ARE CONDO OWNERS GETTING DUPED BY "THE OTHER BOARD"?

SUBMITTED BY: KEITH GOLDSTEIN
Contributing Writer, Conquistador Condominiums

Recently I was asked by a new Conquistador homeowner what the $27.50 monthly fee payable to the St. Augustine Shores Service Corporation included. I have actually been asked this same question previously but haven't given it a lot of thought. My general answer was, and always has been, "The fees go towards paying management staff, general maintenance of the swales, parks, lights, pier and the grounds".

A couple days after this question was raised I decided to do some research. I had realized, like so many others, that I really was not sure exactly where my $27.50 went each month. I have a general understanding of The Conquistador budget process but knew nothing of the Service Corp. Shame on me! What I was soon to learn was astonishing and I felt needed to be shared.

What I was soon to learn is that there is no simple answer to this question. Here is a list of expenses that was handed to me recently by a member of the Service Corp. Board.

MONTHLY MAINTENANCE FEES

"Many people in the Shores do not understand what their $27.50 monthly maintenance fee covers. In order to end the confusion, please refer to the following list of expenses;"

• FPL streetlights
• Mowing of swales & common areas
• Landscaping of center islands, entrances and lakes
• Maintenance of tennis courts, bike & walking paths
• Fertilizer & Mulch
• Trimming & tree removal
• Pest control
• Irrigation supplies
• Maintenance of Truck
• Lake Management
• Maintenance of Pier
• Storm damage resources
• Office Staff
• Office Expense & CPA fees
• Coupon books & postage
• Annual Meeting packets & postage
• Insurance
• ATT phone service
• Administrative costs for liens filed
• Legal expenses
• Sign maintenance
• Varmint Control
• Maintenance of Playground

Once I received this document I proceeded to review the year end financial statements that we all received in early July of 2008. Missing from the above document were 2 very large expenses; "The Riverview Club Facilities and the adjacent Pool. After further review it became apparent that these items were included as line items within the operating budget but rarely discussed as such. The reason became quite apparent.

You, the homeowner are not allowed the use of these facilities!Let me further explain. In order for you, the homeowner, to utilize these facilities another fee is required. (bringing your total to three (3) fees) Yes, that is correct. In order to use these facilities you must pay the following;

1. Your Condo Association Fee
2. Your Shores Service Corp. Fee
3. Obtain a Pool or Recreation and Social Club membership.

This would almost be comical if it weren't all true. Once I inquired as to the principles behind this methodology, the cooperation with the Service Corporation ceased. Their opinion appears to be "Just shut up and pay the fees". Although this has never been stated it has been implied. As the good community advocate that I am, my research had only begun. "What were they hiding?"

The next thing that I did, as would any budget minded individual,was sit in a quiet room with the Service Corp. end of the year financial statements, paper, pencil and calculator, and go to work. After careful review, checking and rechecking, I was able to determine the following;

1. The Riverview Club annual operating expenses were $218,641.47. These numbers are inclusive of the Riverview Club building and the adjacent pool.

• The total income generated was $105,273.03
• The Operating Deficit was $113,368.44 (51.85%)
• The Operating Deficit is paid through "SHORES SERVICE CORP ASSOCIATION FEES"
• Each Homeowner contributes $34.20 per year toward these facilities
• Our Shores Association Fees are funding over 50% of the operating expenses for a facility that would require us paying additional fees to use!!

And, it does not end there. My next step was to peruse through that large stack of papers that we all, as homeowners, received at closing. Many may have just tucked them away in a drawer or closet. I was determined to find language in the governing documents related to any fees funding these facilities. There was nothing!! There was absolutely no language related to association fees funding these facilities. However, I was able to determine the following;

1. The Shores Property is comprised of 8 different units
2. Each Unit has its own Declaration of Restrictions
3. Our Condominium Association (The Conquistador's) resides in Unit 6 (see map below)
4. Each Unit has its own association fee structure
5. Unit 6 fees are not to exceed $20.00 per month!

Wow, where did the extra $7.50 charge originate and why are we paying for the Riverview Club facilities? Below you will find excerpts of the Declaration of Restrictions as they relate to Unit 6;
(See Shores Map for other Units)

Declaration of Restrictions (excerpts) Unit 6

11.03 The initial monthly fee to be paid to the Service Corporation for maintenance and upkeep as is further described herein upon each and every of said lots, tracts and living units subject thereto, whether vacant or occupied, shall be $10.00 commencing January 1, 1981. Said fees shall be due and payable in advance on or before the first day of each and every month for the next succeeding month commencing with the month following the date of deeding of a lot, tract or living unit from subdivider to a purchaser. Initial fees for a partial month may be collected in advance on a prorated basis. The Service Corporation may, but shall not be required to, provide for a reasonable rate of interest to accrue on any of said overdue installments and may change the rate of interest from time to time. Said rate of interest, however, may not exceed the prevailing mortgage rate allowed by the Federal Housing Administration (FHA) from time to time.

The Service Corporation may increase said fees from time to time as is hereinafter provided. Said fees may be increased or decreased by the Service Corporation except that the said monthly charge or fee per lot, tract or living unit shall not be raised more than twenty-five (25) percent of the then existing fee during any one calendar year. Said fees may not be raised to a sum more than double the initial fees without the joint consent of the owners of record of not less than 51%, in number, of all the owners subject thereto who actually vote for or against said increase including the owners of those lots, tracts or living units covered by other restrictions containing similar provisions affecting other lots, tracts or living units covered by other restrictions containing similar provisions affecting other lots, tracts or living units shown on plats of real property of St. Augustine Shores Subdivision whether recorded now or in the future, and if said fees are decreased or extinguished by the Service Corporation may be decreased or extinguished so that the Service Corporation shall not be required to pay more for the services hereinafter enumerated than is collected by said fees. In regard to said joint consent, the owner of each lot, tract and living unit shall not be entitled to more than one vote.

11.13 The Service Corporation shall apply the proceeds received from such fees towards the payment of the cost of any of the following matters and things in any part of St. Augustine Shores subdivision, whether within the unit partially or fully restricted by these restrictions or within units partially or fully restricted by other restrictions recorded or intended to be recorded or recorded in the future in the Public Records of St. Johns County, Florida affecting properties located in St. Augustine Shores Subdivision, namely:

(A)Improving or maintaining such street, swales, parks and other open spaces, including all grass plots and other planted areas within the line of right-of-way, which areas exist for the general use of all the lot owners in St. Augustine Shores Subdivision or for the general public, whether or not a reservation for the public is dedicated or recorded and whether or not said areas are dedicated rights-of-way now existing or hereafter created, and whether or not they shall be maintained for public use or for the general use of the owners of lots or parcels within said Subdivision and their successors in interest, insofar as such are not adequately provided by governmental authority. Such maintenance may include, but shall not be limited to, the cutting of grass, plantings, bushes, hedges and removing of grass and weeds there from and all other things necessary and desirable in order to keep the Subdivision and the streets and public areas contiguous thereto neat, attractive, and in good order.

(B)The cleaning and lighting of streets, walkways, pathways and public areas within or bordering upon the Subdivision, collecting and disposing of rubbish and litter therefrom but only until such time as such are adequately provided for by governmental authority.

(C)Taxes and assessments, if any, which may be levied upon any of the properties described in Paragraph 11.13 (A) through (D) and due and payable by the Subdivider or the Service Corporation.

(D)The Service Corporation shall have the right, from time to time, to expend said proceeds for other purposes, not inconsistent herewith, for the health, safety, welfare, aesthetics or better enjoyment of the community.

So let us take a look at what we have learned:

We are paying $2.85 per month ($34.20 per year) for a pool and clubhouse that we can't use.

We have been overcharged $7.50 per month on our association fees.

When I was a young child I can remember my Dad stating on a regular basis,

"If You Watch Your Pennies"
"Your Dollars Will Take Care Of Themselves!"

This simple phrase becomes so meaningful as we look at the state of our economy and the position that some of our friends, families and neighbors find themselves in. If this issue does not concern you personally, remember, it could affect a neighbor. To a senior on a fixed income or a couple who may have lost a job this $10.35 a month could be the difference between a few hot meals or not!

I ask that in the spirit of giving that you contact the Service Corporation office and ask the following questions;

1. Why are we funding these facilities with no benefit?

2. How can you justify the extra $7.50 per month that I am being charged?

The answers to these questions may amaze you. Here is the contact information;

Joe Smith, General Manager

St. Augustine Shores Service Corporation
790 Christina Drive
St. Augustine, FL 32086
(904) 797-6441
joe@staugshores.net

UNIT 6 MAP