How An Older German Couple Was Defrauded Twice By The President Of A Florida Condominium

 

By Roger Buchanan, rogerb@dejazzd.com

June 10, 2005

This is a true story using fictitious names to reduce the embarrassment of those who would prefer less publicity.  The older German couple will be called the Jones, for lack of a better name.

The Jones were among the original owners of the XYZ Condominium when their unit was offered for sale in 1988.  Each year they commute between Germany and the USA searching for new experiences and long lost cousins who made the new world their permanent home generations ago.  When they are not on the road the Jones make their Florida condominium their winter paradise.  Here they can be seen riding their bikes, walking to the ocean, and taking part in the arts, music and cultural establishments that make their part of Florida a special place.

This story began several years ago when a malfunctioning irrigation system turned its attention to the Jonesí building spraying water for a twice weekly soaking.  The problem was reported to the management company but basically ignored, perhaps for years as no one really knows.  What is know is the damage caused.  Each malfunctioning nozzle found its mark and rotted the wood in its path.  By the winter of 2004-05 the Jonesí porch, a neighborís porch and a 2 X 12 structural beam were all badly damaged.  The plywood floor on the two porches had holes and associated rot big enough to fall through.  Parts of the structural beam had disappeared and a second beam behind the front beam was soon to become the next target. 

The Jonesís building was repaired during the winter of 1904-05.  The damaged structural beam was cut out and a new beam installed, all at the condominium association expense without any questions as to who was responsible for this negligence.

Now go to the annual meeting of the XYZ Condominium in January of 2005.  At that time no one on the Board of Directors was aware of the rotted structural beam.  Strange as it may seem, neither the board nor the management company assume responsibility for regular building inspections.  The board President did know of the damaged porches as they were brought to the Presidentís attention by the repair company.  When the President visited the damaged site, the repair company was advised to fix the outer edges of the porch.  But the repair company declined to do so knowing that if they touched a portion of the porch they would be liable for the whole porch.

Meanwhile the Jones addressed a letter to the Board of Director asking for compensation for porch damage caused by the condominium associationís malfunctioning sprinkler system.  At the annual meeting the President announced to all in attendance, including the Jones, that it was not the policy of the condominium to repair porches that had been modified by the unit owner.  (Unmodified porches were regarded as a limited common element while modified porches were the responsibility of the unit owner).  The board declined the Jonesís request, but my ears perked up.  The decline was at odds with itself for the Jonesís porch had not been modified

I was elected to the Board of Directors at the annual membership meeting and immediately pointed out to the board that the Jones had an unmodified porch and therefore, according to the policy announced by the President, eligible for compensation.  A lively discussion followed but the topic was not on the policy announced at the annual meeting.  The topic focused on the word ďunmodified.Ē  One board member raised the possibility that the indoor/outdoor carpet on the porch was a modification or an add-on at the time of purchase, perhaps even with the add-on condition unknown to the buyer.  One board member was absent and this person later confided that he who knew without doubt that the original as-is and with no add-ons, was a porch with carpet as standard equipment.  Since we could not agree as to what constituted an original unmodified porch, a compromise was reached.  I concurred and the board adopted a resolution to pay half the cost of restoring the porch to its original condition.  The President followed up by asking the repair company to submit a bid for the repairs.

The subsequent bid from the repair company contains several significant items of information.  First, it acknowledges the cause of the problem as being the sprinkler with a bid to repair the damage caused by that system.  (This is important because some on the board wanted to excuse the sprinkler and blame the rain).  The bid as received as a fax sent to the management company and reviewed by the board has two dates and two sets of figures.  The original bid, as evident by the format, is dated March 24, 2005 and details the work to be accomplished to rebuild the porch.  It includes the removal, disposal, purchase and installation of 7 Ĺ sheets of plywood together with the necessary prep work consisting of removal and reinstallation of the existing screens, removal of old flashing and installation of new flashing.  The bid price was $2,234.00.  Then on March 30th there is a modification noted at the bottom of the bid.  The original job was divided into two components.  The bid was now $737.00 for all the plywood labor and materials.  By subtraction that leave $1,497.00 for the screens and flashing.

A special meeting of the board was called by four board members for April 7th.  Five members were present including myself.  The President and one other board member were adamant claiming that the purpose of the previous board motion was to only replace the plywood and did not include the necessary associated preparatory work involving the screens and flashing.  Two other board members regarded the intention of the enabling board resolution to include the total cost of the porch repair.  In practical terms this meant that the unit owner would either be given half of $737.00 or half of $2,234.00.  I knew that the President had maneuvered to give a very narrow interpretation to the boardís previous decision.  I perceived that the President was determined to win even if it meant waiting until the next board meeting when one of her opponents would be absent and two of her supporters would be present.   And I knew that if I did not accept this compromise, the political costs and repercussions would be high.  I was apprehensive and not sure what steps the President might take if I were to cast my vote in support of a payment for the higher amount.  I controlled the swing vote, sized up the political realities and voted with the President for the lesser amount.  This compromise, so I thought, would at least resolve the matter and bring peace to the community.

During the heat of the April 7th meeting I did not take a critical look at the numbers that were presented to us for the first time at that meeting.  I accepted at face value that the numbers were honest.  After the meeting, at the moment I took a second look, it was immediately clear that the numbers were dishonest.  At the regular board meeting on April 11th, the President would not allow the previous subject to be reopened.  The President of the repair company was present to talk about repairs in general but I was forbidden by the Board President from asking him any questions about the above bid.  On April 23rd I wrote an extensive letter to the President of the repair company, with a copy to both the condominium board and the management company, giving my analysis of the cost calculations and asking him to respond so that the Jones could be treated with justice.  He did not answer that letter.  At the regular meeting of the board on May 9th I asked the board to address this issue, take a look at the calculations I submitted, and discuss a recalculation of the payment due the Jones.  The board did not accept this item for the agenda.

As a result of the above events the associationís policy for reimbursement for a limited common element, as announced by the President at the annual meeting, was watered down in two steps.  First, the promised reimbursement was cut in half as a compromise not knowing if the porch had or had not been modified by the unit owner.  Next, the repair bid was divided into two components and the Jones paid half of the smaller of those two components using the very narrow argument that the reimbursement was only for the plywood repair and not for the associated work necessary for access to the plywood floor.

The first compromise was an honest one, made in the absence of definitive information.  The second compromise came about because of the Presidentís ability to impose a narrow interpretation of previous board action.  With a willful maneuver by the condominium association President, the Jones received far less than they originally anticipated.

With politics being politics the matter could rest here with the wounded licking their bruises and going away.  But there are ethical and moral considerations that keep this matter alive.  Did the President collaborate with the repair company to deceive the board and defraud the Jones?  Did the repair company violate the ethics of their trade?  The answer to both questions is yes, absolutely.

My questions could not be asked and my letter to the repair company was not answered, but I have enough experience to come close to answering my own questions.  What was bid at $737.00 should have been closer to $2,000.  What was bid at $1497.00 should have been in the neighborhood of $200.00.  The dishonest numbers secured by the President of the condominium association and presented to the Board of Director were skewed, with the collaboration of the condominiumís major contractor, in the interest of defrauding a unit owner.

Further investigation is needed to determine the extent to which the repair company violated the ethics of the trade associations to which they belong.

There is a second set of considerations to be placed on the table.  I called attention to three places on one building where a malfunction irrigation sprinkler caused extensive wood rot.  This malfunctioning continued for years (enough to rot an above ground pressure treated structural beam) amounting to negligence on the part of the condominium association.

Is not the association liable for damages to a unit owner that is attributed to negligence?   Is it not a normal rule of law for an entity to be responsible for damage inflicted on another?  Is it not the associationís duty to repair the two porches just as it repaired the structural beam?

In the first argument the Jones were defrauded with the aid of a dishonest bid and the Presidentís strained and narrow interpretation of the boardís intent.  In the second argument the Jones were defrauded by the associationís failure to take responsibility for its negligence.

There is a justification for being protective of the Jones.  They are not hard charging aggressive Americans fully aware of the law and their rights, and fully able to advocate for themselves.  The victims in this case are older citizens of Germany meaning that they came of age during the Third Reich, a time when obedience was paramount and citizens were differential toward those in authority.  Older persons are less assertive than the young and non-citizens have additional reasons to not push their rights too hard.  Given the circumstances, older German citizens are the easiest to defraud with impunity, and thus most in need of an ombudsman.  


You can contact Roger or send comments by sending an e-mail to: rogerb@dejazzd.com

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