A receiver took over an embattled Pembroke Pines condo association that residents allege was long mismanaged by former board members, The Real Deal has learned.
The lakefront Heron Pond complex, consisting of 19 two-story beige buildings, has been repeatedly slammed by the city over structural safety issues. Since last summer, Pembroke Pines officials ordered the evacuation of six buildings and 26 units in seven other buildings, rendering 122 of the 304 units uninhabitable, according to city records.
City inspectors have provided multiple notices about Florida building and fire code violations, but the association has failed to address the issues, records show.
In late April, Broward County Chief Judge Jack Tuter Jr. appointed Daniel Stermer, managing director of consulting and financial advisory firm Development Services and a former mayor of Weston, as receiver of Heron Pond.
“The priorities are getting our arms around the property, around the association, understanding its status, and we will report to the court what our initial findings are and take those steps necessary to continue,” Stermer said.
Heron Pond, which sits on 25 acres at 8400 Southwest First Street, was completed in 1988 as apartments and converted to condos in 2006. Aging condo complexes across South Florida are grappling with paying for costly, legally mandated repairs and recertifications, as well as dealing with strict compliance deadlines imposed by new condo safety laws passed following the Surfside condo collapse in 2021.
But some Heron Pond unit owners say their complex is in disrepair due to a ploy by ex-board members.
In court filings, Heron Pond unit owners allege individuals used a secret entity, Federated Foundation Trust, to amass at least 109 units, took a majority on the board of directors, and then mismanaged the complex as a possible scheme to drive down the value of units and the complex.
“It is believed that these individuals may have wanted the association’s common elements to fall into a state of disrepair so that they could acquire more units … at a reduced/discounted cost,” James Rhodes, the association’s new president, wrote in his court motion requesting the appointment of a receiver.
The motion alleged the previous board members engaged in self-dealing, violated their fiduciary duties, and engaged in “egregious” acts. It has left the association in a dire situation, unable to secure neither a loan to fund repairs nor directors and officers liability insurance, according to the filings. A 2021 structural assessment by Akouri Consulting Engineers determined all Heron Pond buildings were in “poor condition,” according to the motion for a receiver.
The engineering report found wood studs, joists and sheathing were “significantly compromised” from long-term moisture exposure due to cracks created by failed stucco and paint at Heron Pond buildings. Roof trusses were “infested” with termites and household items were stored in attics, which is a fire hazard, according to the report.
Heron Pond’s woes come amid a rising tide of association-governed communities in South Florida alleging fraud by former or current board members. Generally, residents have claimed board members have plundered association coffers, which are financed by homeowners’ assessments; imposed skyrocketing assessments without fixing up properties; and engaged in election fraud.
At Heron Pond, unit owners point the finger at one person they say is the primary individual operating the units owned by Federated Foundation Trust: Peter Patel, a former board member.
But who is Patel? Court documents, including the motion for a receiver, say Patel is merely an alias, and his real name is Piyush Viradia.
Each of the unit owners who filed nine separate lawsuits since October against the association and Patel, alleging negligence and failure to maintain Heron Pond, have sought to amend their complaints and substitute Patel as a defendant for Viradia, records show.
The suits don’t provide details on how residents know Patel is an alias for Viradia, and attorneys for the unit owners remained mum on how they made the connection. Attorney Kevin Szmuc, who represents the unit owners who are suing, said they have not been able to locate Patel to serve him with the lawsuit.
“We have reason to believe that Peter Patel is not his real name and amended the complaint to reflect the actual identity of this individual,” he said.
One unit owner said they inferred Viradia and Patel are the same person from a Broward County traffic fine violation against Viradia that listed the same vehicle Patel is seen driving at Heron Pond. Other unit owners pointed to records, pointing out connections between Viradia and the Federated Foundation trustee.
Before the 109 Heron Pond units were consolidated under the ownership of Federated Foundation Trust, some of the condos were transferred among other trusts, individuals and entities for nominal amounts of $10, records show.
In one of the deals, Viradia sold two Heron Pond units in 2016 to Heron Pond Land Trust, which lists Kirschbaum Law Office as the trustee. The same law firm, which lists offices in Boynton Beach and West Palm Beach, is the trustee for Federated Foundation, according to records.
Faced with the mounting litigation, Patel/Viradia resigned from the board last fall. Shortly before that, he signed a lease on behalf of the association with entity EQS Management for space at Heron Pond’s clubhouse for $450 in annual rent, a violation of condo governing documents that require association approval for such deals, according to the motion requesting a receiver.
The lease was likely inked for EQS to manage Federated Foundation’s condo units, the filing says.
Warren Kirschbaum, of the Kirschbaum law firm that’s trustee for Federated Foundation, didn’t return a request for comment.
For now, receiver Stermer will plow through records with the goal of ultimately bringing Heron Pond into compliance, so residents can move back into evacuated buildings. Stermer will file monthly status reports on the progress of his work. Yet it could be complicated, as the court motion requesting a receiver alleged that prior board members failed to maintain official association records in violation of the condo act.
In the meantime, unit owners like Clarissa Florival-Victor are reeling in the aftermath of the alleged yearslong mismanagement.
While she wasn’t evacuated from her unit, the mother of two young girls chose to leave Heron Pond and rent elsewhere. The deterioration of the complex led to safety concerns, including squatters and break-ins, she said.
“Right now I am paying rent and my mortgage and association fees [of $540 a month]. I am paying over $5,000 a month, including everything,” Florival-Victor said. “I just want this to be over soon. It’s financially devastating. The community is not what it was.”