By Deborah Goonan, Independent American Communities
The real estate industry often promotes condominiums as an affordable and low maintenance lifestyle. But today’s post provides yet another example of an affordable condo association nightmare.
The Hamptons at Metrowest, Orlando, is a prime example of everything that can go wrong with an apartment to condo conversion. For example, when the conversion began in 2000, construction companies applied a defective stucco veneer over wood-framed multifamily buildings. The shoddy construction resulted in water intrusion and wood rot.
But, even though the Hamptons Condo Association was awarded $20 million in a lawsuit against the developer, it proved to be insufficient to repair and replace exterior surfaces of 770 (yes, that’s seven hundred seventy) units.
As previously noted in 2015 post on IAC, based upon source articles, experts estimated the total repair bill would approach $70 million. At the time, the condo association had racked up $4 million in code violations from the City of Orlando, and was deemed “unfit for human habitation.”
So, the condo association insists that special assessments have been necessary to cover the gap in the actual cost to repair each structure in the association.
According to today’s referenced report in the Orlando Sentinel, the City has, in the past, forgiven more than $2 million in code enforcement fees. But, because the condo association, managed by First Service Residential, has been so slow to make repairs, it now owes $3.5 million to the City for building code penalties.
Neither affordable nor carefree
Keep in mind that owners purchased their “affordable” Hamptons condos prior to the 2007 recession, when mortgage financing was almost guaranteed, even if a buyer couldn’t verify income.
When the real estate market crashed, resulting in plummeting real estate values and a spike in unemployment, many unit owners in the Hamptons at Metrowest defaulted on their mortgages and stopped paying their condo assessments.
Foreclosures were common — by condo association as well as lenders. The Association ended up with many of its foreclosed units, renting them to tenants to recoup unpaid assessments, at least until the lender finally foreclosed.
When the real estate market was hot, buyers paid up to $250,000 for their units. Today, condo units are selling for less than $140,000.
Owners and residents are frustrated with the slow progress of rebuilding, difficulty of parking, and rising costs. And with ongoing construction noise and dust, as well as rising condo assessments, buyers aren’t exactly eager to invest in the Hamptons at Metrowest.
Too big to fail
City officials say they continue to fine the Hamptons condo association for taking so long to do repairs.
But that isn’t prompting the association to pick up the pace. The truth is, the association has a cash flow problem, and there’s not enough money to pay contractors.
For its part, the City claims it doesn’t want to foreclose on the association, described as “too big to fail.”
But the City does not acknowledge the fact that it played a large role in creating the Hamptons at Metrowest fiasco. First, it approved the condo conversion of the massive multifamily home community. Then, city official issued occupancy permits after failing to identify poor construction standards.
Several years ago, unit owner Howard Fox created an Unofficial website for the Hamptons at Metrowest, which chronicles years of dysfunction. Fox has been highly critical of the board and management company.
He and the condo association have been embroiled in litigation for several years, and most recently, a judge ordered Fox to reimburse the condo association more than $100,000 for attorney fees.
When Fox didn’t pay, the condo association got a court order to enter his home and seize all of his possessions, according to a separate report in the Orlando Sentinel. The condo owner, who has since moved out of his now-barren condo unit, has long been accused of harassment by the condo board.
However, the condo board and management company yet to been held accountable for their own apparent failures to manage money and make timely repairs to condo structures and common areas. Nor has the condo board taken responsibility for wasting precious financial resources on protracted litigation.
Worst of all, the condo conversion developer got away with reimbursing the HOA and its members for a very small fraction the actual damages and hardships they continue to endure.
All in all, a stunning example of injustice.
Metrowest condos rack up $3.5M in fines for construction defects
By Paul Brinkmann, Orlando Sentinel
May 24, 2018 7:00 AM
For years now, construction crews and scaffolding have been common around many buildings in The Hamptons at Metrowest, Orlando’s largest condo complex, while the landscape in many areas is bare and dusty.
The Hamptons has struggled to overcome construction mistakes, chiefly rotting wood beams and panels that weren’t properly sealed during the original construction dating to 2000. Water damage also has led to electrical hazards, split ceilings and cracked facades — all of which led to huge city fines.
The sprawling complex of 770 units on 70 acres on Robert Trent Jones Drive in west Orlando has racked up $3.5 million in code enforcement fines, one of the highest totals ever in the city.
But collecting those fines has proven to be difficult so far. The city already forgave about $2.3 million in old fines in 2015, but they’ve grown again to much larger than that, according to the city.
Built as apartments, the community was one of many in Central Florida converted into condominiums as real estate prices spiked in 2005. But the condo converter went bankrupt, and owners sued when they began finding construction problems.
Board members of the condo association have argued they did their best to address violations, but they also faced $3 million of unpaid association dues during the economic downturn. To raise cash, the association foreclosed on condo owners who were delinquent and rented out those units. It also levied special assessments on the remaining owners.
Read more (video):
Sheriff’s office seizes property of MetroWest man who challenged condo association
Paul Brinkmann, Orlando Sentinel
A legal feud between a MetroWest condo owner and his condo owners’ association escalated over the Memorial Day weekend, as armed deputies entered Howard Fox’s home with a judge’s order to seize all of his belongings.
“I’m basically homeless now,” said Fox, who is staying with family temporarily. “The house was completely empty, so I couldn’t live there. All that was left was the fridge and the carpet.”