Jul. 6, 2021

After Collapse, Condo Association Lawyers Field Frantic Calls — But Long-Term Change Is Unlikely, They Say

South Florida condo lawyers said they've fielded plenty of client calls about the safety of their high-rises in the days following the Champlain Towers collapse. The attorneys say their advice on building inspections and dealing with unit owners can prevent catastrophes, although unit owners may not see value in expensive special assessments or legal fees.

Ever since Champlain Towers South collapsed in the middle of the night last Thursday, killing at least 12 with another 149 people still unaccounted for as of Wednesday morning, condominium association lawyers have been fielding questions from associations about their buildings.

David Haber, a board-certified condominium attorney based in Wynwood, said his phone has been ringing from current and prospective clients who want to negotiate contracts for repairs, review the status of ongoing repairs or remediation, and communicate the board’s taken or planned actions to analyze its building in the wake of the collapse in Surfside. 

“Every building owner is going to bed tonight and has been every night since Thursday saying, ‘Is my building safe?’ “ Haber said in an interview.

In the days following the collapse, the town of Surfside surfaced a 2018 engineering report that found major structural damage to the tower. At the time, the total estimate for those and other repairs exceeded $9 million.

In June 2020, the condo association again engaged with Morabito Consultants, the engineering firm that completed the initial assessment, to prepare the 1981 building’s 40-year restoration plan “with detailed specifications for completing the necessary repairs and restoration work,” the firm said in a statement on Tuesday.

And by April 2021, as the condo association worked to secure funding via bank loans and a special assessment imposed on residents for the repair process ahead of the building’s upcoming 40-year review, the scope of the work contained in that original report had expanded. The repair cost estimate rose to nearly $15 million, according to an April 9 letter addressed to residents from the condo association board president. The letter was first obtained by USA Today.

Like Haber, real estate and condominium lawyer Michael Gelfand said he’s also been hearing from clients since the collapse. On Monday, the West Palm Beach lawyer had two people approach him to ask if their South Florida condominiums were safe.

His advice to them was two-fold: First, check the turnover inspection report and see if the building followed its instructions on required maintenance. Owners of units in older high-rises should check on the status of follow-up inspections. Second, owners can prepare for an expensive special assessment by raising their assessments now. 

However, despite the recent flurry of “hurry up and wait calls,” Gelfand said he expects that little will be done, emphasizing that many residents won’t be able to afford the repairs, and many who can afford them won’t want to pay.

“As much as the board of directors wants to approach these matters, owners will not want to pay. I anticipate that probably 10% of those oceanfront buildings will reserve for concrete and structural work,” Gelfand said. “But even those buildings are still governed by twin philosophies: unit owners believing they can manage their money better, and owners feeling like, ‘I’m not going to be here in five years, why should I put reserves in?’”

But for Miami Beach real estate attorney Oren Cytrynbaum, the aftermath of the collapse is personal. Earlier this year he bought unit 905 at Champlain Towers South, the one next to his dad’s. He had recently mailed an $80,000 special assessment to the condo association before the collapse.

“I’ve gotten close to people in the community,” said Cytrynbaum, who was staying elsewhere the night of the collapse. “We literally just paid for a special assessment, which included the 40-year certification. It was all due by June 30.”

 

The Lawyers’ Role in Safety Advocacy 

Condo lawyers can’t force their associations to do anything, Haber said, but they can emphasize the stakes.

“I’ve written letters to [boards] and [management companies],” he said. “In those letters, I’ve pointed out the fiduciary duty of the board with respect to life safety issues and their responsibility to take care of those items.”

Such letters aren’t always received well.

“I’ve had situations where having written those letters, board members threatened to fire my law firm because I placed them in a position where they have to do this work, and they wanted to slow-play it,” Haber said.

Matthew Zifrony, a condominium and HOA attorney at Tripp Scott, said he advises condo associations to get an engineering assessment before getting a bid from a concrete restoration company to ensure the proper repairs are made.

“In my opinion, the only way to start is with an engineer that does an inspection, comes up with the scope of work, and then you tailor the contract to fix the problems the engineer pointed out rather than going into a contract with a restoration company where you’re not sure if they’re addressing enough or more than they should be,” Zifrony said.

Condo boards may recognize the value of high-quality counsel, Gelfand said, especially because they may not be trained on issues such as hiring an engineer.

However, Gelfand said he doesn’t expect a long-term change in the way condo associations engage with their attorneys.

“In the long run, I do not perceive a change in the relationship between condominium associations and their GCs,” he said. “The reason is that after all is done, just like after hurricanes and other catastrophes, the bottom line is going to continue to drive decision-making. Despite the desires of the board of directors, the unit owners would rather their funds be paid on landscaping than the lawyer.”

 

Lawyer Liability

Despite highlighting serious structural issues, the report didn’t state that a collapse was imminent—something the association’s attorneys at Becker & Poliakoff highlighted in a series of media interviews following the collapse.

“The sense of urgency is directly tied to the wording used and the consequences outlined in the report,” Becker lawyer Donna DiMaggio Berger told the Times on Sunday. “All boards can do is rely on the advice of the professional advisers that they engaged.” Neither Berger nor colleague Kenneth Direktor mentioned that the concrete damage had gotten significantly worse since the 2018 inspection, as Wodnicki’s April letter to residents stated.

Gelfand noted, however, that engineering reports seldom contain language that would “cause you to jump out of your chair and call the authorities.”

While the details of the events leading up to the collapse are still being reviewed, Haber said Becker & Poliakoff’s role is likely to be examined as well.

“Any time there is a tragedy, there is always an inclination to sue anybody and everybody that could be responsible, that’s the system of justice in our country,” Haber said.

Zifrony noted a condo association attorney’s liability in a collapse would likely depend on whether the attorney knew about the severity of the problem.

“If the problem is identified and an attorney is asked to provide legal counsel as to how to prevent a catastrophe from happening — like anything asked of an attorney, if the wrong advice is given, the responsibility perhaps is out there,” Zifrony said. “But in general, if an attorney is not asked to get involved in something and has no way of knowing of a potential problem out there, then I don’t believe that attorney should be responsible if a problem shows itself.” 

Becker & Poliakoff declined to comment for this story.

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