Condo rules clash with market realities

When some owners of condos in Pelican Cove wanted to hold an open house

to help with sluggish sales, it set off a storm of controversy.

Article Courtesy of The Herald Tribune

By MICHAEL POLLICK

Published February 14, 2007

 

SARASOTA COUNTY -- Barbara Simons gazes at the serene view of Sarasota Bay that dominates the condominium she inherited from her mother, a spacious second-story waterfront hideaway within the gated and lushly landscaped enclave of Pelican Cove.

But Simons is not serene. She is furious with Murray Sherry, the outgoing board president of the south Sarasota complex, and with everybody else keeping her from holding an open house to get out from under the condo -- to her a half-million dollars on the hoof.

"If you wanted a three-bedroom, three-bath on the water anywhere else, it would be twice as much," Simons says, waving a hand toward the floor-to-ceiling glass patio doors and decks skirting the living room and master bedroom.

The problem with Pelican Cove is that not enough people know about the place. Simons figures an open house or two could help the place compete for buyers being lured to newer waterfront dwellings by slick marketing.

She listed her condo a year-and-a-half ago. Two price reductions, or $100,000 later, she still has no takers.

Pelican Cove is a classic example of the realities of today's Southwest Florida real estate market colliding with condo rules from a genteel, slower-paced time.

With five miles of narrow winding roads and heavy vegetation, the 75-acre property has as its centerpiece a boat basin with 83 slips hosting boats up to 30 feet. There are 731 units, most built during the mid-1970s to mid-1980s.

In the past, the number of units for sale has usually fluctuated from a dozen to three dozen.

But today, after years of rising prices, the region's real estate took a nose-dive from its stratospheric levels, with the descent beginning in earnest in mid-2005.

The current price range on Pelican Cove listings is $219,000 to $599,000. The top used to be $699,000, says Pelican Cove resident and real estate agent Tony Lingrosso.

"There's only been one sold in January. Asking $285,000 and it sold for $210,000. It needed some improvement."

Simons, who removed all the furnishings from her condo and had the place freshly carpeted and painted, listed initially for $649,000, but has dropped it to $549,000 in the intervening 18 months.

Now, there are at least 65 units up for grabs, not counting For Sale by Owners. That works out to nearly 10 percent of the stock, a worrisome figure to sellers who are reaching out for fresh solutions.

'Except as may be'

Longtime residents say there has never been an open house or even a garage sale at Pelican Cove. Not once since developer Robert A. Morris started tucking away four-plex condos between the trees in 1972.

In fact, the cove's "2007 Telephone Directory and The Rules We Live By" is unequivocal in its disallowance of those events. On Page 21 it states: "Open houses for the purpose of selling your unit are not allowed."

What opened the door to the possibility was a change seven years ago in the declaration of condominium -- the seminal document in the creation of such communities -- that somehow, apparently without anybody noticing, offered the vague chance of a future open house if approved by the nine-person board of directors.

"Sold, for-sale, for rent, open-house and similar signs or window displays or activity shall not be permitted anywhere in the condominium property except as may be permitted from time to time by the board."

Before that there was no "except as may be," said Lingrosso, who likely has more Pelican Cove listings than anyone in town.

"The rules got manipulated, in my estimation."

Open house rebels

In September, three sellers -- Judy Papalia, Jeanne Williams and Laurie Cheiffetz -- banded together to try out the relatively new language for an open house.

In December, the board approved the trio's basic plan.

Any of the 60-plus sellers at Pelican Cove would all be able to have a single open house day for two hours on Feb. 25.

The group would post a $500 check as collateral against any property damage, and they would have to split the costs of two Pelican Cove employees acting as extra security guards for four hours.

The guard at the gate would inspect the driver's license of would-be open house visitors, record their license plate numbers, and give them a brightly colored identification card to display on their dashboards.

"And then on the way out we'd collect those and sort of close the loop," Sherry said.

The two sides dispute how much money the board was asking them to post.

Sherry says $200 in security and the probability of a returned deposit check.

Papalia, one of the rebel open-housers, said real estate agents were balking about putting up the $500 in escrow, so it was going to end up coming from three or four core sellers. Also, if more than 15 houses were held open, the security payment was going to be $300 instead of $200, Papalia said.

"It got to be $1,000 easy," she said.

Still, the sellers were doggedly pushing ahead.

But once the upcoming Feb. 25 date was displayed for all to read in the community newsletter, the real backlash set in.

The board received a petition signed by more than 80 owners who did not want any open houses, thank you very much.

"After that was this whole furor among people who didn't want to have an open house, because people would be allowed in and we don't know who they are," said Sherry, board president until Saturday, when the annual meeting and board elections will be held. "My term isn't up but I'm giving up the presidency. Three years out of four. Enough is enough."

The petition prompted a second vote at the board's January meeting. That tally was far closer, and the board requested that the open-house advocates meet with the wavering board members and work it out.

At that point, the open house crowd felt they were beaten and withdrew.

Sherry takes that as the end of the story, at least for now. "At this point nobody is asking for it. If people ask for it, the board will have to consider it again."

Meanwhile, the brouhaha over open houses has prompted at least one slight change at Pelican Cove.

It seems that one of the day-shift gate guards was going a little overboard in his zeal to keep residents safe. If someone claiming to be a real estate agent showed up at the gate, he insisted the person show him a real estate license along with a driver's license.

"We have changed that," Sherry said. "Now as long as they can show a business card with a driver's license, it is sufficient."

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