|By JENNIFER KANNE
Posted Saturday, October 12, 2002
LAGUNA HILLS – It's one of those
nagging questions in the back of the homebuyer's mind as pen is put to
paper: What am I signing up for? For each of the more than 900 homeowners
in Laguna Village, the answer is a whopping $9,000 repair bill. The 30-year-old
development's homeowners association has threatened to force the residents
out of their homes if they don't pay $8.36 million to repair damage caused
by water, dry rot and toxic mold. Half the special assessment is due Dec.
1, the rest by June 1.
The action has angered the residents, who
allege that the association board neglected the property and failed to
properly plan for the repair costs. The board has known about the problems
and has been authorizing repairs for at least the past couple of years,
according to board member Dan Brock. But the situation became urgent after
experts called in this summer to make an evaluation advised the board to
make full repairs as quickly as possible to protect people from injury
and the board from lawsuits. Special fees like this are uncommon but not
unprecedented – homeowners in a smaller Newport Beach community each face
a $10,000 repair bill, and residents in a Laguna Niguel development are
being asked to pay $3,000 each. State law allows homeowners associations
to charge such fees for "threats to personal safety." These "special assessments"
– part of the fine print in the parade of papers that many homebuyers just
skim before closing the deal – can be levied by a board without a homeowner
vote. And the assessment can be charged immediately.
The Laguna Village homeowners – concerned
about rotting balconies, toxic mold and water damage – want the repairs
to be done but contend the board surprised them with the amount of the
repair costs and the demand for the money so quickly. "It's ridiculous
to just blindly charge people all at once," resident Edward Klarquist said.
"I don't have that money." Neighbors in this quiet community on the northern
edge of Laguna Hills are scrambling to hire attorneys to fight the fee,
but Debbie Evans, vice president of a community management corporation,
said such efforts are rarely successful.
Resident Deanna Wolfe thinks she and her
neighbors have a case, in part because their association recovered more
than $7 million in a 1989 construction-defect lawsuit. Wolfe wonders where
that money has gone. The association receives annual payments as part of
the lawsuit settlement, but the board has refused to give residents specific
information about how the money has been spent. The association's attorney,
David Cane, said proceeds from the lawsuit has been used to pay for increased
insurance premiums and regular maintenance, but that money can't cover
the additional repairs. Wolfe also argues that a 1994 memo to residents
in which the board notes "moisture and dampness conditions" in some units
indicates the board has known about the problems and could have acted sooner.
"They've been putting Band-Aids on problems," Wolfe said this week, pointing
to rotting wood along the base of her house. "I've watched this place absolutely
deteriorate." Board member Brock said he is sympathetic to his neighbors,
but can't think of another way to make the repairs and avoid future lawsuits.
"What if we don't fix it and someone gets hurt?" Brock said. Residents
have appealed to consumer groups, government agencies and the city, finding
sympathy but not solutions. "They can displace 914 families," said Patricia
Johnson, who might move out of her condo. "That's something to think about."
Even if she pays this fee, Johnson said, she is worried she'll have to
come up with more. "What's to say next time it won't be $50,000?" she said.