Miami Herald Column: “Association Leaves Too Many Unanswered Questions in News Report on 300% Increase”

The firm’s latest Miami Herald column appears in today’s edition of the newspaper and was authored by shareholder Evonne Andris. The article, which is titled “Real Estate Counselor: Association Leaves Too Many Unanswered Questions in News Report on 300% Increase,” focuses on a recent report by Orlando’s CBS News 6 (www.clickorlando.com) on a brewing dispute at the city’s popular Baldwin Park community. It reads:

. . . Baldwin Park, which is located in the heart of Orlando, is a sprawling and extremely popular neighborhood filled with all manner of residential and commercial offerings. The station’s report paints a picture of unhappy residents with too many unanswered questions. Its reporter notes that the community’s property management refused to answer his questions, and predictably the result is an unbalanced news story that he vows to keep following at the community’s upcoming budget approval meeting.

The report starts with townhome owner Dennis James, who says he has lived in the community for 12 years but the latest proposed increase from the association gave him sticker shock. He shares documents showing how the monthly dues for his townhome category went from $424/month in 2022 to $758/month this year, and the proposed increase for 2024 is for $1,222/month. That would amount to nearly a 300 percent increase in just two years.

“I think the $1,200 a month is too much for what we get,” James tells the station. Apparently, some of his neighbors agree.

The reporter also found a sign that was posted on the community’s mailboxes.

“Another increase!!?? . . . Our townhome monthly fees would be higher than any other townhome in our area by $500 – $800 per month,” it reads.

We also learn that complaints about the increase are appearing on social media.

“Insanity. Baldwin Park is gorgeous, but this is not the Palisades of Beverly Hills,” reads one post.
James and his fellow owners of the same category of townhome have retained an attorney “to get the board of directors and Sentry Management to open the books,” the reporter states.

“There are certain legal principles that come into play and that govern the actions of the board of directors in relation to its responsibility to the owners,” says the attorney. “Certainly, there are options available, we believe, to the board of directors that would create better protection for long-term property values, but also would address this short-term cash deficiency that I believe the association is facing.”

The reporter concludes by noting that the president of the community’s property management company told News 6 by phone that the increases are due to the rising costs of insurance and everything else, but he declined an interview or to provide any further details. Given this lack of input from the association, the end result is a terrible news report for Baldwin Park.

That was an unfortunate decision for the association, presuming that it has nothing to hide and the proposed increase is necessary to cover legitimate expenses. However, it appears that its board of directors will get another chance to tell its side of the story, as the reporter vows to cover the upcoming budget adoption meeting.

Community associations and their property managers must understand that any such extreme budget increases may appear to be completely exorbitant unless they are accompanied by transparent and comprehensive documentation and communication. For communities as large Baldwin with substantial annual budgets in the millions of dollars, the best approach would be to implement and utilize a budget/finance committee.

The committee should hold meetings that are open to all the owners throughout the year, and it should develop annual budgets and submit them to the treasurer and other board members for consideration. Its work and negotiations with vendors should help to provide full disclosure and transparency for all the unit owners, who should also receive regular communications about anticipated cost increases.

Based on this news report, it appears that the association has not done enough to answer owners’ questions, just as its property manager failed to answer the reporter’s questions. To turn the tide, the association should start by providing its side of the story to the journalist either via a written statement or a taped interview with its attorney or property manager. It should also commit to scheduling and holding discussions and documentary disclosures over such budgetary increases at all the necessary board meetings that it takes to address owners’ concerns. . .

Evonne concludes her column by noting that the association should take these actions with the understanding that owners have a right to know how the funds are being budgeted and spent. She counsels that the best way to keep owners advised is through transparent communications. By doing so, she notes that Baldwin Park and other Florida communities can help to avoid such unanswered questions from their owners leading to such negative news reports.

Our firm salutes Evonne for sharing her insights into the takeaways for community associations from this recent TV news report with the readers of the Miami Herald. Click here to read the complete article on the newspaper’s website.