Palm Cove residents may lose homes in bitter battle with developers

Jim and Robin Harvey, 57 and 54, hired a corporate officer for their business in Ohio and freed themselves of commitments so they could move to Florida, buy a retirement home and spend the rest of their lives in paradise.

They thought they found a stable piece of that dream in 2007 when they purchased a condominium in the Palm Cove of Bradenton complex, 4550 47th St. W.

But the Harveys’ retirement dream is being swept up in a contentious decision to terminate the Palm Cove of Bradenton Condominium Association after the Minnesota-based firm Riley Family Corp. bought the majority of the complex since January. It now owns more than 90 percent of the 348 units.

Without a condominium association, often referred to as a homeowner association, property owners lose the ability to participate in board decisions, vote on policies and regulations, or maintain appeal rights with regard to decisions made by the board.

On Monday, the Palm Cove of Bradenton Condominium Association voted to change its declaration to allow for the adoption of a termination plan for the association itself. On Wednesday, the condo association voted for a plan of termination. The condo owners say they were told they may have to be out in 90 days.

The Riley Family Corp., under the name Palm Cove Apartments LLLP, owns enough of the complex to cast deciding votes in condominium association meetings, according to attorney Kevin Hennessy of Bradenton-based Lewis, Longman & Walker, who is representing some of the minority property owners. The company is already renting out many of the properties it owns as apartments.

According to Hennessy, the developers, represented by attorney Darren Inverso of Sarasota-based Norton Hammersley, are not following the law in accordance with amendments passed in 2007 and 2015. Instead, they’re electing to follow the original 2006 law, which doesn’t provide protection for minority owners or those who have homesteaded.

Per a Florida statute signed into law in 2007, if 80 percent of a condo association votes to terminate and the decision is not opposed by at least 10 percent, the termination plan can go forward. The statute was meant to give developers a better chance to buy blighted properties in neighborhoods severely affected by hurricanes that swept the state in 2004 and 2005, Hennessy said.

The original Florida statute, 718.117, required 100 percent of the condo complex’s property owners to agree to dissolve the association.

But an unintentional consequence of the 2007 law left the minority of property owners who wanted to stay with few options if the condominium association was dissolved by the majority. House Bill 643, sponsored by Florida Rep. Chris Sprowls, R-Palm Harbor, was filed and signed into law in 2015 to give minority condo owners better protection and more options when associations are dissolved.

“They’re saying they can use the 2006 law because we signed our contracts in 2007,” Jim Harvey said. “But a law is a law.”

Sprowls agrees.

“This is a shameful attempt by the bulk buyers and their council to circumvent the will and intent of the Legislature,” Sprowls told the Bradenton Herald in a phone interview. “They’re saying we understand what the law says; we don’t think we have to comply with it.”

Inverso cited potential litigation and didn’t elaborate on the situation.

“At the end of the day, the plan of termination is going to go forward for a number of different reasons, none of which I can comment on right now just because of pending litigation,” he said.

Several minority owners said other parts of the association’s rules were not followed, such as providing meeting materials within an adequate time frame before the meeting. And one property owner, Russell Hoeksema, 79, said he couldn’t understand what he was voting for when called into the meeting. Palm Cove’s high-ceiling clubhouse made sound echo and for many of the elderly property owners, the meeting was more or less inaudible.

“You can’t hear a blasted thing in there,” Hoeksema said. “I don’t know what’s going on. I don’t know if I’m being hosed or not.”

He did have an attorney with him at the meeting.

The decision to terminate the Palm Cove condo association might lead to a legal battle. The 2015 law built in a mediation process for minority property owners, Sprowls said.

“In the bill that we passed, the biggest highlights are we built in additional rights for minority owners,” Sprowls said. “In this case, the people who own 10 percent of the complex, so it’s things like rights to have a seat on the board and rights for mediation through the (Florida) Department of Business and Professional Regulation as opposed to going through what might be a more expensive court process.”

The second part of the 2015 law requires that those who purchased their homes from the original developer and homesteaded be paid the full, original purchase price for the property. From the impression the Harveys, Hennessy, Sprowls and other minority residents at Palm Cove are under, the Riley Family Corp. has no intention to follow this part of the law.

For example, the Harveys said they paid about $140,000 for their Palm Cove condo in 2007. If it is assessed and sold at current-year value, the Harveys will receive approximately $80,000, and that’s what they believe the developers intend to do.

Another provision of the 2015 amendments requires ample time for the property owners to find a new home. The Harveys are afraid they’ll be forced to move within 90 days after Wednesday’s meeting.

Many of the minority homeowners, including Cheryl Ann Fritz, think the decision by the developers is the opposite of the American Dream. Fritz’s voice broke as she discussed the possibility of losing her home.

“I get that I made a bad business decision buying here,” Fritz said. “But it’s one thing to lose money on property. It’s another to be kicked out of our own property in the U.S. And with what they’re offering, we can’t even afford to buy a new place.”

This story was originally published October 19, 2016 at 5:09 PM with the headline "Palm Cove residents may lose homes in bitter battle with developers."