Article Courtesy of  The Palm Beach Post

By Jane Musgrave

Published January 4, 2006

WEST PALM BEACH — Saying a volunteer board has hopelessly mismanaged the reconstruction of the hurricane-ravaged Tiara condominium in Riviera Beach, a unit owner on Tuesday filed suit asking a judge to boot out the board and appoint a professional manager to decide the fate of the once-regal high-rise.

In the 51-page lawsuit filed in Palm Beach County Circuit Court, unit owner Ali Kas minces no words in describing what he calls the ineptitude of the board of directors that is overseeing what has blossomed into a $100 million-plus project.

"The present board has inefficiently squandered the association's revenue, has failed to account for same, has failed to adequately report how the association's 2004 collected revenue and insurance proceeds have been allocated, has used revenue collected to further self-serving causes that unjustly enrich the board members... " are just a few of the claims in the suit attorney William Wohlsifer filed on behalf of Kas and other unit owners.

Reached at his New York office, Kas said he could no longer watch the board of directors soak unit owners for the astronomical costs of rebuilding the 42-story building that was devastated by Hurricanes Frances and Jeanne in 2004.

To cover a $20 million shortfall, the board in August assessed unit owners between $170,000 and $250,000 each. With money running out again, the board is considering another assessment to cover an anticipated $50 million loan.

"It's mind-boggling the things that are going on," said Kas, who is refusing to pay the roughly $1 million assessment on the five units he owns. "There's a lot of money that is gone. There needs to be a government investigation of these people."

The suit is filed on behalf of the owners of the 320 units. Kas declined to say how many owners are joining him, explaining he is in the process of e-mailing them.

While he hadn't seen the lawsuit, condominium association President Eddie Kisco said he wasn't surprised by Kas' actions.

Kas has made it clear he distrusts the board, arriving at board meeting with a video camera in tow, Kisco said.

Kisco readily admits that the costs of repairs are skyrocketing. Unit owners are being forced to dig deep, he said, and foreclosure proceedings have been started against some who have been unable to pay.

"We have a major cash-flow problem," he said. "The only source of revenue we have is to assess our owners so we can continue the project."

He blames the money woes on Citizens Property Insurance Corp. The state-sponsored homeowner insurer of last resort paid about $41 million for the repairs. It then sent $9.5 million with the caveat that the check would be its last, Kisco said.

The board refused to cash it, believing Citizens should cover at least $50 million more, Kisco said. The board sued Citizens in September, and the lawsuit is still pending.

The insurance company's refusal to pay for the repairs is particularly galling because its representatives dictated how the rebuilding would proceed, he said.

For instance, in his suit Kas criticizes the board for spending $30 million to dry out a building that was leaking.

Kisco said the decision was made by Citizens.

"Mr. Kas has difficulty understanding that Citizens was calling the shots," he said. "He thinks it was the board, but Citizens was driving the board."

Kas blames the costly repairs on the board's hiring of Southern Construction Services, based in West Palm Beach. Already under contract to repair the Tiara's balconies when the storms hit, it was hired to do the repairs though Kas claims it is unqualified.

Further, Kas said, there is evidence that the building was fatally compromised by Hurricane Wilma this year and should be condemned.

In addition to removing the board, he wants a judge to order a complete audit of the project and stop additional work until all financial questions are answered.

While there's no doubt Wilma further damaged the building, Kisco said engineers have recently determined it is structurally sound.

The past 18 months have been extremely difficult, Kisco said, and residents should be able to move back in by the end of this year.

"But everyone thinks we're moving in the right direction," Kisco said.