by Terry Rogers
In February 2019, condominium and villa owners in Hearthstone Manor were notified that balconies in as many as 97 units were unsafe for residents to use. An email sent to owners revealed that the issues existed in 20 of 22 3-story buildings. The email explained that an inspector was able to squeeze water out of beams designed to support the balconies, indicating that the beams would need to be replaced.
“There are a total of 97 beams identified, through an inspection, as needed to be replaced,” the email from Neil Richards of SeaScape Property Management, reads. “The estimate to complete this project is $500,000. We know this is a lot of money which is why we are handling this very carefully and systematically. As it currently stands, there would need to be a special assessment to all condo owners to cover this expense. This is not a judgemental repair, this is a mandatory repair.”
The email continued that the property management company would establish a Resident/Community Committee to work with. A committee member would be selected to join the board of the homeowners association (HOA) and condominium owners association (COA) for Hearthstone. The developer, Country Life Homes, who has two representatives on the board, Elmer and Michael Fannin, was open to this option.
“When I finally spoke to Mr. Richards personally about my unit, he did not tell me the status of my unit,” Nancy Peralta, one of the condo owners, explained. “He just said he had sent out emails to everyone. I said that I had read them but they did not indicate any unit in particular. At that time, the two test units had been completed by the vendor, but he failed to tell me my unit was one of them.”
Other residents, many of whom prefer to remain anonymous because they are afraid of retaliation, echo the comments from Peralta. One explained that they found a dark, tar-like substance on their balcony as far back as 2010. At that time, Country Life Homes handled the property management service and they were able to simply call them to get the stains cleaned. The following summer, a cherry picker appeared outside their apartment and fascia, particle board and other items on the balcony were replaced. Country Life Homes confirmed that they did find issues with balconies in 2010, some of which were “out of warranty.”
“Back in 2009, we did an inspection and we discovered some leaks and issues with balconies,” Mike Fannin said. “About 10 to 12 had some water issues so we replaced all of them that were impacted at no cost to the homeowner, even though they were out of warranty. Most of this is normal maintenance while some is neglect from the previous property management company.”
Fannin explained that Seascape had taken over the property management in the past year, replacing Wilgus Associates who had managed the property until 2018. He explained that since the majority of the balconies are out of warranty, the cost of the repairs must be borne by the COA. The COA also covers the villas so the additional costs must be assessed against those units as well, even though they do not have balconies.
“I am a villa owner, moving here from New Jersey last November,” Pat Mafull said. “I found out about this disastrous problem with the condo building balconies. Then, I was told since the villas are considered condos, we are monetarily responsible for this repair, which is totally ridiculous because the cause is not regular wear and tear but shoddy construction and substandard material. ”
In June 2019, Seascape called a meeting of the COA in order to add an additional board member and to vote for an increase in COA fees. The assessment would amount to $22 per week for each unit, according to Fannin, or $1,144 per year, something many residents say they cannot afford. According to the bylaws of the COA, 60 percent of the residents had to be present at the vote in order to have a quorum, but less than 30 percent were there. This was confirmed by both Fannin and Chris Nichols of Seascape.
“Because there was not a quorum, the assessment vote passed,” Fannin explained. “There were not enough people there to vote against it, so it will be implemented.” However, according to Delaware statute, when an organization requires a quorum and it is not met, votes taken during the meeting are not valid and cannot be implemented.
Residents are also questioning why the COA/HOA does not have funds to cover the cost of the repairs. During the meeting to discuss the new assessment, Seascape informed those present that they were unable to understand the bookkeeping system used by the previous property management company and that $200,000.00 of the reserve funds could not be accounted for. Currently, owners pay approximately $1,875 per year in HOA/COA fees despite the fact that more buildings have been constructed, adding more units that should reduce the fees over time.
“Many of the people that have bought the condos and villas are retired,” Mafull said. “They are living on a fixed income. If they pay this one special assessment, it will set a precedent and there will be more. ”
Fannin says that his company and the property management company have done all they can to resolve the situation with as little impact on the homeowners as possible.
“Seascape worked out a deal with the contractor and they agreed not to be paid up front,” Fannin said. “Most of the owners we have talked to are fine with the assessment as they understand that maintenance costs happen. This is like an interest free loan for a year for the homeowner to have the repairs completed.”
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