A dissident group of residents at the luxury Harbor Towers has failed in its effort to halt a $75 million renovation project that has saddled unit owners with one-time bills of tens to hundreds of thousands of dollars. The group sued last month, seeking an injunction to stop replacement work on decades-old electrical, heating, air conditioning, and ventilation systems that the trustees had hired a company to complete following several years of analysis and debate. The group contends the replacement project was ill-advised and may be unnecessary.
But late last week, a Suffolk County Superior Court judge denied the request, telling the group it had little prospect of proving its case that the trustees had breached their fiduciary duties to residents. "I'm sorry we couldn't help the unit owners more on doing something about this assessment," said plaintiff Francesco Pompei, owner of a penthouse unit in one of the two 40-story towers on Boston Harbor. "We're reviewing our options."
In her ruling, Judge Judith Fabricant wrote that the Harbor Towers trustees "have offered strong evidence that issuance of an injunction would at least delay the project, inevitably and substantially increasing its ultimate cost, as well as increasing its disruptive effect on unit owners." Pompei and other residents contended that the pipes carrying heating and cooling water may not be in such bad shape that they all need to be replaced. Hundreds of thousands of dollars have been spent on engineers and consultants, but Pompei said more analysis was needed.
Some 40 percent of unit owners had signed a petition asking that further tests be done on the mechanical systems before work proceeded. "We do have some more testing we're going to do, to sort of triple-check things," said Diane Rubin, an attorney at Holland & Knight LLP who represents the trustees. But, she said, "The project is going forward."
The plaintiffs also objected to an assessment on all of the 500-plus condo owners ranging from $70,000 to $400,000 or more each - equaling about 20 percent of the units' market value. Some residents have said they will not be able to pay their assessments, which are due next Thursday. The trustees have so far collected $32 million in assessments from residents, said Barry Brown, another Holland & Knight attorney for the trustees. The condo group has also taken the unusual step of arranging with two financial institutions to help residents who need loans, he said. "I think they've closed probably two dozen loans with people," Brown said.
In her decision, Fabricant said the plan to use assessments to fund the work was not unreasonable, and she said the law gives "broad discretion" to condo owners' groups to make decisions to manage the buildings. "Nothing before the court suggests that the trustees have abused that discretion" by offering unit owners a discount on their assessments if they paid sooner rather than later.
Pompei said the court chose to apply a legal rule that "basically gives trustees unlimited power." He said he sought a decision applying "a reasonableness rule," which requires "more stringent standards for the trustees." But another Harbor Towers resident blasted Pompei's suggestion the dissidents may continue their fight. "If unit owners had any idea of the personal financial risk that's at stake for them if Pompei continues this frivolous lawsuit, I think they would be outraged," said Joe Baerlein, who is a former trustee.
Source: Boston.com