SIESTA KEY - A man who defaulted on four units at the Crystal Sands condominiums is leading a push to allow more short-term rentals at the Crescent Beach high-rise, setting up a battle over its future.
Many residents, who use their condos as homes and vacation units, fear the option of one-week rentals would open the floodgates to party-first visitors with no intention of maintaining the integrity of the property.
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Owners of units at the Crystal Sands condominiums on Siesta Key are in a battle over whether to change the bylaws to allow more one-week rentals. |
rentals unless the unit is blacked out the following week - keeping a minimum two-week buffer between renters.
Morgan and his wife, Tracey, bought five condo units and a duplex at Crystal Sands, 6300 Midnight Pass Road. The couple paid $4.08 million for the units between April 2003 and December 2007, defaulting on $3.8 million in loans, records show.
As Morgan took out higher mortgages on each unit, he stopped paying the bills, but he continues to collect rent from vacationing guests.
He also transferred the properties to different companies he owns, a tactic called "crowding the title" that is often used to slow the foreclosure process by making it more difficult for lenders to seize property, courts records show.
Morgan, who lives year-round at the complex, did not return calls and emails seeking comment.
He sent the petition to condo owners Dec. 5, asking them to drop the minimum stay to one week and citing the benefit of increased commissions for the association to bolster amenities.
He says the change could have generated close to $10 million in additional rental revenue during the past six years, pumping another $1.5 million into the home owners association.
"It is your fiscal duty to do what you can to secure our condo association's future financial stability," Morgan wrote in the email. "The vote is an easy fix to solve a number of potential monetary problems and conflicts."
Other condo owners point to Morgan's financial trouble as a enough reason not to trust his proposal.
They also are concerned that a one-week rental option would reduce property values and burden their association with an increase in repairs, maintenance and security costs.
Morgan rents out his units on his own, avoiding a 15 percent commission to the on-site rental company that benefits the association - the very financial gains he argues for, condo owner Sheri Dwyer said.
"He's lining his pockets but it's going to hurt the rest of us," Dwyer said. "I don't know how the bank allows him to get away with this. People don't even know what he's doing, and that's what's so frustrating."
About 38 owners at Crystal Sands now rent units independently and 54 go through the association.
A 2009 proposal to allow one-week rentals failed by eight votes. About 15 condos have changed ownership since.
The vote on the new proposal is slated for January.
"Everything is working just fine the way it is," condo owner Peggi Higginbotham said.
"The two-week minimum attracts a nice class of people, many who come year after year."