How An Older German Couple Was Defrauded Twice By The President Of A Florida Condominium
By Roger Buchanan, firstname.lastname@example.org
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
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
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.
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