From Joey Stefko Sep 12th, 2:52pm THIS IS QUITE LONG BUT, I THINK ALL SHOULD TAKE THE TIME TO READ IT: The following is my analysis of the Settlement Agreement of September 5, 2014 presented by A.J. Stanton. This is an effort to resolve our 17 year court battle between the Park Owners and NEHA. I will address each item as listed in the Settlement proposal: (a) The Settlement Proposal (aka SP) states that the HOA (aka Naples Estates Home Owners Association) “trial court has awarded the HOA the right to buy the park under the terms and conditions that are disputed by the HOA.” Analysis: Other then our Appeal for the sale price from $14M to $11M the matter is settled on our part. This dollar amount was determined by the same court that ruled we are entitled to purchase the Park. I suggested some time ago that the issue is to buy the park and we should bite the bullet on the $14M and move on to purchase. My opinion was the delay in the Appeal process was not worth the delay in completing the sale. Item (a) continues, “prevailing in the case does not insure that the Park will be Purchased.” A strange statement in itself for a law firm that spent 17 plus years on a case that reached their clients objective. Court order sale and now we throw in the towel? Continuing..”Park Owner has indicated that he will do whatever is possible to stop this from happening….there is a host of options your Park Owner could take to interfere, delay, or prevent the closing from ever occurring.” Again, a strange statement for a law firm that won the case. We were and are aware of the Park Owners delay tactics. We won the case, we should drop our appeal on the price as concession and close the deal. (b) Case No. 00-981 (2000 Rent Case) I must confess I know nothing about this case other then money was collected for improvements that were not done. I would appreciate any input on this matter. (c) Case No. 07-4646 (2007 Rent Case) “The Park Owner {filed law suit} against the HOA in its capacity as class representative of the residents in the Park seeking recovery of a 46% increase in monthly rents.” Valuable information has been left out in the summation of 07-4646. I will present my opinion, understanding and summation of this case. It is my understanding that in order to get back at NEHA the park owner raised the rent by 46% in May of 2007. Initially it was raise 56% then modified to 46%. The rollover lease in place provides for an annually cost of living increase or 6% whichever is greater. Ask yourself the question, why didn’t the Park owner just evict the tenants if they didn’t pay the full rent after May of 2007. Why didnt he go to the court and ask the court to enforce the new rent schedule or evict, why indeed? Could it be if he forced eviction he would have lost, he was getting his rent increase from the majority of the tenants, a half a loaf is better then nothing. Why did our attorney recommend pay a 6% increase and why more important did Karno accept it from some and not others? It is my understanding that thePark Owner maintained the lot rental increase was calculated on Market Rent Rate. It is also my understanding that this data was never supplied to the NEHA and the rental increase was really punitive due to the law suit to Purchase the Park. The Board was informed by counsel to have members pay only the six (6%) percent and withhold any additional monies. Question, again why did Attorney Colling in a letter recommend only pay a six (6%) percent increase? Where did Attorney Colling get the 6% number from. His recommendation has caused the hardship on the clients now suffering under the threat of eviction. People would have budgeted for the rental increase but now it has become a great burden with the lump sum due. See bullet point 2 in my Conclusion/Opinion at the end of this letter. The market rent increase is not in the lease, however there is confusing language that says rents may be raised to Market Rates written in the Prospectus. The term in the lease (page 3d) “notwithstanding first term” is used to bring the Market Rate in the back door. I don’t know anyone who has been given the Prospectus along with the lease. Without the Prospectus you have no way of knowing about Market Rent. The Park must approve all transfer. One must assume that they are the experts in the operation of the park and have the duty to make sure the new buyer has a copy of the Prospectus as it is obviously different from the lease. In addition It is unreasonable to expect a tenant to know about the market rent clause when it is not part of the lease—— but hidden in a portion of the Prospectus and not known to the lessee by providing a Prospectus or an addendum to the lease on that issue. Additionally, this case was side-lined; why? If this case was done in a timely manner this would have been over a long time ago and not such an ongoing burden. It is my opinion there was a failure on Counsel and NEHA Board not to recognize this. This case should be opened immediately and not fought by another lawyer on parties being evicted. This should have happened a long time ago. Why is Karno going the eviction route now when he may open the 07’ case. Among other issues The Park Owner failure to provide a Prospectus along with the lease. It is my understanding that Market Rent documentation justification was never presented to the Board and it appears the Board never challenged that issue with their own data. Many accepted attorney Colling advise and many didn’t. Again, why did Colling recommend 6% and why didn’t Park Owner file the same eviction notice in 07’ that he is filing now? The purchase and the rental increase were two different cases and Attorney Colling knew this case would be of a much short duration then the purchase case. It was, at the time more important then the purchase case. The purchase case should have been side-lined and the rental case should have had priority or they should have done both at the same time. I am sure they handle more the one case at a time. “You park owner has stated that if the settlement is not successful, he intends to pursue the evictions to conclusion. if this happens, the source of revenue necessary to operate the park will be greatly diminished which could have an adverse impact on the ability to close on a loan to buy the park.” O.K., he is successful he takes control of the lots and we buy the park. Guess what, he has to buy the shares for each lot or lose them to the co-op. Remember, the Association will own the property, he will be the tenant. If he elects to walk away we have prime lots to lease or sell a share to a new owner that may be willing to put a new unit on the lot. I would even consider this for my lot. The reason being, for all practical purposes I would own the lot (my share would be tied to the lot) and I would not be subject to the a Park owner who wants to make my life miserable,price gouge and force me to sell. Why the scare tactic? Why didn’t our counsel point this out? Counsel chose to present an specious argument. I will discuss this further when I get to item 3. (d)Case No. 13-CA-847 (resident Case 1) “The action has been extremely burdensome on the Board and its attorneys and interfered greatly with the ability to efficiently pursue the litigation relating to the park purchase and 2007 rent case. I must admit I did not research this case yet, I will need to get back to all on this. Any information that may be provided would be helpful. (e)Case No. 13-CA285 (resident Case 2) “The action has been extremely burdensome on the Board and its attorneys and interfered greatly with the ability to efficiently pursue the litigation relating to the park purchase and 2007 rent case. Again, I must admit I did not research this case yet, I will need to get back to all on this. Any information that may be provided would be helpful. COMMENTS in the Settlement Letter: “However, many of the tensions have been caused by ill-informed residents who have chosen to voice opinions in a less than constructive manner that has only served to hurt and divide the interests of the community as a whole.” There is a lot of truth in the statement but could it be because the lack of information conveyed from the Board to the Members? This cuts both ways. “The Board has chosen to put the future of the litigation, including the rent dispute, the eviction of your neighbors and the quest to purchase the park in your hands.” I find the term “quest to purchase the park in your hands” a bit unsettling. I think that is a shift in the Attorney, Client relationship. Up until this point in time it has been obvious to me that the Board went along with the attorney’s, now the attorney’s and the Board are looking for guidance from the members. Is this an attempt to shift the decision and repercussions away from the Board and Stanton & Gasdick and place it on the members? Why didn’t we get a vote a few months back when we were set to purchase the park? Additionally, can you tell what AJ is recommending. That would be nice to know or do you get it from the Settlement Letter or is he claiming he is the messaged and can not be blamed for the message. “the Board has spent countless hours negotiating the best settlement terms it was able to reach with the park owner and is presenting it to you to vote on.” Again, I find this comment to be boarding ridicules. What was gained by the majority of the members in this settlement proposal? Look at what follows. ITEM 1 GLOBAL SETTLEMENT: That’s right let all the failures and promises disappear. Kind of like the governments QE and no one pays or goes to jail. Sleep well my children. ITEM 2 2000 RENT DISPUT: What’s the hurry, it’s on been 14 years and Karno gets his money and he does nothing he promise and we pay. Such a Deal!!! ITEM 3 2007 RENT DISPUTE: This is one of my favorites. (a)Action dismissed with both parties bearing own legal fees and costs: So what are the legal cost to NEHA? Why didn’t the people pay the rent increase? I’ll tell you why, attorney Colling recommended to pay only 6%. Why did he recommend that? (b)Rents set at $575/mo back to 2007 increase plus water added. Yes a small cookie for some, not all. Isn’t that nice. (c)Agee to annual increase of CPI+1% with an annual floor of 3% and a ceiling of 6% for 3 years from the effective date of the settlement agreement. ALL INCREASES THEREAFTER SHALL BE ACCORDING TO MARKET RENT AT THE PARK. This is the death nail. A great deal for Karno!!! They give you a cookie in (b) but in a short time they double down to destroy the park three (3) years down the road. You notice they slide Market Rent (at the park) in the deal. If it is in the current lease they don’t need that stipulation. Guess what, it’s not there so they want it in. We know what happens with market rent, try 46% in one year. They include rents in our park, what does that mean? That means if they get some new-bees coming-in that will pay $1000 then that’s the new market rent. Even if it is general market rent NEHA needs to spend money reviewing his data. But wait, he didn’t provide data last time. Since no one read the Prospectus here is what it says about Market Rent! “or by new residents of the park.” DO YOU GET IT YET. Sorry it took so long to get to the point. (d) All claims for rent not paid prior to 2007 are dropped Nothing here for most of us. (e) All rents paid into court registry by those depositing rent shall be turned over to park owner That’s a beauty, he get the money that was not due him because he did not comply with the rollover lease limits. He wins again. (f)Terms for those he claims owe but did not pay. This is a beauty, he is giving those a cookie for a short term relief. You can make payments for four months before he forces you to sell a property that there will be no market for other then Karno. When this is over it will be a development and your only alternative will be to abandon your unit or pay to have your unit moved. You may even get a demo bill. He wins again. May I remind you about the definition of “market rent.” (g) POST 2007 Post means after 2007, your on your own after settlement but yet we vote on it. This seems kind of strange that post 2007 are treated differently. He really owes back rent to those post 2007. When members purchased after 2007 they assumed a rollover lease that should have prevented the increase of 46%. Rents cannot be different for different people in the Park, it’s in the law! (see conclusion bullet point 2) He caused great harm to those that had to sell cheap because of the over charge in rent making there place much less desirable. ITEM 4 AGREED IMPROVEMENTS. How does this get enforced and if he does it how much cost will passed on to the members. These improvements if ever done will add value to the park and raise the market rents shortly after they are done. Remember, if he gives you something rest assure he will get double back, his record speaks for itself. ITEM 5 HOA Board Resignation and Elections: Yes, great idea then he can really stack the Board. ITEM 6 ATTORNEYS FEES: PARK OWNER WILL NOT PAY ANY LEGAL FEES. “Fees outstanding to Lee J. Colling & Assoc. are being negotiated.” This is a good one. Karno must pay our attorney fees if we complete the sale but if we don’t he doesn’t, we pay. “Fees outstanding to Lee J. Colling & Asoc. are being negotiated.” This is probably the most disturbing point in the settlement letter. We won the case and Karno must pay our lawyers. This could very well be in the millions as the court awarded attorney fees. What is wrong with this picture? Has anyone seen our fee agreement with Colling & Assoc.? Why would they walk from a million dollar payday? What do they mean they are negotiating outstanding fees? What fees when we were awarded attorney fees? There is something very wrong with this! They have 17+ years in this and they are going to walk away with pocket change. I don’t understand. Then again maybe I do understand. CONCLUSION AND OPINION: Being involved in this Odyssey for 3 years and after reviewing this so called settlement agreement proposal It is my opinion am recommending to the members, the Board and our Law Firm: First of all Finish what they started; the stated goal 17 years ago, compete the Purchase! Secondly, open the 2007 case again, this case is as important as the Purchase Case. Colling said 6%, I think are lawyers should make a case based on that recommendation, period. Try looking at it from what I suggested in the letter. Additionally, Flordia Statute 731.031(5); “An increase in lot rental amount shall not be arbitrary or discriminatory between similarly situated tenants in the park.” There are those paying substantially less then what I and fellow residents pay and that is not permitted by Floridian Statute. If you win this case the game is over! Vote to purchase and continue the battle if that is what it takes. Most similar Parks that are run as a co-op of land ownership have much lower lot fees. I have checked and they are in the $100-$150/month. If you can not buy your share it will be financed with a lot payment added to your lot fee for approximately $200/mo. making your total payment max out at $400/mo. with no market rent annually adjustment. This is not rocket science, it is numbers. Do the math. If you vote not to buy you will be gone in 3-5 years with a possibility of a demo charge to boot. As the saying goes, wake up and smell the coffee. I welcome support in my efforts to get to the bottom of this with the ultimate goal of purchasing the park and a refund of overpayment in rents. If I have error in my analysis/opinion or my facts above I come being corrected. Thank you for your time. Joey Stefko
Posted on: Fri, 12 Sep 2014 23:51:40 +0000
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