By Deborah Goonan, Independent American Communities
Even luxury condominium associations face financial risks. HarborView Towers condo association in Baltimore’s inner Harbor recently filed for bankruptcy.
The tower of 249 units was constructed in 1993. But in 2010, a penthouse owner, Paul G. Clark, sued the association when a leaky roof caused extensive damage to his unit, including mold infestation. The matter was settled in Arbitration in 2011, but the condo association failed to fulfill its obligations, so Clark sued again. In 2012, a judge found HarborView association in contempt of court, and ordered payment of $1.2 million in damages, as well as requiring the association to make repairs to the roof, facade, and other exterior and common elements of the HarborView Tower. The Association appealed, but ultimately lost in August 2015.
Clark has yet to receive his entire settlement, so the matter ended up back in court once again. This time, a judge ordered a $609,000 garnishment of the condo association’s bank account.
That’s when the association’s board decided to seek bankruptcy, citing that they have recently completed almost $8 million worth of exterior repairs and renovations. Combined debts to creditors are reportedly over $10 million.
This condo horror story makes a person wonder why the association would wait at least 5 years to begin making repairs to the roof and building facade. Wouldn’t it have been far easier and less costly to simply fix the leaks when Clark filed his initial complaints with the Association?