A group of condo owners dragged their bank to court in the hopes of preventing lenders from launching their own legal attack over a $3 million loan.

"We feel that the way we're handling it is the right way to go," said Keith Tannenbaum, a condo owner and member of the Grenadier Lakes at Welleby Association Board.

The community's lawyer filed a declaratory judgment against City National Bank of Florida in the Miami-Dade Civil Courts. The suit asks a judge to declare that the association is meeting its obligations under the loan and does not need to provide additional collateral.

The bank wants the community to pass a $3 million special assessment demand, the board's attorney, Marlon Bryan, said.

In 2022, the bank loaned former association leaders $3 million for roof repairs, Tannenbaum said. Loan documents, though, list "common element repairs" including "seawall repairs" on a complex that lies 22 miles from the Atlantic Ocean.

The loan officer did not collect an assessment as collateral but the bank still made the loan, Bryan said.

Still, condo owners made payments.

"There's no payments that have been missed to the bank," Tannenbaum said.

Three years later, the bank demanded the community pass an assessment as collateral or risk defaulting on the loan and face interest rate hikes that could push the community into foreclosure, Bryan said.

"For the bank to turn around now and say there needs to be additional collateral as relates to this loan, it does not make sense," he said.

A spokesperson for City National Bank of Florida emailed a statement:

"The loan issued to Grenadier Lakes Condominium Association in 2022 went through CNB's standard underwriting process based on information provided by the Association and the condo board was advised by legal counsel. The loan was overwhelmingly approved by a vote of the homeowners and remained in good standing until 2025, when the Association went into default. CNB has been patient and flexible, maintaining consistent communication with the Association and exploring solutions to resolve the matter."

Frustrated residents wish they had more power years ago. The association board members involved in the loan resigned after residents began questioning spending habits, Tannenbaum said.

This comes as south Florida state Rep. Juan Carlos Porras proposed reform in Tallahassee.

Porras filed House Bill 567, which creates a Community Association Court system to give condo and homeowners a new venue in the circuit court system to settle disputes with associations over money management.

The bill also creates arbitration for disputes. The reforms would pull oversight and funding away from the Florida Department of Business and Professional Regulation.

"We at the legislature, specifically myself, I've seen that DBPR has failed too many homeowners for far too long," Porras said. "They are not responsive when people have disputes heard and they simply do not do any sort of investigation."