WCI Bounces $85,000 Check to Hammock Dunes Condo Association
When developers turn over control of associations, problems often occur. Bankruptcy compounds the problems.
Palm Coast, Florida – August 21, 2008 – WCI Communities passed control of the Hammock Dunes Savona condominium to condo owners, as required by Florida law. On July 30, 2008, after much delay, WCI wrote an $85,000 check to the association pursuant to a Settlement Agreement. Four days later, WCI filed for Chapter 11 bankruptcy protection. The check was returned unpaid. WCI says it will not issue a replacement.
Florida law requires that developer’s control of condominium associations and homeowners associations be turned over to property owners once a certain percentage of properties are sold. The transition from developer control to property owner control doesn’t always go smoothly. Property owners in Palm Coast Plantation, a private Intracoastal community in Palm Coast, FL learned this lesson a few years ago. To keep association fees low, the developer had subsidized association expenses without the property owners’ knowledge. When they assumed control at mid-year, owners discovered the budget shortfall. Many services had to be temporarily suspended. The final solution was a doubling of association fees.
The Savona is a luxurious beachside tower condominium in Hammock Dunes, a prestigious private golfing community. The seven-story building houses only 35 units, the largest of which have 2,950 square feet of living area. Here, the association handoff story is just beginning to unfold. After protracted negotiations over several issues, WCI agreed to a settlement payment of $85,000 to the association. With the $85,000 final settlement check returned and WCI in bankruptcy, the future is uncertain. Balcony railings recoated by WCI are showing signs of pitting again. Total rail replacement might cost the association hundreds of thousands of dollars. The association is seeking legal assistance.
Bankrupt WCI still owns several properties in Hammock Dunes. At this time it is unclear which, if any, ongoing and future obligations to individual associations and/or the master association will be met.
emm. interesting
now I’ll stay tuned..