Century Villagers sue investor for trying to rewrite rules

Article Courtesy of The Palm Beach Post

By Tony Doris

Published December 3, 2015


Nine unit owners in a Century Village condo building have sued another owner who they say has tried to wrest control of the building, change its rules and bring in renters, including youngsters not eligible to live in the retirement community.

The unit owners are backed by the 80-something developer of the complex, H. Irwin Levy, who promised in July that he would use his resources to protect them from Palm Beach Gardens investor Donald Kelly, who bought most of the units in their Sheffield O building and gained the voting power to preside over its association.

The kicker: Kelly, as association president, might have his legal expenses covered by Century Village’s officers and directors liability insurance.

“So we in effect are defending the black knight,” said David Israel, president of United Civic Organization, which oversees the sprawling, 600-building development. “It makes my skin crawl.”

Kelly previously declined comment on the dispute. His attorney, Richard S. Cohen, could not be reached for comment.

Kelly bought about 15 of the Sheffield O’s 26 condo units and obtained an interest in about two more. The suit, filed Nov. 2, alleges he wrongly contends he has the right to change the condo rules and lease out his units, which allegedly would reduce the value of the remaining units by more than $15,000.

“To the extent that Kelly purports to modify the condominium covenants and bylaws, such that they no longer guarantee the long-standing and established retirement neighborhood scheme, Kelly would deprive the affected unit owners of the very lifestyle they were promised when they purchased their respective units,” the suit says.

Changes to those covenants require approval from the other owners and of WPRF Inc., the corporation, controlled by Century Village developer H. Irwin Levy and his son, Mark, that manages the community’s recreation facilities, the suit says. Kelly doesn’t have those approvals, it says.

The lead plaintiff in the case, condo owner Nancy Salmi, 71, helped bring the issue to light several months ago, after investor Kelly sent her a letter saying he intended to buy her unit.

“I am in the process of taking steps to dissolve the Association of Sheffield O whereby all of the apartments that I do not own would be forced to sell to me at the Palm Beach County Appraisers value,” Donald T. Kelly, wrote to Salmi on March 2.

She was happy to learn in July that the investor — after Levy pledged to step in — dropped those plans. But the lawsuit says Kelly then went ahead and retroactively changed rules to legitimize renting his condos.

The lawsuit aims to reverse the rule changes and prevent forced sales at unfair prices.

Kelly’s alleged attempt to force sales, “goes beyond all bounds of decency and is odious and utterly intolerable in a civilized community,” the suit says. His conduct, it says, has caused “severe emotional distress.”

The suit also alleges that Kelly breached his fiduciary duty to the Sheffield O Condominium Association. If that’s true, the liability insurance company might rule he is not eligible for coverage, says Joy Vestal, a member of the United Civic Organization board of directors.

Either way, says UCO president Israel: “It’s problematic over there: underage people, short-duration rentals — everything most of us came here not to have.”