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Condo owners feel trapped

Sober house operator may be community’s only hope

Things were grim for Green Terrace condominium even before the addicts moved in.

The mighty rise and epic fail of the real estate market left reserves dried up, city fines mounting, no insurance, multiple foreclosures and an opening for a businessman who saw a future in South Florida’s sober home industry.

Ken Bailynson bought units at Dollar Store prices to house clients of his Good Decisions Sober Living. By last count, he owned 37 in the 84-unit complex. Under his leadership last year, the condo association levied special improvement fees of up to $1,400 per month, and foreclosed on an 81-year-old when she couldn’t pay.

Then in September, the FBI raided Good Decisions.

A remaining group of Green Terrace owners breathed a sigh of relief when it shut down.

But that wasn’t the end of the story. Because in real estate’s new arena, fortune is unpredictable, and one man’s revitalization is another’s ruin.

Bailynson, who has not been charged with any crime in relation to the raid, is reviled by some Green Terrace owners.

He is accused of hiking monthly maintenance dues to force owners out. An online video shows him screaming profanities and racial slurs in the condo’s parking lot. And he is scorned for operating a heavy-handed security team that repeatedly stopped a Palm Beach Post reporter and photographer who were invited in by a resident last week, telling them they would be forced to leave if they took pictures.

Yet Bailynson may hold Green Terrace’s only lifeline.

A $1.5 million loan with an annual interest rate of 25 percent has been offered to the Green Terrace association board by BOK Lending, Inc. to make fixes vital to getting insurance and staving off city liens that total $336,500.

BOK’s president is the sober house owner, Ken Bailynson. On Saturday, unit owners were circulating an agenda for a March 3 meeting that included a new loan offer from BOK Lending II LLC. Also to be discussed was an amendment to increase the 2015 budget.

“It’s pretty easy to figure out what’s going on here,” said Richard Zaretsky, an attorney representing Bailynson. “The property is in deplorable condition. No bank will lend because there isn’t an insurable asset and he has to get this place to a point where he can get his investment out.”

Green Terrace’s decline began before Bailynson started picking up units in 2011. A state investigation found that association meeting minutes hadn’t been taken for at least seven years, and records before 2013 are missing — allegedly stolen out of the truck of a previous board president.

Today, siding peels from unit exteriors like sunburned skin. Decks are in danger of collapse.

“They say this is the repercussion for living in a community neglected for years,” said Angela Ciriello, whose mother bought a unit in 2011. “But if I just pay dues, it ends up being more than what the property is valued at.”

Ciriello said Bailynson called the police on her last month when she had a contractor looking at fixes to her monther’s unit. A West Palm Beach Police report blacks out the caller’s name, but the officer writes that he explained to the caller that since he didn’t own the unit, Ciriello could have a contractor there.

“The (caller) stated that he didn’t care who owned the unit, he didn’t want work done,” the officer wrote.

Bailynson, who served as president of the association board last year, according to Florida Department of state records, was also elected to the board in February along with at least one former Good Decisions Sober Living employee.

A proposed 2015 budget earmarks $360,000 to pay interest on the $1.5 million loan. As of last week, Zaretsky said the loan was authorized by the board, but had not yet been made. Total monthly maintenance fees range from $1,154 to $1,309, according to the budget.

Many owners bought units at the bottom of the market to lease out, but ended up spending more on association-levied special assessments last year than what they were getting in rent.

Just four of Green Terrace’s 84 units have homestead exemptions, indicating the owner considers it a primary residence.

One of the four is 81-year-old Elena Sanchez, who bought her unit outright in 1999 for $34,000. She fell behind on her association dues in August when monthly special assessments reached $1,415.

The Green Terrace Condominium Association filed a lien against Sanchez in November. It followed with a foreclosure in January.

“I live in a $300,000 home and I only pay $300 per month in dues,” said Sanchez’s nephew Luis Martinez, who likened Green Terrace to living in a third world country. “Ken’s trying to force her out.”

A City of West Palm Beach code enforcement officer noted in an October filing that Bailynson said he “would like to look into an assisted living facility, or is it better to just rent normally.”

Michael Gelfand, an attorney who focuses on association law and is chair-elect of the Real Property, Probate and Trust Law Section of the Florida Bar, empathizes with Green Terrace owners, but said there are risks in living in an association.

“Here, my question is, does any of this make any type of economic sense?” Gelfand said. “Or are they getting a loan for more than the property is worth under fair market value?”

Under state law, a condominium can be terminated and used for other purposes with votes from 80 percent of the units. Bailynson and the Green Terrace association own a combined 57 percent.

Green Terrace, near the corner of Belvedere Road and Georgia Avenue, was once an attractive community with units selling during the real estate boom in the mid-$100,000s.

Palm Beach County property records show Bailynson began buying Green Terrace units in 2011 but picked up speed in 2013. He bought a unit in November for a recorded $11,430, but got one for as cheap as $8,116 in August, according to deeds filed in official records.

Shishir Choksi, bought his three-bedroom unit for $18,500 in May 2011. It had sold for as high as $160,000 in 2007.

In the beginning, Choksi said he paid $511 per month in association dues. That grew to $1,154 this year with $714 in maintenance fees and $440 to regrow the reserve. Choksi charges $950 per month in rent.

“This is total craziness. It’s ridiculous,” Choksi said. “It’s just been so run down and had so many foreclosures, it’s a total mess. No one is watching and people are taking advantage of that.”

The Florida Department of Business and Professional Regulation, DBPR, has an open investigation into complaints about the Green Terrace association. A handful of violations were noted in a November report.

According to investigators: 2014 board members were elected during the wrong month, 2013 financial statements were not properly prepared, the meeting notice to vote on the $500,079 special assessment did not provide estimated costs of the assessment, and the association had failed to maintain meeting minutes for at least seven years.

The report says that although records before December 2013 were stolen from the truck of former association president John Oswald, “the association was unable to provide the division with a police report to support Mr. Oswald’s claims.”

Davenport Professional Management in Lake Worth was hired in February 2014 to oversee the association. It told state investigators that the records it could locate were in “disarray.”

In a January association meeting at Davenport’s office, Bailynson is referred to as a “white knight” for his willingness to loan the association money, according to a video posted on YouTube.

“The board has a fiduciary responsibility to do what they can to protect their investments, even if they have to spend money to do it,” said Bailynson’s attorney, Zaretsky.

But a handful of unit owners just want out.

Sergio Santos said he had his Green Terrace condo listed on the market recently for $36,000, then marked it down to $22,000. He got dozens of calls and thought he had a buyer until they learned about the high monthly dues.

“Every buyer is scared off,” Santos said.

Unit owner Reggie Rock put his name in the running during the February board election. He wasn’t even allowed to vote because he owns the unit with his wife and uncle and didn’t have a proxy statement giving him power to vote.

“It’s just not worth the fight anymore,” said Rock, who called Bailynson to see if he wanted to buy his unit. “I’m probably $50,000 in the hole right now and just throwing bad money at this every month.”

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