Condo Wars - Part 2 “It’s All About the Documents”
By Hallandale Beach Mayor, Joy Cooper
September 1, 2022
Last week I began to tell the saga of a local condo. I have left off names due to the fact they are still in an appeal process over slander. Over the course of 5 years, they have been struggling with board instability, recalls, president resignations, a husband wife legal team that set up shop in the building without the residents knowing they were married and lastly receivership.
In my opinion this saga actually started when the building was turned over to the unit owners in 1966. “It’s all in the documents.” Their documents required 100 percent of the unit owners to cast a vote to be able to pass an assessment. Obviously the elected board was tasked with running day to day operations and able to charge maintenance like all buildings. This regulation meant any large building improvement would need to be voted on by all or put onto the monthly bill in a lump sum.
According to the court-appointed receiver who is a CPA with over 20 plus years in condominium accounting showed that the condo had run a deficit for years. While there was not a full forensic audit the CPA went back painstakingly through what checking accounts, bills, payments and records they could find or access through court orders. Accessing accounts took months and with our Police intervention. The CPA calculated the board had run the building on an average of $100 Dollars per month per unit for almost 10 years.
Apparently, like many condo boards, they did not want to increase maintenance. They prided themselves on having low fees. When they had to fix items, it was maybe a few thousand dollars here and there for painting, patching and only replacing broken items.
The receiver, attorney and manager had to go back to the judge many times. They requested bank accounts access. Some were personal accounts set up by presidents to receive and send condo assets. The major request was to exclude deceased unit owners from the vote. Finally after plenty of work and going unit owner to unit owner a $1.7-Million-Dollar assessment was passed. Next, they had to negotiate and enter into contracts with vendors.
In addition to the assessments, they had no reserves. They had many bills that were months behind and unit owners with past due payments. They had to pass an additional flat fee of $5,000 and increase the monthly maintenance. They had success with collection with only one unit taken into collection and eventually paying in full and another filing bankruptcy. They finally thought they were beginning to see the proverbial light at the end of the tunnel and then COVID-19 hit.
Now it gets really weird. While all of this was taking place a unit owner called to report code issues in their unit. There were plumbing leaks, sewage backup, crumbling walls and paint peeling. Now the manager had to deal with code hearings. There were reports of the unit owner placing an outside hose in the unit. Ironically, this was the one unit that did not pay and had to be taken to court.
They went to the magistrate for the violations and believed the case was put on hold until they could get permits. This was not what happened. They were given time to file permits but when this did not take place, another hearing was scheduled. Due to COVID-19 there was a scheduling snafu and mailing addresses that were not updated by the manager. They missed a meeting and the magistrate started fines.
By 2021 they were in the process of permitting. Surfside happened and everyone was on high alert. Every city like ours began to robustly review their 40-year inspection processes and began following up with ones that were submitted to see if work was completed. Obviously, this building did not do all the work. They were now being faced with a red tag situation.
With the assessment in hand, the plumber began to submit plans. The problems with the plans were two-fold. First, we had started to change over our technology. We also were dealing with COVID-19 and reduced staffing levels. During that time some contractors, not all, were having problems working with the system. This particular permit was being rejected due to not addressing structural issues. They were told three times and by spring nothing happened. Then the permit commutations ceased and our Building Official started to look into a Red Tag.
Residents were now extremely concerned that no work was being performed and now due to material costs they were being faced with another $5,000 bill. They were lucky a bank lent them $1.7 Million originally, since they were in receivership, many banks would not touch them. So all other major expenses were being billed directly.
At this point, the unit owners were getting elected officials involved. I was invited to attend a Zoom Meeting over July to see how I could help. I committed to have a joint meeting with our Staff from Code Enforcement, our Building Official, the CPA, Attorney and the City Manager. They were not aware at the time, but this was their last chance before I along with Commissioner Taub were going to the judge. The meeting lasted over 2 hours. I could not believe the story and was compelled to share it with our readers.
At the conclusion of the meeting there was finally an understanding and movement forward. The plumbing contractor and building contractor were at the meeting and a full permit package was submitted for the cooling tower and plumbing. This was the most critical project that needed to be resolved.
The Electrical Inspection Report was reviewed and it was found that many items could be handled independently as repairs rather than lumping them all into one permit, saving money and cutting time. Originally five years ago, the painting project was not that extensive. After time, deterioration grows exponentially. There now were much more structural issues that were cited and did require expanded permit reviews.
Over the past years, I have heard these sagas over and over. This was a real eye opener for me and it was the first time I ever heard condo docs required a 100 percent participation in a vote. Even with a vote we can see repairs are not guaranteed. Recalls due to fights over needing repairs truly put condos at risk. This is why I am 100 percent behind the new regulations. Responsibilities when living in condominiums do not stop at your front door and maintenance does not pay for major repairs. Sadly, if left to dysfunctional buildings, tragically another Surfside could happen.
I like to tell residents there are typically many ways to get from point A to B. It does not mean one is right and the other is wrong. The goal is the same, to address repairs. All repairs must be done to South Florida Building Codes. That is where the City comes in. We do not run buildings. Even then there can be an array of product designs and solutions. I also like to share my opinion that cheaper is rarely better and in the long run can cost more money.
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 at my office: (954) 457-1318. On my cell/text at: (954) 632-5700. Or email at: firstname.lastname@example.org.