Problems smolder on from blaze at condos

7/17/2003

Three years after fire destroyed an apartment building at Lucas County's second-largest condominium complex, damage has been repaired but fallout remains.

Property insurance premiums have soared nearly sixfold at Hidden Cedars in Springfield Township and a court-appointed receiver collects monthly maintenance fees from feuding owners.

“It has been very difficult,” said Anne Johnson, former president of the condominium association who lost her home in the blaze and has since been named in a lawsuit instigated by two other owners. Plaintiffs include a partnership that owns 30 of the complex's 166 units.

The lawsuit in Lucas County Common Pleas Court contends that Ms. Johnson and another officer failed to buy adequate insurance coverage and made decisions without proper consultation at a time when the condominium association's board had vacancies.

Ms. Johnson denied the contention and said she acted in the best interest of condominium owners. The real problem, she said, is the large number of rental units owned by investment groups more interested in profit than the welfare of the community.

She and her allies have clashed with Herbie Howard, a Toledo area real estate investor who succeeded Mrs. Johnson as president of the condominium association. Mr. Howard, who also was involved in bringing the lawsuit, has since resigned but remains a member of the condominium board, according to John Potts, an association attorney. Mr. Potts disagreed with Ms. Johnson's characterization of the dispute.

The underlying problem, said receiver Ralph DeNune, is that Hidden Cedars is a 30-year-old former apartment complex with growing maintenance needs that until recently didn't charge owners enough to meet expenses.

The problem turned into a crisis after the fire, when the complex collected $2.1 million in fire insurance proceeds but then was faced with a nearly 600 percent premium increase.

Insurance costs went from $14,000 in 2000 to nearly $90,000 now, he said.

After becoming receiver in early 2002, the Toledo attorney oversaw a steep increases in monthly maintenance fees at the complex at 6201 Garden Rd. At the time, the association owed $205,000, most of it in unpaid construction bills related to the fire. Fees for the smallest units went from $72 to $132 a month. But those for many larger units rose to $237, with the largest paying $273.

Owners, whose units are worth an estimated $25,000 to $75,000, were not happy. But hold-outs eventually began paying up. Most bills have since been paid, according to the receiver.

A reduction in monthly fees may be possible later, he added.

But there has been no end to the acrimony among condominium owners. A meeting to elect a new board of directors for Concordia Condominium Association - which uses the project's former name - was held last summer under a judge's supervision in a Lucas County courtroom.

The investment partnership that filed the suit against the two officers who oversaw the complex at the time of the July, 2000, fire has tried unsuccessfully to convince a judge to remove the receiver.

The lawsuit, which was taken over by the condominium association after Mr. Howard became president, is scheduled for trial in October. It seeks to recover from liability policies covering the two named former officers about $175,000 in fire-damage expenses not covered by insurance.