Families seeking $1.7 M in damages stemming from mold contamination
By Deborah Goonan, Independent American Communities
I have found that small news journals can be a rich source of information and in-depth coverage of local politics, community disputes, and lawsuits that evolve from dysfunction in association-governed housing.
The following article from The Register-Guard highlights three lawsuits against a 30-unit condo complex – known as The Farm – in Eugene, Oregon.
The back story on these disputes presents a laundry list of most everything that can go wrong with condominium living, from original construction to present-day dysfunction of management, resulting in litigation seeking total damages exceeding $1 million.
For that reason, it’s a story worth reading.
Three families sue Eugene condo complex, alleging mold, other contamination due to water leakage
By Christian Wihtol
NOV. 5, 2017
Three families that rented units at a condominium complex on Cal Young Road in north Eugene are seeking nearly $1.7 million from the owners and managers of the property, claiming that extensive water leaks and mold damaged their health and possessions.
The three lawsuits filed in Lane County Circuit Court relate to The Farm on Cal Young, a 30-unit complex built by Eugene developers in 2008 as the nation was sinking into the Great Recession.
Unlike larger association-governed communities with hundreds or thousands of housing units, The Farm consists of only 30 modestly upscale townhouse style condominiums, located near downtown Eugene.
Small communities like The Farm are common in many parts of the country – much more common that large master planned communities or 30-story luxury condo towers.
The Farm is like many small association-governed, common interest communities. It was developed by a few locally-based private real estate investors. One of those investors is a developer by the name of Kent Jennings, who now manages The Farms condo association. Bennett Management Company LLC manages more than a dozen residential and commercial projects in the Eugene area. The other investor is a former Eugene city Councilor, Gary Papé, who owns and manages 12 separate units in the Association under his own property management company, GA3D LLC.
So, from the start, co-investors planned long-term revenue streams from managing and leasing properties, in addition to selling some of the condo units to third parties.
In many parts of the country, it is common to see small housing communities developed by real estate brokers, insurance brokers, physicians, legacy landowners, or anyone with capital to invest in real estate. Quite often, the primary developer or someone in the family will manage the community association well beyond completion of the project, holding onto a significant share of units as rental properties.
In many cases, there is never a true turnover of the association from the developer to the homeowners, because the developer or a close affiliate continues to own units, as well as manage and maintain the association.
From what I can surmise from the article, The Farm’s condo board, if one officially exists, is almost certainly controlled by Jennings and Papé.
Of the remaining units not owned by one of the two original developers, some are owner-occupied, others are landlord-owned and leased to tenants. Many of the leased units are managed separately, creating a system that requires the condo unit owner’s manager to coordinate maintenance requests with the manager for the association, Bennett Management Company LLC.
All three lawsuits at the The Farms are brought by tenant families, not condo owners. Two of those tenants used to rent units from Papé‘s company, GA3D LLC. The third tenant rented a unit through a private owner’s management agent, Trio Property Management.
According to the lawsuit, the members of the tenants’ households suffer medical problems that resulted from living in mold-contaminated condo units. Also, tenants had to dispose of much of their personal property and replace it.
Predictably, when tenants of Papé‘s units discovered leaks and filed complaints about extensive water damage and mold, tenants claim that the problems were not adequately addressed. Within several months of discovering mold, the tenants moved out.
However, when the third tenant contacted Trio Property Management, testing was done and harmful mold contamination was discovered. The tenants were advised by Trio to move out.
Now the condo association and management companies are facing several costly lawsuits, totaling at least $1.7 million, if, in fact such high dollar value damages can be justified in court.
Owner occupants are obviously in the minority at The Farm, but there is no doubt that their assessment dollars are contributing to insurance policies funding the defense of their association and possibly Bennett Management Company.
The article does not mention if unit any owners have filed complaints or lawsuits about leaky roofs, windows, and mold at The Farm.
Governing documents for The Farm and other HOAs managed by Bennett are not posted publicly, and are only available for purchase.
One of great ironies in this case is that, under Oregon laws, tenants seem to have greater legal rights and protections that condo owners.