A ragtag alliance of West Palm Beach condo owners is suing a former sober home operator who they say overtook their association, hired bully security guards, and is forcing them out with monthly fees that rival high-end gated communities.
The March lawsuit raises the claims against the Green Terrace Condominium Association and Ken Bailynson, who owns 36 of the community’s 84 units, is a member of the governing board, and founded Good Decisions Sober Living.
While staging a condominium coup is extreme, attorneys who specialize in association law warn it can happen in the type of shared communities so abundant in South Florida.
“This kind of nightmare is possible if you’re not diligent and don’t stand up for yourself,” said West Palm Beach attorney William Pincus, who is representing the Green Terrace unit owners.
Green Terrace owners say the takeover began with Good Decisions, which was headquartered at the complex and housed recovering addicts there until it was raided by the FBI in September and closed. Bailynson has not been charged with any crime in relation to the raid.
But unit owners, some of whom testified during a daylong hearing last week that continues Monday, complain Bailynson wants the 42-year-old community for himself and is willing to skirt the law to get it.
“Bailynson treats the association as if he owns all of it, as if it is a kingdom and he is the king,” the lawsuit states. “The (association) board members essentially act as his minions and vote as he directs.”
Attorneys representing Bailynson did not return calls for comment last week, but in legal documents they call the accusations against him “sensational” and a “far-reaching conspiracy.”
The lawsuit, which is being heard by Palm Beach County Circuit Court Judge Gregory Keyser, seeks to bar Bailynson and the association from taking out two loans totaling $4 million to do repairs and renovations on Green Terrace units.
The loans, the first of which carries a 24 percent interest rate, would come from a company called BOK Lending II, which is managed by Ken Bailynson. Bailynson is also listed as the firm’s registered agent.
If the loans are approved, monthly assessments are expected to increase to $2,000 per month.
“We are so afraid we are going to lose our homes,” said Angela Ciriello, whose mother, Vicki Lynn Ciriello, bought her Green Terrace unit in 2011 for $12,000. “We are not loaded with cash. It’s obvious Ken wants everything.”
Green Terrace’s problems 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.
There was no reserve fund until last year, and the City of West Palm Beach declared the condominium a chronic nuisance because its state of disrepair.
Today, a massive renovation to replace siding, decks and windows is ongoing, but it’s something some residents say they can’t afford and weren’t told about.
Pincus said Bailynson stacked the association board with former Good Decisions employees. The lawsuit says he sold them their units for as little as $10 and pays their association fees. While Bailynson owns 36 units in his name, the association owns an additional 17. That means, between them, they own 63 percent of the community.
At last week’s hearing, Pincus said the board members who testified didn’t know the specifics of things they had voted to approve.
“The directors looked like they had no clue about the details,” Pincus said. “They knew they had approved renovations, but didn’t know what it entailed or what it was costing. They knew they had approved security, but not how much it cost.”
The lawsuit claims the board paid $134,900 for security last year. Unit owners say they are intimidated by the guards, who patrol the small complex in golf carts, and act as Bailynson’s “personal bodyguards.”
Eric Mccabe, an owner who rents out his units, said he used to visit the complex monthly, but now feels it is a “hostile situation.”
“You are immediately greeted by these big guys and it’s like a shakedown,” McCabe said on the witness stand Tuesday. “They’re asking ‘Where are you going, what’s your purpose here, what do you need.’”