By Ron Hurtibise South Florida Sun Sentinel
Chalk one up for the condo unit owners who notched a rare win against a governing board — without months or years of litigation.
A group of seven owners at The Woods Condominium, a two-story 46-unit complex in Wilton Manors, successfully challenged $12,000 assessments that were approved by their governing board — without a vote by all unit owners — to replace the complex’s air-conditioning system.
They hired an attorney who sent a cease-and-desist letter that convinced the board to stop the $550,000 replacement project from moving forward. The board also voted to demote its president, who was the project’s chief backer.
But Randy McLoud, the deposed president, warned that the dissenting unit owners might find that they won a Pyrrhic victory. He says that the complex’s 44-year-old air-conditioning system — which sends water from an on-site well through a series of pipes to heat pumps mounted inside each unit — is in decrepit shape and will have to be replaced before the owners will be able to command market value for their units.
The $12,000 assessment to each unit owner for the AC replacement that was approved in May followed several other assessments that some of the residents say depleted their savings or drove them into debt.
In 2021, each unit owner was charged $2,200 to fund a $100,000 pool restoration project that McLoud acknowledges still hasn’t been finished.
That was followed by a $30,000 plumbing repair bill that cost unit owners more than $600 apiece.
And then in 2022, each owner was charged $17,400 to cover an $800,000 package of improvements including electrical and concrete restoration, new landscaping, new washers and dryers for the laundry room, and an insurance cost increase. Yet another $5,000 assessment to replace the roof followed after the association’s insurance company dropped its coverage, McLoud said.
The $550,000 air-conditioning-replacement project was the final straw for the dissenting owners.
McLoud and the board’s former lawyer argued that the replacement was a “repair” that the board was authorized to approve. The dissenters contended that the project was a “material alteration to a common element of the association” which, according to state condo law and The Woods’ condo’s declaration, required approval by two-thirds of the 46 unit owners.
Unit owner Alex Yalyshev took it upon himself to hunt for an attorney who would challenge the decision. He said he wasn’t necessarily opposed to the project but thought it was incorrectly approved at too high of a cost.
Attorneys who specialized in condominium law provided estimates of $25,000, $35,000 and $40,000 to take the case, he said. “And that was just to begin,” Yalyshev said. “They said, ‘We’re probably going to have to charge more.’”
“That’s a huge ticket to fight for your rights, you know?”
Finally, a Hollywood-based civil litigation attorney named David Lazarovic, who doesn’t specialize in condo law, agreed to take the case for $5,000, Yalyshev said. “He really took his time to investigate everything,” Yalyshev said. “He even came to the property to see the air-conditioning system. His approach was really hands-on.”
To replace or not to replace
Pam Nolan, one of the primary dissenters who has served as board treasurer on and off over 10 years since 1996, says she used her home equity to finance the $12,000 air conditioning bill after using a different loan to pay off previous assessments.
She contends that the air-conditioning system does not need to be replaced. “The current system just needs regular quarterly maintenance and everyone needs to take ownership of their own heat pumps and have them properly maintained,” she said.
Only three to four unit owners have problems with the system because they fail to clear intake pipes that feed into their heat pumps, she said. Other than a needed replacement of the backup pump, which would cost between $5,000 and $15,000, “there’s nothing wrong” with the system, Nolan said.
McLoud disagrees that the current system will serve the condominium’s needs for much longer. “Over the last three or four years, we’ve had engineers, we’ve had plumbers, we’ve had air-conditioning companies, we’ve had well people out here,” he said. “There’s no schematics on the plumbing or anything. The well is collapsing and filling up with mud. A lot of the plumbing is stopped up and the heat pumps can’t get enough water to work efficiently.”
Documentation from companies that looked at the system shows “there’s nothing they can do for these air conditioners because if they try to blow them out, they could bust the pipes in the wall and we would have a major flood,” he said. “The only solution would be busting up everybody’s floors and redoing all new plumbing, and you know, who can afford that?”
Daniel Owsley, a unit owner who is not among the dissenters, said problems with the well and pumps have been ongoing for the 10 years he has lived at the complex.
“Over the last two to three years, it’s been really bad,” he said. “Last year, I had air-conditioning maintenance people here 10 times and almost all of them told me, ‘It’s the pump, it’s the pressure, it’s the well.’ The company I use told me, ‘We will clean your machine and do regular yearly maintenance but we’re not going to try to repair your system because it’s not your unit, it’s the overall pump and well system.’”
Owsley said his AC has been down for weeks at a time, and like many of his neighbors, he keeps a portable unit that he uses three or four times a year while the main unit is repaired.
Owsley said he favored the plan approved in May that would have replaced the pump and well system with traditional split systems — in which a compressor located in the rear of the condo unit feeds cooled air to a handler inside the condo unit — at all 46 condo units.
Then-association attorney Edward Holodak, responding to a letter from Lazarovic in May seeking information about the decision, said the board told him “well over 90%” of unit owners have expressed their agreement with the replacement project, more than what the law requires to approve the change.
Dissenters resisting extra costs, former president says
Echoing criticism that plagued older condominiums after the collapse of the Champlain Towers South building in Surfside three years ago, McLoud says dissenters typically resist spending money on maintenance.
“Unfortunately, there have been a lot of assessments because this place has gone so long without any repair. People here vote (to keep) no reserves. They bring in barely enough to keep things going. There’s nothing for repair and that’s what’s happened for the past 40 years,” he said.
“It’s not my fault that we didn’t pass the 40-year inspection (which led to the $800,000 bill for repairs that included concrete and electrical upgrades). I didn’t create air conditioners going out. I didn’t create the insurance cancellation because our roof was 40 years old.”
McLoud said the air-conditioning-replacement plan approved by the board turned out to be the cheapest among options that included cooling towers or installing air-conditioning units on the roof.
The $12,000 assessment, he said, includes the cost of hiring an electrician to rewire each unit to accommodate the new system and paying a carpenter to come in and hide the wiring. The contract he negotiated was the cheapest of three estimates with a company “that we felt would stand behind their warranty,” he said.
‘Cease-and-desist’
In August, when McLoud said permits were being signed and the new air-conditioning units had arrived in the warehouse, Lazarovic sent a “cease-and-desist” letter signed by Nolan and six other dissenters that made several demands:
Do not disable or interfere with the operation of the current system or initiate installation of the new system.
Cancel the assessment and refund the unit owners any funds collected.
Take no further action before obtaining required unit owners’ approval.
Begin arranging for “appropriate maintenance” of the existing system.
Failure to comply, the letter said, will result in the filing of a petition for nonbinding arbitration against the association and/or “additional legal and or injunctive relief being sought.”
Yalyshev, who hired Lazarovic, said he left his name off the letter because he’s trying to sell his unit and didn’t want a potential lien for any legal fees that could have stopped the sale.
Three members of the governing board, a majority, voted at the next meeting in September to cancel the replacement project, refund the assessments and demote McLoud from his position of president, McLoud acknowledged.
The property management company, he said, replaced the association attorney who had defended the board’s authority to approve the project.
In an email dated Oct. 29, the property management firm, Margate-based Oasis Community Management, said that refunds of the assessments should be delivered within 14 days.
The email also said the firm intends “to start fresh on the air-conditioning evaluation.”
“Rather than deciding on a solution and then attempting to attach it to our situation, we’ll get a solid understanding of our situation and then present those findings to all owners,” it said.
Lazarovic said that his clients are hoping the matter has been settled with no need for arbitration or further legal action.
“My clients’ hope is that this issue will be resolved or settled amicably and that everyone is happy and we all go our way,” he said.
McLoud hinted that the conflict might not be over. He is weighing filing a complaint with the state Department of Business and Professional Regulation, alleging the board demoted him without filing proper notice before the September board meeting.
If he had to do it over again, he said he would request a vote of all of the unit owners. He added that the need to replace the air-conditioning system is not going away.
He said he has received emails from would-be home purchasers “telling me, ‘I’m sorry, we can’t buy there because there’s an air-conditioning problem.’”
“The sad part is, the (air-conditioning-repair) company we were under contract with even told us that if you cancel this, your next bid from anybody is probably going to be 30% to 40% higher because everything is going up.”
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.
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