I vaguely remembered
speaking with Howard Fellman.
In my defense, it was 28 years and many columns ago. At the
time, Fellman was a 28-year-old Boca Raton man refusing to
be bought out of his condo.
He had paid $65,000 for a three-bedroom, two-bath condo on
the northeast corner of Palmetto Park and Powerline roads,
directly across the street from his computer business.
The garden-apartment condo complex was called Mission Viejo
in 1994. And 175 of the 176 units there had been snapped up
by a Michigan investor. Fellman was the one condo owner who
refused to sell.
“He’s not offering me enough to buy a comparable one in the
area,” Fellman told me at the time. “Everything else is
either smaller or more expensive. And nothing is as close to
work.”
Condo holdout hangs tough
The developer wanted to dissolve the condo association so he
could run the place as a rental community without having to
abide by the lengthy list of condo regulations.
And Fellman stood in the way, legally armed with the
founding documents of the association that required 100
percent of the condo owners to consent to a dissolution of
the property’s condominium designation.
Negotiations started out cordially. The developer said he
offered Fellman $100,000 cash to sell, and Fellman turned
him down.
When I wrote about it, the cordial phase had ended: The
developer had found other ways to pressure Fellman into
considering a sale.
The developer made himself head of the condo board, raised
maintenance fees by 70 percent and levied a $10,000 special
assessment against unit owners — which was just him and
Fellman.
All to get Fellman out. But it didn’t work. And it didn’t
work when the developer contacted Fellman’s mortgage holder,
and bought the $40,000 mortgage on Fellman’s unit, then sent
him mortgage payment coupons the day before their due date
and prohibited pre-payment of monthly payments.
“I guess he thought I would fold my cards,” Fellman told me
at the time.
Instead, Fellman paid the extra fees, the assessment and
didn’t miss his mortgage payments.
That’s when I talked to Fellman last. But Monday, we talked
again.
Although it had been nearly 30 years, some things hadn’t
changed.
"This has gone on now for half my life," Fellman said.
He still owns that same unit, and he’s still the only
holdout in what is now called Crystal Palms.
That Michigan developer is long gone, having sold the condo
complex to the Scully Company, a property development,
construction and management company that operates apartment
complexes mostly in Pennsylvania, New Jersey, and Florida.
Fellman now has a renter in his unit. It’s the only one not
controlled by the property development company that owns the
rest of the units at Crystal Palms.
“During most of their tenure, we’ve been at relative peace,”
Fellman said. “They rent out their apartments. I rent out
mine.
“I leave them alone, and they leave me alone.”
Trouble emerges
with new owners
Crystal Palms advertises itself to renters as “the best in
luxury apartment living.”
“Beautiful Crystal Palms offers a lighted tennis court,
basketball court, heated swimming pool, car wash, Fitness
Center an easy access to everything in warm, sunny Boca
Raton, Florida,” it says.
Three-bedroom units, like the one Fellman owns, rent for as
much as $5,400 per month.
Fellman’s years of laissez faire co-existence are being
challenged again, and the condo law that once protected him
many years ago has changed in ways that make it tougher for
holdouts.
In 2007, Florida lawmakers changed condominium law to say
that only 80 percent approval, not 100 percent, from unit
owners was enough to trigger a dissolution of a condo
association.
The rationale was that this would facilitate making timely
repairs to hurricane-damaged buildings or help rescue
dilapidated condos hurt by downturns in the real estate
market.
But it also lured investors to buy enough units in
condominiums to control the board, and then dissolve the
condo and force the remaining owners to sell at a value
determined by an appraiser selected by the investor-run
board.
In some cases, owners were being forced to sell below their
purchase price, leaving some people homeless in a community
they could no longer afford.
In 2015, the Florida Legislature amended the law to try to
fix this.
The current Florida law says the holdout owners would have
to be offered a fair-market price or their purchase price,
whichever price was higher.
“This legislation will ensure that bulk buyers are not able
to artificially drive down property values and then fail to
compensate condo owners for the purchase of their units,”
then-Florida Sen. Jack Latvala said in a press release
announcing the changed law.
But Fellman said it’s still unfair that a private investor
can use the law to coerce another owner to sell against his
will.
“The condo laws were passed to establish procedures for unit
owners to peacefully co-exist, not for an investor to
confiscate private property. It’s as if Boardwalk is
confiscating Park Place,” he said.
When Crystal Palms voted to make it easier to terminate its
condominium designation last year, the vote was 175-1, just
as it was the first time.
But instead of giving up by evicting his tenant, and
agreeing to a sales price, Fellman hired a lawyer and took
the association to court, claiming that the original 100
percent requirement in the condo documents couldn’t be
altered.
He lost. In April, Palm Beach County Circuit Judge James
Nutt ruled that the association’s actions were within the
law.
“As a matter of law, anyone purchasing a condominium unit
goes into the relationship with their ‘eyes wide open’ that
their rights under the Declaration, including the percentage
vote required for termination, could be altered by an
amendment,” the judge wrote.
Fellman’s not done fighting, saying he will appeal, even
though at this point, he’s hemorrhaging money through legal
fees from the $200,000 evaluation the investor-group has put
on his unit.
“This is costing me a bloody fortune,” he said. “There is no
rainbow at the end of the road for me.
“But my case, as it stands now, will be used as a poster
child for developers to confiscate property from condo unit
owners.
“And it will happen to anybody who doesn’t have the deep
pockets to defend themselves, and happen mostly to senior
citizens.”