Friday, August 14, 2015

Has Your Condo Board Gone Rogue?

Here we go again. Condominium boards exceeding their authority (or shirking their duty) is so common that I am no longer surprised when I hear crazy stories about a Board, officer or management company making up procedures to suit their own agenda. Without enforceable guidelines it would be next to impossible for a group of people to fairly share ownership and maintain reasonable living conditions in a property. If that group doesn't understand the laws and guidelines they are at the mercy of the overreach or indifference of the Board.

The State of Florida was kind enough to enact a long and detailed Statute (The Condominium Act) that spells out how condominiums shall be formed and run. You can read the entire Statute here. Each individual condominium also has a Declaration and By Laws detailing governance and use restrictions for that condominium. Condo owners are advised to read and understand the Declaration and By Laws for their association. Note that the separate Rules and Regs issued by your Board may not be legal nor enforceable.

With all the legalese of the governing documents, it can be confusing as to exactly what rights owners and Boards have. Not surprisingly, Boards and management companies routinely act in ways that violate the Act. Often unintentionally, sometimes not.

I saw a Cocoa Beach condo board run a sales contract through first right of refusal when no first right existed. In that case it was a misunderstanding not an illegal conspiracy. I have seen a management company insist on offering a contract out for first right contrary to the procedure in the Declaration. That case was also a misinterpretation not intentional misbehavior.

Now on to outright conspiracies. There is a condo in Cape Canaveral that has for years tried to keep sales contracts secret from owners who have first right of refusal. This has gone on with cooperation from the management company. They recently stepped up their illegal activities and skipped the first right process altogether in clear violation of their Declaration. Another Cocoa Beach oceanfront condo added an illegal use restriction to it's Rules and Regs and backdated the document to make it appear as if it always existed. They should have made sure there were no former copies still in existence. Busted. 

The incident that prompted this post occurred at an otherwise beautiful Cocoa Beach condo that just happens to have a particularly nasty management company. The management company has been a fairly constant source of grief for owners and tenants and I have heard many stories over the years. The Board tolerates the manager's actions and possibly supports it. I was sent a copy of one letter from the manager threatening to fine an owner. The threat was not illegal, but the manager did not have the authority to levy a fine. That is a clear violation of the procedure spelled out in the Act. Hopefully, the Board will follow the law if they start following through on the manager's frequent threats of fines. If not, and no one stands up to them, the grief will continue.

The Condominium Act is very clear about fining procedure. Neither the management company nor the Board can fine an owner or a tenant without first issuing a 14 day notice of a hearing before a committee of owners who are NOT Board members nor residents of a Board member's household. The committee can either confirm or reject the fine. The Board can't levy a fine without following this procedure and receiving the committee's confirmation. If you receive notice of a fine absent the procedure, inform the Board and manager that they have violated procedure and do not pay it until procedure has been followed. Your non-Board committee members may stand up to a bullying Board or manager and reject the fine. Not all fines are undeserved nor are all Boards and managers bullies. The procedure is there to give some check and balance to the fining process. Use the privilege wisely should the chance arise. As always, knowledge is power.

From the Florida Condominium Act Chapter 718.303 (b):
A fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ written notice and an opportunity for a hearing to the unit owner and, if applicable, its occupant, licensee, or invitee. The hearing must be held before a committee of other unit owners who are neither board members nor persons residing in a board member’s household. The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board. If the committee does not agree, the fine or suspension may not be imposed.

"If you smell something, say something."  __Jon Stewart

Saturday, August 08, 2015

Condos and Scallops

Somehow, even with the already-tiny and still-shrinking inventory, 62 MLS-listed condos and townhomes managed to close in the month of July. One of those was a short sale and seven were bank-owned. Of interest among the bank-owned units was a 2nd floor east facing Mystic Vistas corner 3/2 with 2059 square feet that sold for $327,000 in 26 days. A shocker was a 3rd floor east facing (behind the pool) Spanish Main 3/2 with only 1153 square feet and no garage (no fridge or washer/dryer either) that incited a bidding war and closed above asking for a remarkable $302,500. Even for a weekly rental unit, that price surprised me. That was not, however, the highest price per square foot paid for an ocean condo in the month. A furnished and partially remodeled ground floor direct ocean Sandcastles 2/2 with 1286 square feet and a garage closed for a jaw-dropping $380,000. That's $295 per square foot for a unit with no view.

Other sales of interest included;

A remodeled and furnished 2nd floor corner 2/2 direct ocean Windjammer in Cape Canaveral with 1196 square feet and a garage closed for $330,000 in 18 days on the market.

A partially furnished and remodeled 3rd floor direct ocean downtown Cocoa Beach Park Place 2/2 with 1316 square feet and a garage closed for $335,000.

An updated 7th floor direct ocean Stonewood Cocoa Beach 3/2 with 1588 square feet and a garage sold for $400,000.

An updated and fully furnished 2nd/3rd floor townhouse style Royal Mansion Cape Canaveral 2/2 with 1058 square feet and a peek of the ocean closed for $255,000. Open parking and weekly rentals.

A fully furnished mainly original condition 4th floor north ocean view Sandcastles Cocoa Beach 2/2, 1286 square feet and garage closed for $305,000. Weekly rentals permitted.

A one of a kind 7th floor penthouse direct ocean Ocean Pines downtown Cocoa Beach with 3 bedrooms, 4.5 baths and 2706 square feet closed for $628,750. Came with a private 2 car garage.

An updated wide floor plan 5th floor north ocean view Windrush Cocoa Beach 3/2 with 1852 square feet and a 2 car garage closed for $430,000 in 29 days.

A remodeled direct ocean Waters Edge south Cocoa Beach 1st floor (above garage) 3/2 with 1753 square feet and a garage closed for $364,750.

A 3rd floor south facing peek of ocean between the buildings Solana Shores 3/2 with 2095 square feet and a private garage closed for $400,000 after just 20 days on the market.

A 4th (top) floor direct Banana River River Bend south Cocoa Beach 3/2 with 2050 square feet and a garage closed for $370,000.

Right up the road in south Cocoa Beach a 4th floor corner direct river Garden by the Sea 3/3 with 2405 square feet and a 2 car garage closed for $424,000 after about four and a half years on the market and for about $200,000 less than the initial asking price in 2010.

I'm happy to send a link to details of all 62 closed sales to anyone who would like it. As we can see from the recently closed sales, prices continue to rise, mainly a function of the record low supply, standing at 175 units for sale in Cocoa Beach and Cape Canaveral this morning with only seven distressed listings in the bunch. Having said that, we are still far below the prices of ten years ago and remain the lowest priced oceanfront community in Florida. 

The rain continues although nothing like the Biblical rains being endured on the central Gulf Coast of Florida. Scalloping there has been limited to between the storms but we were able to score good quantities on our annual harvesting trip this week. Spicy scallop baskets (gunkan maki) like those pictured will be gracing our plates for a few days.

Got questions? Email me.

"When I was poor and I complained about inequality people said I was bitter, now I'm rich and I complain about inequality they say I'm a hypocrite". ____Russell Brand