Courtesy of News Channel 5, WPTV
Published November 20, 2005
It was the perfect place for Josef Leicht to spend the rest of his life.
From his 25th-floor beachfront condo, the 81-year-old had breathtaking views. The sunrise over the Atlantic. Stingrays and sharks swimming in the ocean below. Cruise liners sailing into the Port of Palm Beach.
He swam in the ocean every day, walked along the beach and on the condo's top floor was a clubhouse with panoramic vistas where he could enjoy drinks from the bar.
"I was happy," he said.
Such was life in the Tiara.
Now Leicht lives in a mobile home park in Lake Worth. The view: Other mobile homes.
Hammered by hurricanes Frances and Jeanne last year, the 320-unit Tiara condominium on Singer Island has been in a constant state of repair. Windows shattered. Suites flooded. Some were gutted by the powerful winds.
The storms took residents' furniture, clothes, keepsakes and their savings.
The Tiara's residents have become refugees of sorts. And to restore the lifestyle they once enjoyed, their owners could be assessed up to $250,000 each to cover the estimated $120 million reconstruction.
That's more than some residents once paid for the condos.
Some owners have been forced to sell. Others are desperately trying to secure loans to pay the bills.
And the condo's board of governor's still has not received an estimate on how much damage Hurricane Wilma caused.
Owners have been unable to enter the building since late September of 2004. And it's likely they won't be able to return until late 2006.
Still, the majority of owners voted last week to continue reconstruction, no matter the cost.
Two events. Two policy limits.
That's the argument the Tiara Condominium Association makes in a lawsuit filed in August against Citizens Insurance Co., the state's insurer of last resort.
The policy covered the building for nearly $50 million, with a $1.5 million deductible.
The association contends Citizens should pay $100 million of the restoration costs associated with hurricanes Frances and Jeanne.
Furthermore, the suit charges Citizens with fraud, saying the company initially indicated it would pay two claims before it abruptly changed its mind this summer.
Citizens spokesman Justin Glover declined to comment on what the condominium was originally told. "I can't go into that specifically," he said.
Glover said Citizens had paid the full policy limit, which represented a total loss of the building.
"Once you have one total loss, how can you have more than one total loss?" he asked.
He also declined to comment on whether the policy provided one policy limit per hurricane, saying it was a point of litigation.
With the total cost of repairs at $120 million, Citizens' position leaves the Tiara with about a $70 million shortfall, said Edward Kisco, president of Tiara's board of governors.
Condominium documents require the association to rebuild whether Citizens pays or not.
The worst-case scenario is that owners of one-bedroom units would be assessed roughly $170,000 and the owners of two-bedroom units would have to pay about $250,000.
So that is what they are being assessed. If the condo wins its lawsuit, residents still would pay for $20 million in repairs.
The other option is that the condo may obtain a line of credit to pay for repairs, Kisco said.
Although Josef Leicht's new home seems like a downgrade from his former residence, he doesn't mind.
"What the heck?" he said. "Maybe I was in a high-class building, but I'm not a high-class guy."
The heartache, the battling, the frustration, none of it was worth it.
Like others, he sold.
And he made money.
He bought his condo in 2002 for $152,000. He sold it in September for $390,000, after he realized large assessments would come.
"I wouldn't pay $170,000," he said. "It's ridiculous."
Orlando Gonzalez hopes he can also sell. Soon.
Gonzalez, 48, a Staten Island obstetrician, purchased a one-bedroom condo for $190,000 on Memorial Day 2002.
"The assessment for our unit is essentially what we paid for it," Gonzalez said.
He spent a total of six weeks there before the hurricanes.
So far he's paid two assessment installments of $11,000. That's in addition to his mortgage, which with taxes and insurance is $1,280.
"This assessment is going to drain my rainy-day savings," he said.
So Gonzalez recently put his place up for sale. "We are like hemorrhaging," he said. "We have to stop the bleeding."
The next time Gonzalez returns to Florida, he vows, it will be as a tourist, not a property owner.
Ali M. Kas called himself the leader of the rebels. For months, the 64-year-old has been attacking the board.
Why is there no fixed cost on the repairs? Why have they not set a fixed date of completion?
It was the board, he noted, that decided to embark on a lengthy balcony-restoration process they knew would extend through hurricane season. Because of the restoration, residents were unable to put up shutters before the storms.
Kas said the board allowed Southern Construction Services, the condo's contractor, to overcharge for repairs.
He also is dismayed that Domingo Castro, the president of Southern Construction, has purchased some Tiara condominiums, saying it represents a clear conflict of interest. Property records show Castro has purchased three, including Leicht's.
Kisco did not deny costs have escalated needlessly. But it's not the board's fault, he said. It's Citizens.
The insurance company directed faulty repair methods in the beginning, he said. For example, rather than replacing the drenched drywall, Citizens wanted it dried. The rental equipment associated with the drying cost between $25 million and $30 million.
Kisco said Kas has been appointed to a committee that will help establish a fixed cost for repairs and a completion date.
"What changed the entire environment is the impact of Hurricane Wilma," he said.
The balcony restoration was a 14- to 15-month project that would have stretched through hurricane season no matter what, Kisco said.
As far as Castro owning Tiara Condos, Kisco said he had no problem with that.
"I think that could be perceived as having faith in our building," he said.
Castro couldn't be reached for comment, despite messages left at his office.
Fiscal black hole
Kisco knows the assessments have been difficult to bear and some will be forced from the building.
Not only do they have the assessments, but also the costs of finding alternative housing. And some people who had their condos paid for now must obtain mortgages, he said.
Kisco and others insist the costs and wait will be worth it.
Carl Presto, a real estate agent with a condo on Tiara's 37th floor, said it will be like getting a new building. A two-bedroom unit worth $600,000 before the hurricanes will be worth $1 million, he said.
Still, Leicht is just happy to be free. "I was happy," he said. "I am doubly happy now."