SamF
(Florida)
Posts:8
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| 07/29/2010 7:23 AM |
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Hi there,
Our HOA in FL has a somewhat strange legal agreement from twenty years ago with a condominium next door, that obligates the HOA to pay for the majority of the expenses for the condominium's pool and clubhouse, but give the condominium sole final say on what the expenses should be. The problem is that the condominium will not provide us with any details as to the expenses, invoices etc. for the pool and continues to bill us an obscene amount every month for these expenses. It's sort of a like a mafia-type payment, and it is killing our HOA financially. We have asked for financials, invoices etc., since by law we are entitled to this information, but have been refused. Apparently, the pool is not even being maintained as it has been shut down by the Board of Health. Other than the obvious route of a lawsuit, does anybody have any idea how else we can deal with this? Are there state organizations or authorities we can contact to help us? Is a lawsuit the only viable option.
Thanks. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 7:43 AM |
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Well, You should certainly have a copy of the old agreement to see exactly what it says as for responsibility of the condo to maintain the pool and in what condition. I assume that your HOA then has use of the pool?
If it is shut down by the Health Dept, then you are unable to use it, thus there should be no expenses. The very first thing that I would do is to consult an attorney seeing that you are under a written agreement with the condo. You will not be able to resolve this yourselves unless some willing Condo Board would sign off of the agreement. What are those chances? Probably none. |
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SamF
(Florida)
Posts:8
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| 07/29/2010 7:55 AM |
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Thanks for the response. Yes, we have the agreement and yes we can use the pool.
The agreement doesn't specifically state anything as to what the responsibility of the condo is for maintenance or what the costs should be. It just says that we have to pay them for the pool and can consult on the costs, though the condo has the right to the final say of the costs. It is surely a strange agreement that was apparently written by a developer to benefit the condos and himself at a time when our HOA didn't exist, and the developer wanted to construct on the condo property.
I guess in theory the condo can do whatever they please in terms of maintenance since there is nothing in the contract about this, but I find it completely absurd that there is no law which regulates what someone can charge. This is like some stranger mailing you an invoice every month for $10K, with no explanation of services provided and being forced to pay it. I was under the impression that there was a "good faith" presumption in every contract, which prevented abuses due to overcharging etc. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 8:02 AM |
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Sam,
I see a bunch of reasons why the contract could be cancelled because the condo association has not fulfilled any of the contract obligations to your HOA. It is odd that the contract has not been reviewed or renewed. Big failure on your Boards part it seems to me. Without any invoices, this has been a win win for the condo. I would stop the money flow to the condo asap. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 8:04 AM |
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I forgot to add, my Master Gardener Board will not pay any expenses without reciepts (invoices). Not even 2 dollars so thousands of dollars without an invoice? Crazy! |
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SamF
(Florida)
Posts:8
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| 07/29/2010 8:13 AM |
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| Thanks. I agree, big failure on the Board, which makes me suspicious that there is some impropriety here on both ends. And I have been suggesting to stop the money flow, as you mention, but have been advised by the lawyers that this is not the right thing to do. The lawyers advised us that we must continue to pay these expenses or else the condo will sue us and then the court will look unfavorably on the HOA if we try to go to court to cancel the contract. Does this make any sense to you? I figured we should just stop the money flow unless we get invoices and see what happens. If they sue us, I guess we can go to court, but how can a court even hear a case where the "vendor" in this case, a condo, can't even produce invoices to justify expenses that are 10X higher than market costs for the same services? |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 8:35 AM |
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"The lawyers advised us that we must continue to pay these expenses or else the condo will sue us and then the court will look unfavorably on the HOA if we try to go to court to cancel the contract."
Sounds to me like this lawyer works for the condo. It is just plain bad advice. Get a lawyer and have him send a letter to the condo Board, telling them that until invoices are provided, the HOA Board finds the condo in breach of their contract responsibilities and that your Board is demanding an audit of previous years pool expenses. Don't go soft on this.
Oh yeah, then there is "the condo will sue us and then the court will look unfavorably on the HOA if we try to go to court to cancel the contract. WHAT ???? Now it is against the law to cancel a contract??? The worst that can happen, you will lose your privledges to swim in the green pool. |
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SamF
(Florida)
Posts:8
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| 07/29/2010 8:55 AM |
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Hey, thanks I agree with everything you said, but I keep getting different opinions from the lawyers.
The lawyers have sent letters asking for invoices from the condo, and the condo has refused to provide them to the HOA and the lawyers. The lawyers have even threatened a lawsuit against the condo. That's when I suggested that we just stop paying and send a letter from the lawyer explaining why ("breach of contract" etc.). The lawyers categorically refuse to do this, because they want to bring a suit against the condo from the HOA and they feel if that we stop paying first we'll have no chance in the lawsuit against the condo. Of course, I find this logic absurd, and I've been wondering if its just me.
The lawyers also said that the condo can put a lien against our HOA property for failure to pay. This all seemed ridiculous to me, since I never thought anyone has the legal obligation to pay absurd bills with no invoices. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 9:17 AM |
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Okay,
Now you have filled in the blanks and I guess that what you need to do is file suit against the condo. Lawyers have it covered from what you have written. So, what is the holdup? It might be much cheaper than to contine paying for an useable pool. |
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SamF
(Florida)
Posts:8
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| 07/29/2010 9:57 AM |
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| The holdup is that the Association cannot access any money for a lawsuit (another whole issue), and when I showed up to a meeting with the lawyers to discuss a potential suit (which they recommended), they came dressed in shorts and baseball hats. Maybe I'm old fashioned, but I tend to think you need to show up to a serious business meeting to discuss a lawsuit, in at least pants and a nice shirt. So I've decided to start all over again and verify everything I've been told. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 10:19 AM |
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New year's Eve at a very expensive restaurant in Palm Beach. Dinner at 8, dress code followed to be allowed for entrance. At least HALF of the diners were in shorts, jeans and flip flops. Welcome to Florida. |
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SamF
(Florida)
Posts:8
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| 07/29/2010 10:25 AM |
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| Very Funny. But that was for a party, no? Have you ever been to a lawyer's office to discuss a lawsuit and the lawyers shows up in shorts and a baseball cap? The client maybe, but a lawyer trying to win the right to pursue a case? Just seemed odd to me and i found it difficult to take whatever they said seriously. Was straight out of a comedy. |
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SusanW1
(Michigan)
Posts:5035
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| 07/29/2010 11:59 AM |
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Is the AMOUNT stated in the contract?
Where and how was the amount decided upon.
I can't believe that a contract does not state exactly what your HOA gets in return for the stipend it pays this condo group.
Get the contract out of mothballs and re-write it or cancel it.
PS any old timers around that could shed light on this arrangement? |
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SamF
(Florida)
Posts:8
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| 07/29/2010 12:19 PM |
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| The contract says we can get use of the pool and other recreation facilities (of which there are none). But, it does not say anything regarding the condo's responsibilities, other than that they have the final say on the costs of the facilities. Amazingly, the contract doesn't even include a simple phrase that the condo needs to have the costs in line with "market costs." So even though we, the HOA, are allowed by the contract to consult on the costs (note: we've been refused those rights), the condo has used their final say clause to go to school here and jack up costs by 10X. Of course, they won't provide any invoices for all the expenses they claim they are incurring, so we don't know where the money is going on every month. There are no bids for the services of the pool or any other service. |
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DonnaS
(Tennessee)
Posts:5671
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| 07/29/2010 12:25 PM |
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Get out of the contract by any means available. I see the money hose in their hands and you are the water (free money) |
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SamF
(Florida)
Posts:8
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| 07/29/2010 12:40 PM |
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Yes, you are correct. The Pres. of the Condo has the audacity to tell me that the Condo has significant reserves and is operating at a significant "profit". That despite the fact that delinquencies there and throughout FL are at an all time high. I wonder where all their cash is coming from. hmmm.
Thanks for all your comments. |
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MaryA1
Posts:0
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| 07/29/2010 2:49 PM |
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Sam,
Why can't the assn access any money for the lawsuit? IMO, the BOD needs to have this lawsuit started ASAP!! |
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SusanW1
(Michigan)
Posts:5035
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| 08/02/2010 1:39 PM |
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HOW was the amount set? This is confusing.
Sounds like there is a flat fee set and the costs really don't matter - that's what it's going to be if you want the privileges. You are not going to get an itemized cost statement.
(Kind of like paying for a ticket to enter an amusement park - you pay a set amount (alot) no matter how many times you ride or even if you don't ride anything.)
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