A Pembroke Pines condo complex that was evacuated following monthslong structural safety concerns and allegations of prior board members’ mismanagement will hit the market.
Heron Pond, a 304-unit complex at 8400 Southwest First Street, will go up for sale and the condo association will be dissolved, after engineering reports found extensive deterioration that needs costly repairs, according to a report by Daniel Stermer, the property’s court-appointed receiver.
The plan to sell the 25-acre property, consisting of 19 two-story beige buildings, marks the latest chapter for embattled Heron Pond.
Stermer was appointed as receiver in April, after the city of Pembroke Pines deemed six buildings and 26 units at seven other buildings unsafe and evacuated them beginning last summer.
“Any prior assessment of damage and cost to rehabilitate the buildings that was done pre-receivership were significantly inadequate to assess the true nature, scope, and extent of the damage facing the association,” Stermer wrote in his report last week.
As repairs were ongoing at four buildings, engineers discovered deficiencies in the lateral load resistance in the buildings, according to ACG Engineering Services’ July 24 report. The lateral load is the wind load support system in buildings.
Because these deficiencies can’t be seen, but are hidden in the “bones” of buildings and are due to inadequate design and construction, it’s likely that other Heron Pond buildings also have the same issue, ACG said in its report, recommending the evacuation of all buildings. ACG said the complex should remain vacant at least until the end of hurricane season or until the required repairs are completed.
After ACG’s report, all residents received evacuation notices last month, giving them until Thursday to vacate their units.
Stermer, who previously merely mulled over the idea of selling Heron Pond, is now proceeding with the decision. On Aug. 16, he sent a letter to unit owners notifying them of his intent to “move forward expeditiously” to seek court approval for a sale.
“All of the information reviewed by the receiver and his team to date solidify the conclusion that the property has been subject to substantial damage and destruction and cannot be repaired … within a reasonable period of time,” Stermer wrote in his report.
The cost of all structural repairs would require a special assessment that would break down to at least $40,000 per unit, according to Stermer’s report.
In a non-binding poll of unit owners, 86 percent of those who voted agreed with a sale. Out of 155 unit owners, 107 cast ballots, representing 80 percent of the 304 units, Stermer said in his report.
The sale would require court approval and termination of the condominium association. Next, Stermer also will ask for the court’s green light to hire Avison Young Fisher Auction Company to lead a competitive sale process. Attorney Dennis Mele of Greenspoon Marder will be retained to provide a detailed analysis of the property’s future development potential in a push to obtain the “highest and best price,” Stermer wrote in his report.
Lilian Nesper, a 66-year-old unit owner, told The Real Deal she voted in favor of selling Heron Pond even though she doesn’t want to leave the home she planned to live in during her retirement.
“We are being told by the experts that the damage is greater, beyond what we were originally told,” Nesper said.
The projected $40,000 assessment on each unit owner for repairs is a minimum, meaning owners could be on the hook for tens of thousands of dollars more, she said.
Heron Pond was built in 1988 as apartments, and converted to condos in 2006. Other South Florida aging complexes face similar problems, though not all cases are as severe. After the deadly Surfside condo collapse in 2021, state lawmakers imposed more stringent structural integrity and recertification requirements that necessitate costly repairs. The first milestone inspection for buildings over 30 years old is due by year-end.
The issues at Heron Pond have triggered a complaint by the Broward State Attorney’s Office, the South Florida Sun Sentinel reported.
Some at Heron Pond claim that the structural issues at the complex may be rooted in an alleged scheme by ex-board members who acted through a secret entity. Federated Foundation Trust amassed at least 109 units, and people behind the trust took a majority on the board and allegedly mismanaged the complex, perhaps as part of a ploy, according to court filings.
“It is believed that these individuals may have wanted the association’s common elements to fall into a state of disrepair so that they could acquire more units … at a reduced/discounted cost,” James Rhodes wrote in his petition to appoint a receiver. Rhodes became the association’s president last fall and filed the motion for the appointment of a receiver this year.
In court documents, some unit owners point to one person as the primary individual behind Federated Foundation Trust: a man who uses the alias Peter Patel, but whose real name is Piyush Viradia. In nine lawsuits filed by unit owners against Patel since October, unit owners have alleged negligence and failure to maintain Heron Pond. Since then, all plaintiffs have sought to amend their complaints and substitute Patel for Viradia as a defendant. Patel resigned from the board last fall, amid the mounting litigation against him and the association.
Keith Grumer, an attorney for Federated Foundation Trust, denied any alleged wrongdoing by the trust and called the allegations “fantasy conspiracy theories.”
“They didn’t intentionally amass units to gain control [of the board]. They amassed units because it was a good business venture,” Grumer said. “Little did they know the condition of the buildings.”
Furthermore, Federated didn’t mismanage Heron Pond, Grumer said, arguing that it wasn’t in control of the board and mismanaging the complex would have just driven down the trust’s “huge investment” in the complex.
Nesper said she doesn’t know if any scheme was playing out at Heron Pond. But she is certain that in recent years, maintenance at Heron Pond was practically nonexistent.
“In the past years, the property management companies were changing constantly,” she said. “You would go into the office and they were like, ‘Oh yeah, yeah, we are going to fix it.’ [Then] all of the sudden, they hired a new management company.”
It’s unclear how proceeds from a sale would be divided among unit owners. Stermer didn’t immediately return an inquiry. At other condo complex sales, distribution of funds included basing it on an owner’s percentage stake in an association, or basing it on a unit’s market value.
In his report, Stermer included a template of a letter unit owners can send their lenders to seek mortgage relief. Outstanding mortgage balances on units also would have to be paid from the proceeds.
“I just hope there is something,” Nesper said, “left to move forward.”