The Weekly Dirt: Lawyers, property managers toe the line at HOAs

An “inherent conflict” exists for attorneys and property managers representing residential associations. 

The boards at homeowners and condo associations across the state hire professional services firms to represent entire communities. But some owners and residents feel that the lawyers and property management firms cross the line and instead serve individual board members’ interests, Lidia Dinkova reports in The Real Deal’s latest issue. 

Because many of those contracts provide for a flat fee with extra charges depending on the services, attorneys and property managers benefit from being asked to send threatening letters or by filing lawsuits against unit and homeowners. “The more services rendered, the more fees involved,” attorney William Sklar said. 

I think anyone living in South Florida has heard of situations or lived in communities where this happens — whether it is based on warranted behavior (breaking association rules) or not. Think about that HOA board member who’s obsessed with tracking visitor parking, illegally towing cars or issuing fines for allegedly leaving your trash can out too long, failing to mow the lawn on time, etc. Beyond those smaller issues, though, are situations like one where an association’s attorney filed a lawsuit on behalf of a former board member against a resident who raised the alarm about potential board misspending. 

Lawsuits over the massive fraud at the Hammocks, one of the largest associations in the state, also took aim at ex-HOA attorneys.  

“The management company and the attorneys are afraid that they are going to get fired should they not completely have the backs of the board members, even if they are engaging in wrongdoing,” said attorney Eric Glazer. 

A lack of state oversight has contributed to the problem. 

“The statute itself creates a lot of incentives for attorneys and associations to work together against residents,” attorney James Bishop said. 

What we’re thinking about: Will Malaysian firm Pacific & Orient sell its partially completed condo tower in North Bay Village to another developer active in the area, like Andy Ansin, Harry Macklowe or Jorge Pérez? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Alex Pirez’s Mocca Acquisitions LLC sold the 13,000-square-foot, seven-bedroom mansion at 4940 Hammock Lake Drive in Coral Gables for a non-waterfront area record of $21 million. The buyer is a land trust. 

Commercial: New York University paid $33 million for a medical office development site in downtown West Palm Beach, where it plans to move its Langone Health to the property at 324 Datura Street. Morning Calm Management sold the 0.6-acre site. 

— Research by Adam Farence

NEW TO THE MARKET 

An ocean-to-Intracoastal compound in Manalapan hit the market for $79 million, about four years after it was asking less than half that amount ($35 million). The 2-acre estate, at 1040 South Ocean Boulevard, includes 200 feet of oceanfront, and a dock and boat lift on the Intracoastal Waterway. Maura Ann Christu with Island Realty PB has the listing. 

A thing we’ve learned 

Billionaire hedge fund manager Ken Griffin opposes casinos. In a letter to the editor published in the Miami Herald last week, Griffin wrote that “measurable research proves” that casinos lead to gambling addiction, higher crime rates and drops in property values. Developer Jeffrey Soffer has long pursued legislation that would allow him to run a casino at the Fontainebleau resort in Miami Beach, including a push this legislative session. 

Elsewhere in Florida 

• The Florida House passed a bill that will allow 16- and 17-year-olds to work longer and later hours (more than 30 hours a week when they are in school, and more than eight-hour shifts). Opponents say it would open the door for the exploitation of child labor and make it more difficult for those teenagers to do well in school, AP reports. 
• Orlando Sentinel journalists, designers and production workers staged a walkout, joining union members across seven newsrooms in a strike against the paper’s owner, Alden Global Capital, Orlando Weekly reports. Former TRD Miami reporter Amanda Rabines, now a breaking news reporter for the Sentinel, was part of the strike and said having a robust newsroom is “an essential part of democracy.” The employees protested Alden’s refusal to pay fair wages, threat to rescind its 401(k) match, and failure to confront pay disparities. 
• A judge on a federal appeals court in Atlanta said Florida’s law restricting Chinese investment in real estate “blatantly violates” protections against discrimination. The panel of judges granted an injunction for two of the plaintiffs suing over the law, according to Politico.