Notable HOA, condo & co-op lawsuits (Jan. 2020)

By Deborah Goonan, Independent American Communities


Post summary:

HOA won’t fix sinkhole undermining a townhouse; City sues HOA for its gate blocking access to public road; homeowners sue developers, alleging chemical contamination; condo owner file deconversion lawsuit; Mayor sues POA; condo owners overpaid for trash services; condo owners still waiting for flood insurance money after Hurricane Harvey. 



HOA won’t fix sinkhole in common crawl space, owner’s townhouse unlivable

Doug Ridley owns a townhouse in an unnamed HOA-governed community in Santa Clara. According to his attorney, Craig Kisylia, the Ridleys are suing their HOA, which is not accepting responsibility for a large sinkhole that opened up under their townhouse in 2018.

Kisylia explains that the sinkhole appears to be caused by an old water well. Water from the well is bubbling up into the common area crawl space just below the family room of Ridley’s house.

The Ridleys and were renting the home in 2018, when their tenant alerted them to standing water in the laundry room. After the sinkhole was discovered, the tenants were forced to move out.

Months later, the home remains unlivable, and at risk of collapse if the foundation fails.

Loss of rental income

The Ridleys were counting on rental income from their mortgage-free townhouse to supplement their retirement income. Instead, they’re paying an attorney to sue their HOA, while their house sits vacant and unusable.

The HOA’s attorney, John Hill, isn’t commenting on the status of the dispute while litigation is pending. But, clearly, the HOA is trying to make the sinkhole the owners’ problem.

Mr. Ridley expresses deep disappointment that his HOA is not willing to defend or help him. And he’s also surprised by the HOA’s confrontational response.

Unfortunately, avoidance, confrontation, and cost-shifting are typical reactions from HOAs across the nation.


Water well underneath South Bay home leads to sink hole, legal dispute
By Jesse Gary | Published January 22, 2020
Santa Clara | KTVU FOX 2


County sues HOA for blocking access to public road

Rock Creek Association, which represents homeowners in Wild Rose Ranch subdivision north of Redstone, claims to own a portion of a road that provides access to a public park.

The HOA installed a gate to block public traffic last August. Terry Knapp and Phil Youngman, RCA’s acting co-presidents, claim that the HOA blocked off the road, because it got tired of cleaning up after pedestrians and cyclists.

The board also says the HOA doesn’t want to be held responsible if someone gets hurt on their property.

But Pitkin County commissioners argue that the road is, and always has been, open to the public. The county wants a judge to order the HOA to remove their locked gate barrier. The lawsuit also asks for triple damages from the HOA.


Redstone road closure leads into lawsuit, confrontation
News | January 24, 2020
Jason Auslander


Did developers try to hide chemical contamination of soil from home buyers?

Ten homeowners are suing developers of Aventura Isles, claiming the defendants never disclosed the presence of toxic chemicals on their homesites.

Prior to its development in 2008, the land was a golf course that used certain pesticides, including arsenic, which are no longer permitted under EPA standards.

The owners’ lawsuit says that developers failed to record property restrictions related to the chemical contamination, including a prohibition on the use of groundwater for human consumption.

Developers deny liability

Developers say they followed Miami-Dade County requirements to dilute chemical contamination of the site by mixing the top two feet of soil with clean soil.

The Defendants insist there’s no health risk to residents of Aventura Isles.

Many toxic pesticides that were once commonly used on golf courses are no longer manufactured or sold in the U.S. However, the outcome of this case could have implications for hundreds of other golf courses, especially if or when they are redeveloped as residential communities.


Homeowners Sue Aventura Isles Developers Over Chemical Contamination
IZZY KAPNICK | Miami New Times | DECEMBER 27, 2019 | 8:00AM



Gold Coast condo owners sue to stop deconversion attempt

Five unit owners at 2 East Oak condominium, located on Chicago’s Gold Coast, are hoping to stop a forced sale and deconversion of their 304-unit building to luxury rental apartments.

Last March, the condo association signed an agreement to sell the condo tower to ESG Kullen for $92 million.

Colleen Soto, Igor Thomas, Christina Koclanis, Dorothy Ellis and Carmen Camm are suing their condo association, its board members, and its management firm.

The five unit owners are represented by attorney Berton Ring.

Unit owners accuse the defendants of mishandling reserve funds, and refusing to turn over ballots cast in a membership vote, as required to authorize a sale agreement for 2 East Oak.

Statute enabling deconversions

Illinois state law allows 75% of unit owners to approve a sale and termination of their condo association. The remaining 25% of owners are forced to sell their units. The terms of the sale often don’t guarantee that all unit owners  receive the full and fair market value for their properties.

The city of Chicago enacted an Ordinance in September to help curb the deconversion trend. The city’s new Ordinance increases the condo deconversion sale membership vote threshold from 75% to 85%.

But 2 East Oak completed its deconversion membership vote prior to the effective date of the city ordinance.

Lawsuit details

According an article in the Hartford Courant, Defendants named in the lawsuit include the condo board’s president, Krystofer Drogoszewski; the vice president, Jane Regnier; and the secretary, Criston Matherly; and the remainder of the condo board. The lawsuit also names the building’s manager, Chicagoland Community Management.

The condo association is represented by Kelly Elmore.

Colleen Soto contacted IAC late last year to share her concerns about the deconversion attempt. She and her husband recently relocated to their condo at 2 East Oak, only to learn that they could soon be forced out of their home against their will.


Condo owners sue to block $92 million sale — and deconversion — of their Gold Coast tower
Ryan Ori, Hartford-Courant | Jan, 8, 2020


Diamondhead Mayor sues Diamondhead Country Club and POA for breach of contract, punitive damages

Tommy Schafer, mayor of Diamondhead is suing Diamondhead Country Club and Property Owners Association’s Violation Compliance Committee, after the VCC imposed penalties on Schafer.

Schafer’s civil action claims that the POA is not authorized to impose a $150 fine, plus a six-month suspension from the use of amenities upon Schafer and his family.

Schafer’s legal complaint cites the POA’s governing documents to support its claims.


Schafer believes the fine and suspension were imposed in retaliation for an altercation between himself and Bob Marthouse, President of the POA, at the community clubhouse on September 4th of last year.

The two men engaged in a heated discussion of previous (failed) lawsuits filed by the POA, and argued about the possibility of the City taking over maintenance of common amenities of the POA, when Diamondhead Covenants start to expire in 2020.

According to Schafer’s complaint, during the argument, upon rising from his chair, Marthouse accidentally bumped into Schafer, lost his balance and fell to the floor.

Criminal charges filed, but dismissed

Five days after the disagreement between the two men, Marthouse filed a criminal assault complaint against Schafer. Those charges were dropped when an investigation found no evidence that an assault took place.

Despite these facts, the POA refused to reverse the penalties it imposed upon Schafer.

Schafer’s lawsuit alleges breach of contract by the POA. The Plaintiff seeks compensatory and punitive damages, reimbursement of his attorney fees, and a temporary restraining order against the POA, including a reversal of his suspension of use privileges.


Mayor Files Suit Against Diamondhead CC & POA
Posted by: T.R. Alfonso, Diamondhead News December 22, 2019

Read the lawsuit


North Carolina

Condo residents won’t be reimbursed for trash service overcharges

Greensboro admits it charged condo residents for trash pickup services, which it did not provide, for many years.

Point South Homeowners Association had been paying for waste removal from two dumpsters since 2007, even though it only had one dumpster.

The HOA accuses the city of making a ‘clerical error’ in billing the HOA.

The City says it received two orders for dumpsters, one from the HOA and one from its management company. Somehow, no one noticed the duplicate outstanding orders, which were in effect from 2007 to 2019.

When it discovered the $68,000 error, the condo association sued to get its money back.

However, due to a statute of limitations, the city is only obligated to repay 20% of the overpayment.

So the condo association has no apparent legal basis to recover the remaining $56,000 in overpayments it made to the city over the course of nearly 12 years.


Greensboro Admits It Overcharged, Won’t Refund Money
Posted by John Hammer | Jan 9, 2020 | Rhino Times

Questions Raised About Rhino Times Article On Lawsuit
Posted by John Hammer | Jan 13, 2020 | Rhino Times


Still not recovered from Harvey, owners wonder “Where’s my (flood insurance) money?”

Hurricane Harvey struck in August 2017, damaging many units in the West Bayou Oaks Townhomes community.

Nearly 2 and half years later, frustrated owners say the condo association has not accurately distributed the flood insurance money they need to complete repairs on their homes.

Some homeowners report that their HOA won’t hand over their money, unless the owner agrees to use only the Association’s approved contractors.

Another homeowner, who is suing his HOA, claims he is entitled to a $25,000 insurance payment, but the HOA only paid him $10,000.

So far, the HOA offers no explanation for alleged financial discrepancies or its delay in disseminating funds to townhouse owners.

Dozens of other condo owners also threaten to sue West Bayou Oaks, according to attorney David Tang.


West Houston condo owners sue their HOA claiming it won’t turn over insurance money for Harvey damage
By Randy Wallace
Published January 14, 2020 FOX 26 Houston ♦


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