Building Collapse in Miami Beach

[Setwayz]

What was that trick again to get past paywall?

Just hit the stop loading page button after a few seconds go by.

 

[afm199]

D&O policies also vary. Good ones cost money and many HOA's aren't getting the correct/ better polices. If EVER on ANY BOARD, make sure to read the D&O policy.

D&O polices usually don't cover gross negligence, but that is a pretty high bar to cross. In the end, BARF's a pretty smart group. I haven't seen the media focus on HOA's as yet.

Yes. In the end, I got out of the two boards I was on. Who needs that liability?

 

[Holeshot]

An interesting parallel to this is the local Millennium Tower fiasco. Lots of lawsuits, and IIRC no work (for over 2 years) was done to fix the situation until there was clarity on how it would be paid for. The difference in the Tower case is that it was a relatively new construction as was the neighboring Trans Bay Terminal construction. I followed that case pretty close because I used to work across the street and always wondered about the risks of digging a giant hole next to a tall building.

Millennium was suits against the original contractors though. The claims were within the CA 10 year claim period, IIRC.

Yes. In the end, I got out of the two boards I was on. Who needs that liability?

Smart as F. Want to be President of a racing one? Have I got a DEAL for you....

 

[Eldritch]

Sure, I just don't know the extent of the liability of the homeowners in this case if a large judgement is levied against the HOA.

I have to image that is drafted somewhere into the contract that the HOA has the condo owner sign when they buy into the community.

Since the Homeowners are the HOA, I wonder if a Judge would let them sue themselves though?

 

[bojangle]

I have to image that is drafted somewhere into the contract that the HOA has the condo owner sign when they buy into the community.

Since the Homeowners are the HOA, I wonder if a Judge would let them sue themselves though?

The HOA is an entity separate from individualmembers. Non-profit? Anyways, I don't see why a member couldn't sue their HOA. An employee can sue their employer.

If a member won and collected a settlement against their HOA, they might just be assessed a percentage to pay for said settlement.

 

[Eldritch]

The HOA is an entity separate from individualmembers. Non-profit? Anyways, I don't see why a member couldn't sue their HOA. An employee can sue their employer.

If a member won and collected a settlement against their HOA, they might just be assessed a percentage to pay for said settlement.

Not necessarily, it depends on the articles that define the HOA, right? They are not necessarily separate. Some are structured so all home owners are part of the HOA, which has a board of directors for over-site, but every houshold is a member and so shares an equal share of fiscal responsibility if the HOA is found liable for a damage judgement as suggested previously.

You really would need a copy of the HOA Articles of Incorporation, Membership agreement, and knowledge of Florida Civil Law to make a good guess.

Folks should definitely keep in mind that most states hold Boards and Property Owners far less accountable than CA does.

 

[Holeshot]

The HOA docs we've done in FL are similar to CA. Boards are usually sued by members living in the community and usually it's for rule promulgation that's an undue restriction on something. Counties/ cities love HOA's because they're the first stop for suit when rules are unfairly created, enforced, written, etc....not the county. They also know that HOA's are hellbuckets of drama and attitudes.

 

[mercurial]

I can't imagine an HOA entity would not indemnify the board members from liability. So if homeowners sued, the liability would get exactly reapportioned back to the owners themselves.

 

[afm199]

Sure, I just don't know the extent of the liability of the homeowners in this case if a large judgement is levied against the HOA.

It's not clear. They are "probably" safe. That's the reason for corporations and liability shields. I would not want to be on the board, however. Those guys are probably going to see a shit ton of lawsuits for negligence. And if one criminal prosecution is attained, it's going to be ugly.

This is a Danny Kim moment.

 

[afm199]

Millennium was suits against the original contractors though. The claims were within the CA 10 year claim period, IIRC.



Smart as F. Want to be President of a racing one? Have I got a DEAL for you....

Bro! I wondered when you were going to ask me. It's a tough job but somebody has to do it. I owe you lunch. You have to come to Oakland to collect. Good restaurant too.

 

[afm199]

I can't imagine an HOA entity would not indemnify the board members from liability. So if homeowners sued, the liability would get exactly reapportioned back to the owners themselves.

Well, afaik, from my limited directorship experience, it's always a tossup. The HOA is pretty much limited to insurance policies. Indemnification is one of those really tricky issues, and the issue is criminal negligence. If the board saw "proof" that there was a real and present immediate danger, and failed to act on it, they are probably fucked. They may be in line for criminal charges, and will be in line for civil charges.

And, of course, my original take on this was that the issues will still be in court when I die.

 

[insyder]

...Seems HOA was underfunding repairs for years which might explain the delay getting repairs started.

Totally not surprising. I used to be an HOA president. The board I was on took the "penny-wise, pound foolish" approach to preventative maintenance and repairs. Many of the board members had absolutely no construction or building management experience. This made it very difficult to convince them to vote appropriately to properly maintain the home exteriors as required in the CC&Rs.

The real question is whether the residents will have any judgements or fines levied against them. I've heard more than one horror story where the HOA gets slammed with something awful and divides it up among the residents to pay it off.

It happens. Our HOA was sued by an owner for repairs they needed to do to the interior of their unit. Their assertion was that the HOA did not act quickly enough to repair the exterior and prevent water intrusion. The HOA lost to the tune of $20k. A "special assessment" was put on the 160+ owners to pay off that suit. That was a challenging meeting to run.

 

[SFMCjohn]

well, this will probably be paywalled. WSJ copy of a letter sent by the Board President to residents, in April:

closing paragraphs:

We have discussed, debated, and argued for years now, and will continue to do so for years to come as different items come into play.

Other than the future meeting dates, none of this information is new—my hope was to provide a relatively quick summary document to avoid having to constantly search the website for information.

I’ve attached copies of the project estimate, hallway estimate, engineer’s contracted fees, and the January 2021 balance sheet for your reference.

I wish everyone the best, and look forward to seeing you all next week. Sincerely,
Jean Wodnicki
President, Board of Directors

tl/dr/paywall: 7 page letter with 6 page exhibit from Morabito Consultants, Structural Engineers, dated 10/15/2020; one page Structural Remediation Breakdown by Phase, dated 4/15/20; one page Residence Floors estimate, dated 12/9/20; and one page Cash on Hand balance sheet, dated 01/31/2021.

In terms of the project, our cash needs are:

PROJECT ESTIMATE
$16,249,095.40
CASH ON HAND
-$707,003.96
AMOUNT NEEDED FOR ASSESSMENT:
$15,542,091.40

interesting reading, if you can get past the paywall, imo.

to be fair to Ms Jean Wodnicki, reading that the costs associated with the proposed repairs had lead to a new board being recently elected ... also reading she is among the survivors.

 

[auntiebling]

I was art of a 9 unit HOA board. There is an agency or something that audits HOAs for various things. Among them was fiances. The recommendation for ours was $100k in reserve. Through various shady shit happenings where the builder retained ownership of enough units to keep monthly HOA fee alarmingly low it was severely under funded and under maintained.

I used to own a condo in a complex that had (recollecting here) 10 2 story buildings and 6 units in each, and that HOA was on the ball. They had $1m in the reserve. That this HOA only had $700k cash available is shocking

 

[GAJ]

to be fair to Ms Jean Wodnicki, reading that the costs associated with the proposed repairs had lead to a new board being recently elected ... also reading she is among the survivors.

They seem to have been trying to do the right thing but were being fought every step of the way by residents for obvious reasons:

The association had taken out a $12 million line of credit to pay for the repairs and was going through a careful, step-by-step process to get them done, Ms. Berger said. She said that such a process could seem more like moving a commercial tanker than a speedboat, always involving pushback and debate as board members decided on what to tackle first and how much of a cost to impose on homeowners.

“Nobody likes a special assessment,” she said.

Brad Sohn, a lawyer representing at least one resident who has filed a lawsuit against the Champlain Towers South Condominium Association, said on Saturday that residents were facing assessments ranging from $80,000 to as high as $200,000.

https://www.nytimes.com/2021/06/26/us/miami-building-collapse-investigation.html

 

[Holeshot]

As we all know, HOA board members are elected from the ownership. It's a political thing to get on these boards and like real life politics, raising taxes on the governed never seems to guarantee a reelection.

 

[GAJ]

As we all know, HOA board members are elected from the ownership. It's a political thing to get on these boards and like real life politics, raising taxes on the governed never seems to guarantee a reelection.

Indeed as likely many are long term residents who paid less for their units than the proposed $80k-$200k/unit assessments.

I'm going to start a thread when all is said and done for me on Brace and Bolt on two of our 1950s era houses (one 2000 sq/ft the other 1100 sq/ft) to bring foundation earthquake resistance up to modern code.

While I may be a tiny minority here on having earthquake insurance on all our four homes, the cost for the upgrades are very low IMHO, at $5000 so something someone with a pre 1980 home should really consider even without earthquake insurace.

We will be getting back 60 percent of the cost as policy holders with the California Earthquake Authority and a 20 percent reduction on the associated insurance but at $5000 anyone with a pre 1980s home should get the free inspection and cost estimate IMHO.

Mind you those two 1950s homes are both within 400 yards of the Rogers Creek Fault up here.

We had one flake inspect our house but found these guys who do a VERY thorough inspection and reasonable mitigation cost estimates.

Both were on the CEA list of contractors.

https://www.boltdownthebayarea.com/

 

[insyder]

...That this HOA only had $700k cash available is shocking

I'm not really surprised, and its really too bad for the individual owners. It super important for HOAs to have reserve funds available to take care of these kinds of things. And of course, these funds are accumulated through purposefully budgeted dues collection over the years.

You can really see the peril on this type of thing when you see some of these new developments with super low HOA fees. 10-20 years down the road, and the current owners will get the shaft while the former owners paid unsustainably low HOA dues.

 

[Holeshot]

You can really see the peril on this type of thing when you see some of these new developments with super low HOA fees. 10-20 years down the road, and the current owners will get the shaft while the former owners paid unsustainably low HOA dues.

HOA's tend to under budget their reserves especially w/ older residents (fixed income + age) IME. It's impossible to get retirees marked to market on their HOA fees. We manage a master association for about 1800 homes of 55+ adult living residents. It can be like pulling duck teeth...

 

[Eldritch]

I'm not really surprised, and its really too bad for the individual owners. It super important for HOAs to have reserve funds available to take care of these kinds of things. And of course, these funds are accumulated through purposefully budgeted dues collection over the years.

You can really see the peril on this type of thing when you see some of these new developments with super low HOA fees. 10-20 years down the road, and the current owners will get the shaft while the former owners paid unsustainably low HOA dues.

That is called Boomering.