GIVE ALL OWNERS ALL THE FACTS

This post was written by Charles Lea and has been posted on the Hawks Nest website. For those of you who have not been able to secure access to the Hawks Nest website, here it is in full:

The recent letter sent out as the President’s Letter does not provide adequate information for owners to make the major decisions called for in the letter. The letter is incorrect, confusing , ambiguous and misleading.

1. The President states that no meeting is required, when quite the contrary the Declaration of Condominium (DoC) requires that a meeting must be held (See section XIV B 6 (c)) which states – after receiving reliable and detailed estimates (more than one), as well as the expected amount of insurance proceeds, THE BOARD SHALL CALL A MEMBERSHIP MEETING. At such a meeting the owners will have a right to ask questions and discuss the information among themselves PRIOR to any consideration of a vote on decisions of this magnitude. Don’t the owners have a right to ask questions and seek other data/options?

2. The owners need detailed and reliable estimates (plural, more than one) as required in the DoC – not an estimate that the Board has had “whiteout” put on it so that owners don’t know who it is from nor when it was issued. Provide all the REQUIRED information PLEASE. The estimate from Keystar was issued a year ago. Has anyone asked them to provide more details? As I recall, there was another estimate provided by ACG in the range of $6,500,000. And in 2018 the President stated that he had obtained estimates approximating $4,000,000 and that the owners might expect to receive some reimbursement. Willthe Board please provide all four of these estimates, with reliable and detailed information? Will the Board also please provide the reliable and detailed estimates totaling $1,559,700 for other items than the building?

3. Did the Board obtain any estimates to demolish the current building and REPLACE it with a NEW building. It seems inconceivable to me that it would be wise to invest approximately $10,000,000 into a building that is 40+ years old. Has the Board contacted an architect to draw some basic, varied scenarios that would meet Monroe County legal requirements (no more than 3 stories, to new code, minimum setbacks, etc.). One owner has suggested a crescent shaped building that would stretch oceanfront from property line to property line, three stories high (would accommodate current 28 unit requirement) with the other facilities realigned as well. Some argue that it would take a couple of years to build a new building. I suggest to repair the building would take longer. Which is better from an investment perspective if timing is the same?.

4. The DoC DOES NOT require the owners to make a vote NOW as the President implies. Ir simply states that a meeting be held to discuss information to help them form a decision. Asking owners to vote on the current limited and incorrect information isn’t fair to the owners. The owners shouldn’t be required to vote until all facts are provided. If an owner votes for a Special Assessment, it does not mean that they are required to pay such assessment. Likewise, if an owner ultimately votes against a Special Assessment, it does not mean that they cannot pay the assessment and retain their rights. The vote is to make a Special Assessment, not to require payment. When the vote is called, if a majority (50% +1) of all votes (1393 votes) are cast in favor of a Special Assessment, such assessment shall be made, per DoC. If an owner does not pay said Special Assessment, per DoC section X111 (page D7 – D8), the Board shall have the right to enforce said assessment, if unpaid, up to and including foreclosure on that unit. It simply is not correct to say that if 49% do not approve a Special Assessment that the others would have to pay $12,000. If, for example, all those that voted “no’ had their units foreclosed then the Hawks Nest would own about 700 prime units of Keys timeshare units. How much could these be sold for? $10,000 each would produce $7,000,000 for the Association. All of these avenues should be put out as possible scenarios for the owners and FULL information/options provided. It just is not as simple as the President implies!

5. As to the additional lawsuit, it was filed 4/13/21 and totals approximately $3,000,000. Given the magnitude of this lawsuit, would the Board inquire of our attorneys to seek their best expectation of the timing and expected outcome of this lawsuit, This lawsuit was FILED AS A PART OF THE ORIGINAL CASE – same case number, same Judge who is knowledgable of the case, etc.). We would NOT be starting all over again. For details on this lawsuit, follow the link on Gary Rumberger’s 5/1/21 Hurricane Update and click on the Doc dated 4/13/21. This amount of money makes a huge difference in any proposed special assessment. We have waited three and a half years, what’s a little while longer to decrease any Special Assessment by $3,000,000?

6. The President’s letter states the payout to owners, if the Hawks Nest is terminated, would be in the amount of $3,200/wk and this would “increase depending upon the sales price of the land”. Has the Board obtained reliable appraisals of the value of the land? I have heard a number of $3,000,000 being thrown around which I personally believe is far too low. Again, do we have appraisals of the bare land? If so, please provide them. I have also heard that due to the prohibition on development in the Keys that each current unit carries Certificate of Occupancy which is transferable to any future buyer and that the value of said COO would approximate $100,000 per unit, thus another $2,900,000. If correct, this could increase the payout to owners from $3,200 to $6,500 per unit week. These are not small amounts and the owners again need to know what can really be expected.

In recap, we seem to have other options rather than just simply Repair or Terminate now. The Board should first provide detailed estimates and other information as noted above. Once this detailed information is provided, the Board should call a meeting for all owners to discuss the data. We should not vote until we meet and until all owners have had an opportunity to have all their issues and questions addressed. We should consider building a new building and consider how additional fundings noted above would help pay for this new building rather than the President’s simple “vote for or against a Special Assessment to repair a 40+ year old building”. In my opinion, THE OWNERS DESERVE BETTER.

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