Wednesday, May 20, 2009

Condo associations dying as fees dry up

Article Courtesy of The St. Petersburg Times
By Marlene Sokol
Published May 18, 2009

Homeowner associations, the de facto local government in much of Florida, are getting desperate.

Assessment payments are as low as 50 percent in some communities, causing some board members to consider measures that might include publicly shaming those who are delinquent.

"When I tell you it is an unadulterated nightmare out there, I mean it," said Harry Burnard, who owns Qualified Property Management in New Port Richey, plus a side business that fronts the dues and collects the debts.

The problem exists nationwide, most notably in communities built during the boom years.
"I haven't seen bake sales yet or carwashes," said association attorney Robert Tankel of Dunedin. "But I have suggested that people who don't pay need to consider doing that. Sell their flat-screen TVs."

Things are so bad that the Southpointe condominium association in Orlando sent a letter to all of its members, listing units with unpaid dues.

"I thought I'd be getting a lot more rotten eggs," said Malcolm Galvin, an attorney for the association. "I was kind of amazed that most of the feedback was favorable to the association."

Glen Crest, a former condominium complex in New Port Richey, experienced so many delinquencies and foreclosures that the remaining owners could not pay the maintenance. Pretty soon they all fell into foreclosure as well, and now the place is deserted.

The urge to shame

Most area attorneys are advising their boards against any kind of public humiliation. "The nature of communities anymore is that nobody knows their neighbors anyway," Tankel said.

But it's been suggested at a lot of homeowner meetings.

IKare community newsletter publisher Karen Uhlig, when asked if she would have a problem with such a practice, said, "Personally, not at all. But professionally, I'd have to check for legal advice."

One of her clients, the Nassau Pointe townhome section of New Tampa's Heritage Isles, could be among the first to publicize delinquent accounts.

"We've been tossing the idea around," said board member Barbara Adams. "We don't want to do it, but we're just having little choice when they ignore us."

About 30 percent of her neighbors are not paying the $228 monthly fee. "In our community, it covers cable and water," she said. Dues also pay to landscape the grounds and repair the roof.

Uhlig, who serves on two boards in her own Wesley Chapel community, knows associations that are filing liens over very small amounts. Tankel advocates suing quickly instead of waiting for banks to foreclose, essentially beating them to the courthouse steps.

Some boards have members literally knocking on doors, a practice attorneys discourage.

"You never know when you are going to meet Mister Doberman, or Mister 9-millimeter," Tankel said.

There is a case on appeal where an association sued a man who invited the president up to the roof for a frank discussion about issues related to his condo, and was going to throw him off the roof, Tankel added.

Tampa real estate attorney Court Terrell agreed.

"What you tend to be met with is a very angry resident," he said. "People are strapped financially and under a lot of stress."

Not surprisingly, lawyers advise boards to use the legal process, beginning with a series of warning letters. At least half of the time, members pay up when they realize that the association could ultimately seize their home over a debt of $300 or $400.

"You can give up one Starbucks a week and pay that," Tankel said.

But some associations can scarcely afford to pay the attorney.

That's why Burnard says his Forclosure Solutions, which makes its profit from late fees and interest, is in great demand. "I have been approached by association after association after association," he said.

The impact varies

Just what the dues pay for varies among communities, as do the amounts and the impact when they go unpaid.

Uhlig's Barrington neighborhood, in Northwood, uses dues largely for landscaping. She pays $69.96 per month. It used to be $60.96, but the board had to raise the amount to make up for those who didn't pay.

Terrell has heard of lists posted in condominium lobbies.

"There are a lot of boards that have the urge, and rightfully so, quite honestly," he said. "If everybody else is paying and these people are still getting a lot of benefits, there is an urge for folks to say, 'Here are our bad actors.' They are riding the coattails, leeching off everyone else."

Complex 'imploded'

Even small debts can add up.

Southpointe, the Orlando complex, faced a deficit of $90,000 and the prospect of a special assessment when it sent out the list of delinquents, Galvin said.

In New Port Richey, things got so bad at the 32-unit Glen Crest condominiums that pretty soon no one could afford the dues, said Burnard, whose firm managed the place. "It just imploded on itself," he said.

Part of the problem was a block of absentee owners who bailed when housing values fell. One by one, the condos went into foreclosure and the residents moved out. Today the complex stands weed-strewn and empty, with boards on some of the windows.

While the Glen Crest situation is extreme, managers and lawyers worry that basic services in many communities will suffer as owners neglect their obligations.

"The community association operations are really the privatization of local government," Tankel said. "Government is getting out of the business of government."

Stepping into that role, he said, are volunteers who are elected by their neighbors.

"They have no salary and they have to do what's necessary to maintain the financial integrity in their communities," Tankel said. "And no one's bailing them out."

Tuesday, May 19, 2009

A Tale: How To Con The Condo Owners!

I have found the perfect way to make a fortune and the best thing is it’s easy. I just pretend I have a P.E. (professional engineer) license and go around condo buildings, see the board associations and talk them into a survey where I can tell them that their perfectly adequate balconies – that may only need a little repair, or not even that – will require full concrete restoration, costing them $million$. Since this cost will be borne by each condo owner, the board has the power (total power, in fact) to tell the owners it is an emergency or required maintenance. Of course, I will start with a much lower price, say $50,000, and then just keep adding extra costs and build up to a price of millions and millions. Just one condo will keep me in luxury but there are plenty around for the taking. I saw half a dozen high-rise condos next to each other with all the balconies removed last year – someone else got there first. Good for them, as it makes it easier for me.

Once I get into one balcony I will give them the bad news -- for them anyway, but not for me. I will tell the board association that we have to dig into their living rooms, which means replacing the windows and even the railings. I pretend to prepare them for the worst and say that I will only do it if it is absolutely necessary. When we take the balconies apart and dig into the living rooms, I will say we found that the rebars were rusted. Who will question the expert? The owners don’t know that some rust is “good” -- it will just look bad to them. Then the windows will be out of code and I will recommend some of my pals to do the work and get a “kickback” from them. Then the railings will have to come off as these will probably be out of code, too, and have to be replaced, meaning lots more work for me. I can handle plenty of business because I can just hire lots of illegal workers. It really is wonderful, just the same way the old roofers-or-pavers con used to work until people got wise; in fact, it’s easier than taking candy from a baby.

Life is great in Florida. Of course, this is not only where the wealthy come because they can afford it, but a place in the sun also attracts the shady characters. Among them are the clever folks that have made their money from ripping people off and are now retired but cannot resist this easy money, especially when they hardly have to do anything. They merely have to find a condo to buy into, be charming and helpful and get elected onto a board and then simply sign contracts galore. There is no comeback with the law protecting them with a series of loopholes. I do a bit of homework before I go into a condo building and identify the gullible and crooked, and then give them a great quote. Sometimes they don’t even ask for other bids, which is better because my price can be sky-high.

More good news: It doesn't matter if the balconies are not showing any telltale signs of concrete problems. I will just say that the “corruption” is going on underneath. Did I say “corruption”? Sorry, I meant “corrosion.”

They will believe me just like you believe the dentist when he tells that you your gums look infected so you better do something now or it may be too late. If you don't act quickly, not only will you lose your teeth, but you won't be able to have the work done without additional costs as your gums will have caused too many problems.

I will take the board members around and I will do a few taps here and there on the concrete or tiles. They don’t know that the difference in sounds can be normal. I will look perplexed and shake my head and say the concrete is becoming dangerous and that we need to dig into it. Any proof of the balcony being in good condition will have gone and so I am in the clear. This is the old-fashioned scare tactic from a professional, and since the professionals have such a bad reputation in Florida I won’t be alone. Any workman with integrity we will make look bad by under-pricing him at the beginning and then bring in colossal prices once we get to work in the building.

Of course, the owners and board members will believe me because I am the expert. I won’t be challenged, since everyone else seems to be doing it. The condo owners themselves can just get a loan for the $50,000-$70,000 they will eventually need, because if they don’t pay they will have a lien put on them. If they can't afford it, they shouldn't be living in a condo anyway, in my opinion.

Since we have a recession at the moment, even some unscrupulous realtors have gotten wise and bought themselves condos, wormed their way onto the board and manipulated some of the easily led so they can get kickbacks. With concrete restoration in mind, their commission for this type of work will be equivalent to a few years’ salary on a building with a few hundred balconies. Another scenario: If the condo is in a good position then just make sure the cost is far more than the condo owners can afford and bankrupt the association with their commission running into $million$. Of course, they will choose their building wisely. It’s not too clever to pick one with lots of members who are attorneys or professionals, better to go for the retired and meek. There are plenty of them around in this place where people have worked all their lives to live in comfort with lots of savings for me to spend.

A corrupt board member is great for me, as it saves me having to talk the condo owners into agreeing to the work. My presentation will be easy and approval a foregone conclusion. There we go again -- that word corruption. I price the job to include 25% extra so I can pay the corrupt board members money under the table and if they are not corrupt then they are generally just stupid and I get paid over the odds anyway. I really can't lose because nobody checks out what I am saying and many of the other engineers are selling the same “snake oil” to condo owners.

The owners or board don't know that you never have to take a balcony off as you just have to mix the concrete onsite. It is a simple procedure. They don't even know there will be signs if there is something wrong and any cracks should be “monitored” for a year and if there is anything wrong within about a year it will show up. But most of us “professionals” don’t like the word “monitored.” It costs us the contract.

One or two balconies fell down a few years ago, due to bad concrete, so it scares people. They don't realize that a simple test will show if inferior concrete was used to construct the building. Some idiots mixed sea water into the concrete in the 1960s and after about 30 years the buildings may be dangerous. It couldn't be better -- I can just say that your balcony may fall down if you don't do the work and then you could be sued. You will easily be swayed into paying for my services.

Other great news is that I don't have to guarantee the balconies for more than five years. Like other contractors, we don't need to give long guarantees, so I can use a mix that ensures the concrete doesn't last and the same scenario can be repeated over and over, bringing in repeat business. If the condo owners are suspicious, it doesn't matter. They will shout and moan, but they won't get anyone to pay the legal costs to sue the contractors. For some strange reason, they prefer to borrow the money or go into their savings rather than make a fuss so the ones that do complain get beaten down and ostracized within the community. As a grand finale, the fact that I am unlicensed simply doesn't matter.

Of course, I will be using illegal aliens that cannot speak English. My work may be shoddy, but no problem there, as the crooked board members will give me great references, won't they? They have to, because I gave them a kickback! I will just steer the new business to the corrupt or stupid associations. Not the unit owners, of course, or they will expose my shoddy work.

Life is great in Florida, The Sunshine State. Since it has a constantly changing population, I can work for years on this scam.

Have a nice day. I will!

We only want to do the work that should be done on our condos. We don’t want to avoid regular maintenance just to save money, but we are not willing to be seriously ripped off either.

This story may sound farfetched, but it is what has been happening to me with our “Condo Hell” so I put this story together to show how ridiculous it is. It is taken from interviews with contractors, condo owners and associations both good and bad. I have been fighting this situation for over three years and I am embroiled in a court case with our association at the moment.

No one would have believed that the engineer was not licensed, not even the planning department.

We have fought against all odds and had some great help from people we have met through condo attorney Inger Garcia, Jan from Cyber Citizens For Justice, Inc., Steve publisher of Fort Lauderdale City News and other friends that have ferociously fought for us and helped us keep our focus.

Amazingly, we have even found a few licensed engineers and contractors that are not in the so-called fraternity/club in Fort Lauderdale -- engineers and contractors that are NOT going round doing unnecessary concrete restoration. Due to either corruption or ignorance, there may be other owners that are going through the same thing in Fort Lauderdale and other towns in Florida.

If it happens to you, you won’t know what’s hit you; and even worse you may actually believe it was correct to remove your balcony. You may be correct, but it is unlikely.

In fact, the truly poverty-stricken persons have been proven to have more protection than condo owners.

Should lawmakers take more money from Condominium Trust Fund?

Posted by Daniel Vasquez on May 18, 2009 12:20 PM
To help offset the huge budget deficit, lawmakers may end up tapping the Condominium Trust Fund of another $7 million.

They gouged the fund of $26 million for the same reasons in January.

Yes, Tallahassee's leaders are cutting from everywhere to stem the financial bleeding, but Rep. Richard L. Steinberg, D- Miami Beach, is pleading with Gov. Crist to veto the sweep - removal - of the money, which is funded by condominium owners who pay $4 a year for the fund, which is then used to pay for the Office of the Ombudsman and free educational seminars.

Tough call. There is a proviso that should Crist veto the $7 million sweep of the Condo Trust Fund, it will be taken from the education budget.

Steinberg made a plea today in a letter to Crist. See below:
What do you say? Should condo owners be asked to shoulder more taxes to help out?

From Steinberg:

Dear Governor Crist: I write to urge you to veto the sweep of more than $7 million from the Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund to the General Revenue Fund.

The Condominium Trust Fund is funded by a $4 per unit annual fee on every condominium and cooperative unit in the state. These funds provide vital regulation, mediation, and education services for the residents of more than 20,000 condominium and cooperative associations throughout Florida.

Further, there is bipartisan support to use these funds to provide incentives to condominium owners to harden their coastal condominiums to better withstand hurricanes. For instance, House Bill 359 and Senate Bill 1344 would have authorized condominium owners to apply for My Safe Florida Home program grants to retrofit their properties for storm preparedness.

During these difficult economic times, Floridians must be able to protect their financial investment and get the information they need about the financial issues facing condominium associations. Condominium and cooperative should not be asked to shoulder a disproportionate and unfair share of the tax burden to balance Florida’s budget.

Diverting funds from the Condominium Trust Fund will hurt more than 1.3 million condominium and cooperative owners who deserve protection, not a disproportionate tax burden.

Therefore, I urge you to veto this unconscionable sweep. Additionally, because budget proviso language demands that the Florida Education Finance Program be tapped to exercise this veto, I also recommend that you ask the Legislature to identify another source of funding for the FEFP.

Respectfully, Richard L. Steinberg State Representative District 106

Monday, May 18, 2009

In crazy condo world, rules trump common sense

Article Courtesy of The Sun Sentinel
By Michael Mayo
Published May 17, 2009

Reason No. 1,721,389 why I never want to live in a condo: The tale of Tony and Ida Pizzuti of Dania Beach.

Tony is 83, Ida 81. For the last 10 years, they have rented a two-bedroom unit at the Meadowbrook Lakes complex.

"Best tenants in the world," said Laurie Martin, the unit's owner.

But when the Pizzutis' lease expires at the end of June, the elderly couple might get the boot. Why?

A no-rental rule at the condo went into effect in 2004, a restriction that hasn't been previously enforced against the Pizzutis.

"They don't want to leave, and we don't want them to leave," said Martin. "I just want them to live the rest of their lives in peace."

Said Ida: "Laurie always says, 'This might be my apartment, but it's your home.' "

Whether it stays their home is now in the hands of attorneys, and the matter might end up in court.

Making things worse: The Pizzutis have a son dying of brain cancer in New Jersey, where they will spend the month of June.

"Like we don't have enough things to worry about, and now we have to worry about moving?" said Tony, a retired construction worker.

Condo association attorney Charles Otto said he is sympathetic to the Pizzutis' plight, but the condo has a right to enforce the no-rental rule when the lease expires.

The Pizzutis have rented the condo since 1999, when Martin and her husband moved to Hollywood. As the Pizzutis ate dinner in March, condo association president Rubens Onofrio knocked on their door.

"He told us that when our lease was up, we'd have to leave," Tony said.

"My father came back to the table looking like a ghost," said Maria Pizzuti, their daughter who lives in Hollywood. "At this point in their lives, relocating would be a big disruption."

On March 9, Onofrio sent a letter to Martin saying the Pizzutis would have "to vacate…by June 31 (sic), 2009," citing the July 2004 rental prohibition.

This was the same Onofrio who called the Pizzutis "an asset to our building" in an August 2004 letter approving a lease extension after the no-rental rule went into effect.

A month before the condo board passed the rental prohibition, the Pizzutis signed a five-year lease.

"Once they signed that lease, we couldn't put them out," said Onofrio, 83. "But now there can't be renters. We're not doing anything wrong."

Onofrio said the Pizzutis are the only renters in the 32-unit building.

In an April 27 letter to Martin, condo attorney Shaun Zaciewski wrote: "The association must enforce its documents across the board and prohibit all renting." He wrote that the association "previously allowed your tenants to stay out of courtesy."

Martin's attorney, Gerald Cowen, replied that the Pizzutis should be "grandfathered (in) by virtue of the association's acquiescence over the last four years."

Condo attorney Otto said he'd like to find a reasonable solution, but condo law doesn't allow unequal treatment and selective enforcement.

"If we let them stay, then other owners might complain if they're not allowed to rent," he said. "We don't want to open the door to other problems."

Common sense says the Pizzutis, who celebrate their 62nd anniversary today, should be allowed to stay in the place that's become home.

But in South Florida's crazy condo world, common sense always loses.

Sunday, May 17, 2009

Redneck Test - Are You A Redneck?

Redneck Test - Are You A Redneck? Have you sported a mullet? Or thought about collecting old cars on the lawn? Then test yourself with this Redneck Quiz to see if you are a Redneck! Hurry! You hate going to the bathroom in the middle of the night because?

Because I hate getting out of my warm bed.
Because after I put my shoes on and grab a jacket, I need to find the flashlight.
Because if I had remembered to leave an empty beer bottle by the bed, I wouldn't have a problem. After a "roll in the hay", you turn to your lover and say:

"That was nice"
"I love you"
"Roll down the window"
"I noticed you got another tattoo" You always make sure you record this show.

Grey's Anatomy
The Office
WWE Monday Night RAW
NASCAR Who do you admire most?

The President
My parents
Jeff Foxworthy
Jack Daniels Do the directions to your house include one or more of the following phrases?

"...so then you turn off the paved road"
"...and you make a right at the sign for Bernie's Worms"
"...and we'll be parked right next to the apple tree."
None of the above. Prom is coming up. What are you most excited about?

This year we've got a limo.
This year my outfit is perfect.
This year my date has all their front teeth.
This year they'll have daycare there. Sometimes you can tell a Redneck just from their name. Which of the following is your name most similar to?

Billy-Ray, Ricky-Bobby, Cletus, Bubba, Jim-Bob, etc.
Bobbie-Sue, Dannielynn, Chastity, Charmaine, etc.
Roger, Carl, Stewart, William, Archibald, etc.
Elizabeth, Catherine, Madeline, Priscilla, etc.

Redneck Test - Are You A Redneck?

Redneck Test - Are You A Redneck? Have you sported a mullet? Or thought about collecting old cars on the lawn? Then test yourself with this Redneck Quiz to see if you are a Redneck! Hurry! You hate going to the bathroom in the middle of the night because?

Because I hate getting out of my warm bed.
Because after I put my shoes on and grab a jacket, I need to find the flashlight.
Because if I had remembered to leave an empty beer bottle by the bed, I wouldn't have a problem. After a "roll in the hay", you turn to your lover and say:

"That was nice"
"I love you"
"Roll down the window"
"I noticed you got another tattoo" You always make sure you record this show.

Grey's Anatomy
The Office
WWE Monday Night RAW
NASCAR Who do you admire most?

The President
My parents
Jeff Foxworthy
Jack Daniels Do the directions to your house include one or more of the following phrases?

"...so then you turn off the paved road"
"...and you make a right at the sign for Bernie's Worms"
"...and we'll be parked right next to the apple tree."
None of the above. Prom is coming up. What are you most excited about?

This year we've got a limo.
This year my outfit is perfect.
This year my date has all their front teeth.
This year they'll have daycare there. Sometimes you can tell a Redneck just from their name. Which of the following is your name most similar to?

Billy-Ray, Ricky-Bobby, Cletus, Bubba, Jim-Bob, etc.
Bobbie-Sue, Dannielynn, Chastity, Charmaine, etc.
Roger, Carl, Stewart, William, Archibald, etc.
Elizabeth, Catherine, Madeline, Priscilla, etc.

Take this Quiz Answers on Monday

Dumb Quiz - Are You Dumb?

Dumb Quiz - Are You Dumb? Hey Dumby McDumbDumb...how dumb are you? Super dumb or just a little dumb? Take this fun Dumb Quiz to see! We challenge you to a Dumb Quiz! If all of Australia sank into the ocean, which of the following would become the world's new largest island?

Greenland
New Guinea
Borneo
Great Britian
Sumatra
None of these Which of the following times occur after 3pm?

9pm
Midnight
9am
3pm
All of the above Two U.S. coins are worth a total of $0.30, and one of them is not a nickel. What are the coins?

This is impossible.
One nickel, and one quarter.
Three dimes.
Two dimes and two nickels. When you adjust for inflation, which is worth more:

1908 pennies
1960 pennies
1990 pennies
2006 pennies
2007 pennies
Any penny melted-down and sold as scrap metal John digs a hole that is 2 yards wide, 3 yards long, and 1 yard deep. How many cubic feet of dirt are in it?

0
1
2
3
6
9 If the Vice President of the United States died, who would be President?

The Speaker of the House.
The Senate Majority Leader.
The Secretary of State.
The President.
The President Pro Temp. Who is dumber, boys or girls? What is your dumb opinion?

Like most guys, I am quite smart thank you
Hey, just because I am a girl, it doesn't make me dumb
Men like me have bigger brains. It's science!
I am a girl, and clearly smarter than my guy friends