Closed door meetings with lawyers. Allegations of conflict of interest. A demand for retraction from one condo president after an email blast to another building’s members. It’s all part of a growing battle at Key Colony, the condominium complex that is home to one out of every four Key Biscayners.
HOA Board members met recently behind closed doors to consider legal options arising from a dispute over unpaid fees, officials said. Meanwhile, leaders of two of the four buildings are calling for a formal change in the governance structure that would alter a key accounting relationship that has existed since the complex was built in the late 1970s.
The proposal, a kind of financial divorce, comes as the complex is moving through costly repairs that have raised fees for the 1,179 units. A recent $105,000 fraud at one of the buildings, Botanica, has only exacerbated tensions, and owner chat boards reflect the unease.
Indeed, across Florida, many condo residents are facing increased fees as buildings move to comply with tougher standards imposed in the wake of the Surfside condo collapse. The Village of Key Biscayne now issues regular reports on building certification compliance.
The feelings at Key Colony were so raw that at a meeting last week, Key Biscayne police were summoned during the owner comment period. Police Chief Frank Sousa said officers left after determining there was no issue to respond to.
Disputed Fees and a proposal for change
One focal point is a $145,119.04 invoice sent in January from HOA, the main association, to Emerald Bay, one of the four buildings at Key Colony, according to HOA records. The amount represents fees to maintain the HOA’s amenities, such as tennis courts, pools and the ocean beach.
Emerald Bay President Louisa Conway is disputing the invoice, saying it’s not her building’s job to be the collection agent for the HOA. “It is their fiduciary duty to collect and manage their own finances,” Conway said.
Joining her is H. Frances Reaves, the president of the Oceansound building, who says the old arrangement needs to be changed.
“We have to have a change in the by-laws,” Reaves said, who took aim at the current HOA President, David McDanal. “We are tired of people from Botanica running the towers.”
The HOA, so far, is sticking to its guns. It passed a resolution Jan. 18 “confirming” the existing fee collection arrangement which it maintains is part of the complex’s governing documents. Interestingly, the resolution was approved unanimously, including votes from representatives of Emerald Bay and Oceansound. Years ago, leaders of the four buildings appointed the HOA board, but today, they are independently elected by their respective buildings.
Conway dismissed the HOA vote in a meeting that again featured raised voices. “This is a silly little resolution that has no binding on any of us,” she said.
Demand for retraction
But the fee fight has erupted into more than a debate over collection methods, with Reaves singling out HOA President David McDanal, and McDanal demanding a retraction.
In a Jan. 28 letter sent to Oceansound owners, she said McDanal, who is also the Botanica treasurer, had a “blatant conflict of interest” serving in both positions. The letter also said a recent phishing fraud at Botanica “has shown a fiduciary issue.” She called for him to resign.
McDanal fired back Feb. 2, demanding a retraction and asserting that the letter defamed him.
“Falsely accusing me of being negligent and responsible for the fraud that befell Botanica is a defamatory statement,” he wrote. McDanal, a licensed investment professional, said the accusations threatened his livelihood.
There was no comment from Reaves as of Wednesday to McDanal’s letter.
Despite the strain — or maybe because of it — few have decided to run for office. On Wednesday, the HOA said that all eight candidates for the 2023 board were elected unopposed: no one else ran for office.
Tony Winton is the editor-in-chief of the Key Biscayne Independent and president of Miami Fourth Estate, Inc. He worked previously at The Associated Press for three decades winning multiple Edward R. Murrow awards. He was president of the News Media Guild, a journalism union, for 10 years. Born in Chicago, he is a graduate of Columbia University. His interests are photography and technology, sailing, cooking, and science fiction.