The Club at Brickell Bay Association Not Paying Its Bills?
November 7, 2007 by Lucas Lechuga
Primecast is a cable TV and Internet service company that provides these services to all residents of The Club at Brickell Bay as a part of their association fees. The following letter was delivered last week to all residents living at The Club at Brickell Bay:
IMPORTANT - PLEASE READ
October 31, 2007
Dear Unit Owner,
We appreciate your patronage and want to extend our thanks for being a customer. As you may know, Primecast and The Club at Brickell Bay Master Association have an agreement in which Primecast is to deliver video and Internet service at a discounted price to all members of the Association. Unfortunately, the Association has not performed according to the terms of that agreement, including payment for these services, despite repeated notices from Primecast. As a result, the basic video and Internet services currently being provided to all units under the agreement with the Association will be suspended, effective Tuesday, November 6, 2007.
We apologize for any inconvenience. Please contact your Property Manager with any questions regarding this suspension or call 1-866-xxx-xxxx begin_of_the_skype_highlighting 1-866-xxx-xxxx end_of_the_skype_highlighting to speak with a Primecast customer support staff member.
Sincerely,
Primecast Collections Department
Three words came to mind after I read the letter: "That would suck!". This not only affects condo owners but also tenants who signed leases under the pretense that they would receive basic cable TV and high-speed Internet services as a part of their monthly rent. You can be certain that rental prices on future leases will readjust themselves downwards within the next couple of months.
It is no secret that The Club at Brickell Bay has a very high number of condos that have gone into foreclosure and are now bank-owned. There are also a significant number of condos that are in preforeclosure that will probably share a similar fate in the months to come. The Association is likely having difficulty meeting its monthly expenditures as a result of the lost revenue from these foreclosed units. How severe is the problem? Is a special assessment or an increase in monthly maintenance fees right around the corner at The Club at Brickell Bay?
This is controlled by the condo association, not the developer. Developer is long gone.
This is what often happens when you have a high number of foreclosures. If say 30 units are in foreclosure, that means 30 units not paying their association fees as well. That means they have to dip into reserves to make up the difference, or everyone in the building has to pay more.
There is no gov’t entity to protect a building that does not pay its bills because the homeowners have a short budget.
Any resident has the ability and right to contact a government entity in Tallahasee which protects condos such as this. There are certain obligations the developer and condo board needs to comply with. They cannot cut services that interfere with basic services and thus the value of the condo.
Reuters published a story today regarding this building and the rampant mortgage fraud affecting it. A broker was quoted as saying that nearly 70% of the closings in the past 18 months are questionable, which is about 200 units.
This project is a disaster. I have sympathy for the legitimate, primary home owners who bought there.
The foreclosure rate is definitely the kicker here.
Another possible explanation could be that the Association repudiated the contract. Two weeks ago (more or less) the FCC adopted a rule that not only prohibited condo/apartment buildings from “locking” in cable/telephone deals with a single provider but the rule also renders existing contracts unenforceable.
It could be that the Association, strapped for cash, repudiated the contract because and unenforceable contract can’t be sued on. Right?
Here’s the Press Release:
FOR IMMEDIATE RELEASE News Media Contact:
October 31, 2007 Mary Diamond (202) 418-2388
FCC Adopts Rules to Increase Choice and Competition Among Video Providers for Consumers Residing in Multiple Dwelling Units
Washington, DC – The Federal Communications Commission (FCC) today adopted a Report and Order (Order) banning the use of exclusivity clauses for the provision of video services to multiple dwelling units (“MDUs”) or other real estate developments. The Order finds that nearly 30% of Americans live in MDUs and these numbers are growing.
With this proceeding, the Commission is taking another step to foster greater competition in the market for the delivery of multichannel video programming. These rules will increase choice and competition for consumers residing in MDUs and other real estate developments. In this Order, the Commission prohibits the enforcement or execution of existing exclusivity clauses and the execution of new ones by MVPDs subject to section 628 of the Communications Act. Specifically the Order finds that:
· exclusivity clauses that bar competitive entry harm competition and broadband deployment and can insulate the incumbent MVPD from any need to improve its service.
· exclusivity clauses are widespread in agreements between MVPDs and MDU owners.
· incumbent cable operators have increased the use of exclusivity clauses in their agreements with MDU owners with the entry of LECs into the video marketplace.
· the use of exclusivity clauses in contracts for the provision of video services to MDUs constitutes an unfair method of competition or an unfair act or practice under Section 628(b).
The Commission also adopted a Further Notice of the Proposed Rulemaking (Further Notice) that seeks comment on whether we should take action to address exclusivity clauses entered into by DBS providers, private cable operators, and other MVPDs who are not subject to Section 628. The Further Notice also seeks comment on whether the Commission should prohibit exclusive marketing and bulk billing arrangements.
Action by the Commission, October 31, 2007 by Report and Order (FCC 07-189). Chairman Martin, Commissioners Copps, Adelstein and Tate with Commissioner McDowell concurring. Separate statements issued by Chairman Martin, Commissioners Copps, Adelstein, Tate and McDowell.
–FCC–
Media Bureau Contacts: Holly Saurer (202) 418-2120
John Norton (202) 418-2120
I doubt the association or management company had any sort of strategy in their non-payment to the cable provider. I bet they barely have enough funds to keep the electricity on in the building.
Do any readers live in this condo? I’m curious what the true state of affairs are…did the assn find a new cable provider, or are the residents stuck with no service, or are residents obligated to obtain service on their own (thus removing cable services as an assn common expense)?
I currently live in the building, and yes, the building is having trouble keeping the lights on. The association as of the last board meeting in november was some 225, 000 past due to primecast and 400,000 past due to FPL. This is truly a sad situation and something I did not bargain for when signing a lease in October. The owners, already losing money on most rental units, are completely unwilling to let tenants out of their leases or try to reduce the rent due to the lack of services. Lesson learned: Do more research before you move into what you think is a great condo.
This is unbelievible!!! I know thing’s are bad in southern Florida ,but didn’t know it was this bad.
I a just signed a short term lease , I’m very happy to move in this gorgeous building…….hoping that nothing will affect me while I reside there.
Does anyone have info on all the preforclosures in the building?
Albert99,
What kind of information do you want? If you want to find out about prices then take a look at the Condo Deals link at the top of this site. There are a bunch of short-sales and foreclosures listed there for The Club at Brickell Bay.
Thanks! The SP’s are still inflated. To high to be preforclosure.
I heard that this building now has a great management company which essentially means nothing if the money is not coming in. Anyone know the status of the condo association?
Hello all… I have been reading this great blog for a few days now and first of all – I would like to thank the owner of this blog and the contributors for the valuable posts and information… I was wondering if I can get some guidance here… My wife and I are first time buyers; preapproved for 250k and are looking to buy a 2 bedroom in either Brickell or Downtown in a fairly new building. These areas were out of our price range but it seems like some buildings are becoming affordable!
The prices of both “Club at Brickell and The Vue” are very attractive and we looked at a couple of listings on the blog which really caught our attention… Even a 3/2 at the Vue is $279K which seems way too low and there has to be catch!!! I have some of questions perhaps someone can guide us on what seems to be a very hard decision:
1- Is it wise to buy at these buildings considering the high rate of foreclosures (will the bank have an issue there?)
2- What are the chances that the association fees going up dramatically in order for the associations to make up for the deficit from unoccupied units. Let’s say we plan to live ther for at least 5 years…
3-Why are these two buildings so cheap and keep going down – Solaris is just next door to the Club but is much more expensive and both are going to get their view blocked by the new development!
4-If we are planning to live there for at least five years, is it a good investment to buy at either building?
5-Last question, are property taxes paid on the sale price of the unit or the appraised value? I am assuming the sale value.
Thanks in advance
Hamada
The catch on the condo ” The Vue ” would have to be that there maintenance fee is $700 on a one bedroom apt. with the condo value of 110,000 so there your catch be ware. I’m looking to buy also. buy safe :o)
I have a 30 day lease to stay at The Club AT Brickell Bay ,jan o9 .Will the place be open for business. Who owns the bulding. Should I cancel the lease, stay in hotel.
Hamada // Aug 25, 2008 at 1:29 am
”
Hello all… I have been reading this great blog for a few days now and first of all – I would like to thank the owner of this blog and the contributors for the valuable posts and information… I was wondering if I can get some guidance here… My wife and I are first time buyers; preapproved for 250k and are looking to buy a 2 bedroom in either Brickell or Downtown in a fairly new building. These areas were out of our price range but it seems like some buildings are becoming affordable!
The prices of both “Club at Brickell and The Vue” are very attractive and we looked at a couple of listings on the blog which really caught our attention… Even a 3/2 at the Vue is $279K which seems way too low and there has to be catch!!! I have some of questions perhaps someone can guide us on what seems to be a very hard decision:
1- Is it wise to buy at these buildings considering the high rate of foreclosures (will the bank have an issue there?)
2- What are the chances that the association fees going up dramatically in order for the associations to make up for the deficit from unoccupied units. Let’s say we plan to live ther for at least 5 years…
3-Why are these two buildings so cheap and keep going down – Solaris is just next door to the Club but is much more expensive and both are going to get their view blocked by the new development!
4-If we are planning to live there for at least five years, is it a good investment to buy at either building?
5-Last question, are property taxes paid on the sale price of the unit or the appraised value? I am assuming the sale value.
Thanks in advance
Hamada”
Hamada,
I’m going to do you a favor and not be kind.
You do not know what you are doing, your ignorance is almost overwhelming and your questions, specially #4 is an example of why we are at this sorry place.
A condo/house is NOT and investment, it is a place to live in.
Since you ask questions like 1,2,3 and 5 it shows that you have been brainwashed , as have many others. If you have to ask these questions you have no business in investing in RE. Have you not been reading this blog/forum? Try reading the International Herald Tribune or better yet Asia Times and then hug your wife and kids and try hard, really hard, to protect your assets, as in a return of principle rather than a return on principle.
There was a time, say 10 years ago, when you could buy RE and expect a return on this buy coming from rent, thus a RE could have it’s PE ratio of sorts. You did NOTt have to buy hoping that some greater fool would come in after you so you could unload your POS. That my friend is called speculation, NOT investment.
Really friend, go hug your wife and kids.
Unless you are a cash buyer you will not be able to get financing as it has been “blacklisted” informally by most if not all lenders. I am a real estate broker and an owner. And contrary to the last e mail I am not stupid. I am an owner of a great Penthouse condo but alas I can’t sell it even at less that $400k. I paid $450k. Most if not all new construction in Miami are in the same situation. Pretty much all homes and condos in Florida have seen a decrease in value of at least 40 to 60%.
My original HOA monthly fee was $485 but is now $602. I see no good or easy way to get out of this.
I may become a foreclosure statistic as well.
Muir,
Thanks for the advice but I do not think you live in this world. I will let you know very soon how an IT guy like me made A WELL-THOUGHT INVESTMENT IN A CONDO, YES A “CONDO INVESTMENT” in this awesome market! Stay tuned … BTW, that comment about hugging the wife and kids that I do not have is stupid — I am quite young to be doing the hugging-while-reading-a-paper crap! You have a dry sense of humor!
Paul,
Thanks for the info, you actually helped me realize something I have overlooked about this building! You are actually wrong about the blacklisting of The Club.