The lawsuit between the Key Colony Homeowners’ Association and one of its buildings has been settled with the resort complex’s master association agreeing to pay EmeraldBay’s legal fees and other costs after their years-long dispute.

A former HOA president, Matt Bramson, predicted the settlement will wind up costing all owners more money in the future. “The real winners were the lawyers,” he said.

Key Colony, with 1,179 units, is the island’s largest condo complex. For three decades, EmeraldBay and the three other condo buildings in the seaside resort property would collect both their maintenance fees as well as the master association’s fees. All four buildings would then pay the full amount of the HOA fees for all of the units, regardless if they had received payment from individual owners. The dispute was over what happens when a unit becomes delinquent, aggravated by reduced collections during the pandemic. There was also a dispute over an election, where an owner won a spot as a representative on the master association board even though they were delinquent in paying fees, according to court filings. In 2022, EmeraldBay changed its 30-year practice and said they would only submit the fees they actually collect – no longer fronting the money for delinquent homeowners. Key Colony Homeowners’ Association filed suit, resulting in an unusual scenario in which some owners were — in effect — suing themselves.

The EmeraldBay condominium at the Key Colony complex

 

The case was decided in EmeraldBay’s favor last year, but the condo building was still seeking $222,000 in attorneys’ fees and costs from the Key Colony Homeowners’ Association. The master association had appealed the lower court ruling.

 

But the dispute over fees has now been resolved, according to the settlement filed Friday in the 11th Judicial Circuit Court for and of Miami-Dade.

Key Colony Homeowners’ Association has agreed to pay a total of $270,000, with $125,000 to cover EmeraldBay’s legal fees and a credit of $145,000 to be applied to EmeraldBay’s account with the Key Colony HOA for the outstanding balance. That amount would be on top of the legal fees already paid by HOA, which were not immediately known.

When reached on Tuesday afternoon, EmeraldBay President Bonnie Sekeres said she had no comment. David McDanal, who was president of the HOA when the case was filed in 2023, declined comment.

Key Colony is the largest condominium complex on Key Biscayne. The luxury and gated community has 1,179 units total between its four buildings — Botanica, EmeraldBay, Tidemark, and OceanSound.

Precedent could increase costs

The settlement agreement also means EmeraldBay is not responsible or liable for paying all master assessment fees, but instead only responsible for handing over those fees it actually collects from unit owners.

It’s not immediately known whether the other three buildings, citing the case as precedent, will follow suit. In the past, when a unit became delinquent, it would be up to the individual building to recover both its own and the master HOA fees in a single collection process.

H. Frances Reaves, the president of the OceanSound condo, said there is no immediate plan to change current practice, which she says her residents prefer. But she also criticized the Key Colony HOA for being unable to solve problems. “HOA is a dysfunctional board. I don’t know why,” Reaves said.

But if the other buildings were to follow EmeraldBay’s example, new delinquencies would result in separate collection actions,, creating costlier administrative and legal expenses for all owners, Bramson predicted.

“There is this ‘condo commando’ instinct to sometimes use lawyers as a form of confrontation,” said Bramson. “It’s a shame that cooler heads could not have prevailed with a problem-solving approach.”