and were left with one or two owners to hold down the fort.
After 40 years, they did need to do a Building Inspection. An Inspection was performed by an engineer. The engineer did live in the building and was a licensed Florida engineer. Obviously, the onion had begun to be unpeeled. Residents were not happy and started a recall. They did not want to pay for repairs.
There was a recall challenge back in 2017. This is when it gets really unbelievable. Board meetings were a mess. Police even had to be called during meetings. The State Department of Business and Professional Regulations had to step in. I cannot mention any names at this time due to litigation, but a Representative from DBPR got involved in the recall and I mean involved. The Representative who was also an attorney stepped in and had the condo president sign a Power Of Attorney. Then the attorney had the board hire their spouse.
There were multiple bank accounts set up. Assets of the condominium were sold. What was worse was that things were not getting repaired. During one of the past hurricanes the water-cooling tower was blown down. The tower was replaced but the other was simply patched and painted. The most recent inspection showed that you could literally poke a hole through it with a pen.
Residents once again were stuck. There were no bills getting paid. What was getting collected in maintenance was not covering the bills. They ended up in court. There were two hearings. The first time, the attorney was not found at fault by a jury. After that case, the attorney filed a slander suit against the condo. The case was heard and no punitive damages were awarded. Currently, the case is being appealed. The attorney for the condo believed that the jury did not understand the complexity of condo law.
During all of this time, the condo ended up in receivership. The court assigned an attorney, CPA and manager of the condo, now they had a real mess to clean up. They even needed to go to court to have what bank accounts they could identify be released. They did not do a forensics audit but from what was analyzed, the CPA concluded that for over 10 years they were running on a $100 dollar a month per unit deficit. So, while everybody was happy since they were paying $375 a month, they really needed to be paying around $475, just to run the building.
The other major issue was they needed to pass an assessment during all this litigation in the amount of $1.7 Million. Without it they could not address the 40 and 50 year inspections. They were so late they were now facing being red tagged due to structural, plumbing and electrical problems. The catch was that their documents required a 100 percent vote of all residents to pass the assessment. As I said, it's all in the documents.
To Be Continued...
As always, I am available for your questions, concerns and ideas to help make our City a better place. Please feel free to reach out to my office at: (954) 457-1318. On my cell/text at: (954) 632-5700. Or email me at: firstname.lastname@example.org.