The Palm Bay Yacht
Club stands 27 stories high at 780 NE 69th St., and real
estate listings for its residences – with price tags between
$338,000-$600,000 – boast of Biscayne Bay views, luxury
amenities and an idyllic South Florida lifestyle.
What’s not included in
those effusive property descriptions is that current owners
are being told they must agree to cough up more than
$175,000 each to bring the building up to snuff to pass its
40-year recertification – repairs the condominium
association says will cost $46 million.
The Champlain Towers South Condo Association approved a $15
million assessment in April 2021 to complete repairs in
preparation for its 40-year recertification process. The
oceanfront 12-story building in Surfside collapsed weeks
later on June 24, killing 98 people.
And, just as the Champlain Towers
residents were shocked to receive assessments ranging from
$80,190 to $336,135 for those proposed repairs prior to that
tragedy, many owners at Palm Bay Yacht Club are similarly
shaken, saying they can’t afford to pay, either. |
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Fear, anger, disbelief
and despair are words condo owner of 13 years, Sonia Przulji,
used to describe her initial reaction to the $46 million
dollar loan her condo association wants owners to take on.
Przulji is an ICU nurse and the sole provider of her
household.
“My entire life and livelihood are on the line,” said
Przulji. “If we cannot make this assessment then I lose my
home.”
Przulji is far from alone in her sentiments. Ten dissenting
owners filed a lawsuit in circuit court last October against
the association, its board of directors, the property
manager and others citing “questionable financial
decisions.” Unspecified damages are sought. Among
accusations of fraud and negligence, the plaintiffs claim
the association wasted funds by focusing on superficial and
nonessential upgrades to the building.
“Sometimes, when you have unscrupulous people in leadership
roles, there will be problems like election tampering,
ill-advised spending or outright theft,’’ said attorney Jane
Muir, the Coral Gables lawyer representing the plaintiffs.
“Our clients believe that Palm Bay Yacht Club’s leadership,
including the board and the management company, have made
serious misstatements of fact that rise to the level of
fraud in an effort to persuade the association members to
borrow $46 million.”
“We are fighting against this unjust assessment that many of
our neighbors cannot afford to pay,” said Cristian Murray, a
plaintiff and condo owner since 2017. “They will be
homeless.”
Sydney Harnett, age 84, has lived in the Palm Bay Yacht Club
for 30 years and says she never dreamt of something like
this happening.
“I would be forced out of my apartment,” said Harnett. “My
home, where I’ve lived for a very long time. There are a few
people who live here who have a lot of money, (but) the vast
majority work for a living and do not have a lot of money.
And if [the defendants] want an empty building, that’s what
they’re going to get.”
But the condo association says residents can’t afford to not
pay the assessment. Jonathan Goldstein, a lawyer for the
association, declined to be interviewed for this story but
emailed a statement on behalf of his clients.
Residents of the Palm Bay Yacht Club allege in their lawsuit
that shoring was installed in the condominiums garage
without proper permits. This image is cited as exhibit E.
“The Association vigorously disputes the lawsuit, which in
the Association’s opinion is an attempt to disrupt the
Association’s reasonable efforts to protect the building and
comply with 40-year recertification requirements,” he wrote.
“The safety of all members and compliance with
recertification requirements are the Association’s foremost
concern and responsibility at this point. In pursuing this
project, the Association relies on the professional judgment
of its qualified professional experts and project management
team.”
What Does $46 Million Cover?
So exactly what would the $46 million loan pay for? It’s
hard to say because neither side in the dispute would share
an itemized list of needed repairs that add up to that hefty
figure.
While repeated requests from the Times went unanswered, a
copy of the plaintiffs’ complaint filed with the court and
plans for proposed remodeling and structural repairs
submitted to the city of Miami reveal that extensive prior
repairs and enhancements to the Palm Bay Yacht Club were
made without permits, resulting in numerous citations for
city code violations.
The complaint, filed in Miami-Dade Circuit Court, lists
unpermitted electrical, plumbing, HVAC and other
construction work throughout the condominium building,
including the gym, spa, pool deck, on-site restaurant and
other amenities, such as the parking garage. D&R Contracting
Corp. is cited in the lawsuit as having performed at least
some of the unpermitted work.
The tennis court at Palm Bay Towers is closed; it’s now
being used as a parking lot.
Plans submitted to the city show diagrams of all such work
that will have to be torn out and completed anew, with
proper permitting. Presumably, this is a significant portion
of the estimated $46 million.
The plaintiffs also accuse their condo association of
misappropriating $4 million from an insurance claim for
damages suffered during Hurricane Irma in 2017. Instead,
according to the legal complaint, “defendants required unit
owners to pay a special assessment to make the repairs and
retained the insurance proceeds.”
All the while, dissenting owners and plaintiffs have been
stewing.
“They’ve tried very, very hard to sort of force the unit
owners into agreeing to this $46 million loan,” said Genie
Anderson, a plaintiff and condo owner since 2015. “And how
have they done that? They’ve taken away all our amenities,
and a year ago, they shut down the pool. They shut down the
jacuzzi, they took away our parking downstairs.”
The closed pool at Palm Bay Towers.
The tennis court and the pool are still prominently featured
on MiamiCondoLifestyle.com, but neither is currently open. A
visit to the property revealed parked cars on the tennis
court and the pool surrounded by a fence.
The plaintiffs are holding out against the loan until the
defendants agree to allow another property management team
to conduct an assessment, one they trust to be qualified.
Mistrust of Management
In 2020, the board of directors hired a new property
management company, AKAM Living Services Inc. According to
the lawsuit, that was done “without ratification by the unit
owners.” The lawsuit also alleges that neither the company
nor Douglas Weinstein, vice president of operations for the
company, have a required real estate broker’s license and
are therefore unqualified to serve as property managers.
Photos of citations for unpermitted work on condominium
doors were presented as evidence in the lawsuit against the
Palm Bay Yacht Club condo association.
“We know that we need to have an assessment in order to have
the recertification,” Murray said. “None of the owners have
any problems with that. It is the law. Our problem is that
these assessments have been exaggerated.”
Suspicious of the costs they are being asked to pay and of
the qualifications of those who completed the association’s
assessment, dissenting residents hired Tamara Reyes, a
former Miami-Dade police officer, to investigate.
Reyes founded a company called South Florida Property Owners
Consulting to look into corruption among real estate and
building associations. Her investigation concluded that the
original assessment exaggerated the cost of repairs and
damages by more than $11 million. The lawsuit blames Epic
Forensics & Engineering Inc. for that, saying the company
“exaggerated the damage and structural deficiencies of the
Association’s property.”
The association also stands accused of inappropriate
spending.
“Reyes found over $100,000 in personal expenditures by [the
association’s] staff like Amazon, going out to dinner at
restaurants in New York and gifts,” said Muir. “There is no
explanation for that other than improper spending.”
Even if residents prove they are being overcharged by $11
million, that still leaves them $35 million in the hole,
which is more than double what Champlain Towers South
residents would have had to pay.
Safety First
To be clear, neither the complaint nor the repair plans
allege that the residential structure of Palm Bay Yacht Club
is in any danger of collapse. In fact, pages 2 and 3 of the
building plans clearly state that: “The building is
structurally safe for present occupancy and will remain safe
while repairs are being made.”
Nearly a year after the Champlain Towers tragedy, Florida
Senate Bill 4-D passed to address safety concerns for
condominiums and cooperative buildings. Coastal condominiums
and buildings three stories or higher built between 1982 and
1997 must now undergo recertification by the end of 2024 and
then every 10 years afterward.
For coastal condominiums that were built after 1998, the
recertification must be done once the buildings turn 25,
followed by inspections every 10 years. All other buildings
must complete recertification 30 years after initial
occupancy and every 10 years afterward. Buildings like the
Palm Bay Yacht Club, built before 1982 that have begun the
recertification process, will continue to follow that
schedule.
The new legislation also eliminates the option for
association members to waive and/or redirect certain reserve
funds set aside for building components deemed critical to
structural soundness and safety.
An unintended consequence of the legislation are scenarios
like the one at Palm Bay Yacht Club, where there is little
to no return in value for significant capital investment on
structural soundness and safety. Under those circumstances,
owners are likely to sell out to redevelopers.
At least two hearings have been postponed since residents
filed their suit. The next scheduled hearing before
Miami-District Court Judge Thomas J. Rebull is set for Feb.
13.
In the meantime, residents in this luxury high-rise say they
aren’t giving up.
“We are willing to fight this until the end,” said Przulji.
“I want to stay at Palm Bay. I have no plans on going
anywhere else, I never thought that I would live anywhere
else.”