They welcomed him with open arms, because they thought he was their salvation.
In March of 2015, a judge assigned a professional to rescue a 310-unit condominium in Miami Gardens, at the request of lawyers for Miami-Dade County. The “receiver” was to collect payments in arrears, correct dangerous code violations, carry out repairs and settle county fines running in the millions.
Eleventh District Circuit Court Judge Eric Hendon named former judge Jorge J. Pérez as the receiver.
Owners at the Mirassou condos — mostly working class people like teachers, mechanics and nurses — said they did not know how much the receiver was going to cost them. The judge's order said only that the costs should be “reasonable.”
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But two years later, the owners are now asking Hendon to remove Pérez, who along with his team is charging more than $2 million. The condo collected only about $900,000 in the past two years, and still owes millions of dollars in fines to the county.
“We are poor families. We live on a salary. We're not millionaires, and now we have to pay that man nearly $2 million,” said owner and school counselor Tania Portela. “Where are we going to get that money?”
We are poor families...Where are we going to get that money?
Tania Portela, condo owner
Pérez is now seeking a loan from TotalBank so that he can be paid money owed to him and his team, according to a letter submitted as part of the court case.
Mirassou owners would pay off the loan over seven years in a special assessment that would add nearly $100 to their monthly maintenance bills, which range from $220 to $375.
Judge Hendon was scheduled to rule on the loan during a hearing Friday, but he recused himself from the case on Thursday morning. According to court documents, the judge wanted to “avoid the appearance of impropriety” after receiving an “exparte communication” from Pérez at 12:21 a.m. Thursday. In an email, Pérez asks Hendon “as a friend, an officer of the court and your receiver and friend” to “impose full control of the courtroom Friday” by not allowing cameras in the hearing.
Read Perez’s email to Hendon here.
Pérez’s request came following a report aired on Wednesday by Univisión 23 of an investigation with el Nuevo Herald on the Mirassou receivership case. In his letter, Pérez called the news report “lies” and said his mother was “in a fragile state” as a result of seeing him “being slandered” on TV.
Now the court has to appoint a new judge to the case. Mirassou owners were planning to ask Hendon again to remove Pérez from the case and return control of the condo to the board of directors.
El Nuevo Herald and Univisión 23 published a recent series of stories on condo abuses and corruption and the failures of the state government to oversee the actions of board members. The investigation led to tighter state laws and regulations on condo elections, conflicts of interest and other issues.
But in cases like Mirassou’s, the power to fix problems are in the hands of receivers who are picked by judges and given full control of the association and its finances.
Florida laws allow receivers to be paid “reasonable fees” for rescuing condo associations that are on the brink of bankruptcy or face significant structural problems and code violations. Some experts say, however, that receivers lack proper supervision and that the term “reasonable” is not clear.
Journalists covering the story reviewed hundreds of documents in the Mirassou case. They showed a pattern of requests for extensions on the deadlines imposed by the judge on Pérez, who charges $525 per hour. His average monthly bill has been $45,000.
For the owners, that figure simply does not match their reality. Some of the condo ceilings leak, walls are cracked and stained and the paint is peeling. Some hallway lights are broken and the tennis court does not have a net. What's worse, residents said, is that the condo still faces million-dollar fines that the judge ordered Pérez to resolve in 2015 and 2016.
Pérez declined requests for an interview and did not respond to a list of questions sent to him. The journalists received a statement from David Axelman, an attorney with the Bryan Cave law office, where Pérez is a partner.
Pérez and his team “are proud of their accomplishments” and the work they have done for Mirassou, the letter says. Axelman pointed out that all the receiver’s reports (including the fees) have been approved by the court.
“Judge Hendon has acknowledged numerous times in open court... that the receiver has worked wonders in reviving the Association and rescuing the property from condemnation”.
Read the full letter here.
Hendon did not respond to written questions about the definition of “reasonable compensation.” He and Chief Judge Bertila Soto referred all questions to Eunice Sigler, spokesperson for the Miami-Dade Civil Court.
Sigler said judges cannot talk about cases pending before them and added that when Hendon appointed Pérez, he gave all sides 15 days to submit any objections to his reports in writing to the court.
Several owners said they did not know that they had the right to object, or that they had to do it in writing. They also did not know that information about Pérez’s fees are available on the court's Web page.
“We were blind, in part because of our ignorance and in part because we trusted [the system],” said María Roque, a teacher and board member of the Mirassou association.
“He was the law, picked by a judge to save us,” added Portela.
We were blind, in part because of our ignorance and in part because we trusted [the system].
María Roque, Mirassou association
Pérez became the receiver for Mirassou after a group of owners fought a court battle to remove a previous receiver, Caridad Ortega, whom they also accused of mismanagement and overcharging.
In 2003, Pérez was appointed as a judge to the Miami-Dade Eleventh District Circuit Court by former Gov. Jeb Bush. He served in the criminal and juvenile divisions. He resigned in 2007 and has since worked in well-known law firms.
“He stood in front of us and told us, 'I’m a former judge. I was sent by the court to help you. Don't worry. What I'm going to charge you is within the costs that the court allows,” said Roque, who participated in the owners' first meeting with Pérez.
THE WORK OF A SAVIOR
Among the tasks that Hendon required for Pérez was to repair seven elevators and settle $5 million in county fines for code violations. The judge set a deadline of as long as one year for settling the fines, which would have reduced the debt.
The elevators finally started to work, after years of malfunctioning. But two years after Perez’s appointment, they have not received permanent operation permits and the condo still owes the same $5 million in fines.
Pérez is now seeking another special assessment to pay $175,000 to the elevator repair company and obtain the final operating permits.
Miami-Dade officials confirmed that no permits were issued to correct two of the other four violations for structural problems that should have been resolved within the set deadline. The association now owes another $30,000 in fines. The county has put a lien on the condominium.
Hendon gave Pérez the authority to manage the condo's finances, contracts and the units that were vacant.
Pérez carried out other improvements. The parking area was painted, the front gate was fixed and a pool that had been closed for years is now in use by the families. But some owners said they started to worry because they didn’t know how much his fees would be. There was no condo board at the time, even though Hendon ordered Pérez to create one immediately. The board was created a year later, in March of 2016.
Fifteen months after Pérez was appointed as receiver, owners were stunned when, during a meeting, he handed them the bill: $1.4 million for the first 14 months of work.
Residents said they did not know that Pérez's request for payments were filed with the court regularly and can be accessed by the public online.
MILLIONS IN FEES
El Nuevo Herald and Univisión 23 reviewed the 18 reports filed by Pérez since March of 2015.
Among the bills:
▪ Pérez billed $946,406 over 21 months, averaging four hours of work per day. For the first 19 months, the fees were billed through the law firm where he was a partner, Squire Patton Boggs. He moved in November to Bryan Cave.
▪ Squire Patton Boggs charged another $425,832 over 19 months for the work of paralegal Rita Patel Puri, who billed an average of six hours a day at $193 per hour.
▪ Squire Patton Boggs billed another $309,387 for the work of seven other lawyers until Pérez left the law firm.
▪ Attorney Paul D. Breitner, part of the legal firm, The Barthet, billed another $411,606.
▪ Stanley Foodman, from the accounting firm, Foodman CPA and Advisors, billed $193,181.
▪ The maintenance company KW Property Management and Consulting billed $362,000 and checks for a total of $20,000 were issued to KW manager, Suleye Escalada, records show.
Overall, the records showed Pérez and his team billed about $2.6 million. The owners' association has only collected $970,000 in the past two years, according to a March 10 report in the court files.
“Your honor, it's like we needed to paint a wall ...and you forced us to hire Michelangelo,” Pedro Ortega, who owns several apartments in Mirassou, told the judge during a court hearing in February.
Your honor, it's like we needed to paint a wall ...and you forced us to hire Michelangelo.
Pedro Ortega, condo owner
The dispute grew heated after a court hearing in April, when owners confronted Pérez in the hallway and screamed that his fees were outlandish for a low and middle income property. The average price of units sold in Mirassou in 2016 was $107,000.
Asked why they did not hire their own lawyer, a dozen Mirassou owners said they trusted Pérez because Hendon had appointed him “as a representative of the court.”
Now they fear that the medicine was worse than the disease.
“Why did we need the receiver? This property could have been rescued without him because at $525 per hour, no property is going to be rescued from a new foreclosure,” said Roque.
Owners at the April hearing complained to Hendon about what they consider to be exorbitant costs. But the court accepts only written objections. A few weeks later, the judge approved another $77,000 bill for professional fees for Pérez and his team.
Hendon has said during court hearings that he is “pleased with the results” of Pérez's work. The receiver has told the judge that the complaints come from condo owners, who are unappreciative of his good work, and that some owners cannot pay the bills because they “live beyond their means.”
THE BAL HARBOUR CASE
Pérez faced similar complaints in a 2013 case still pending in federal bankruptcy court in South Florida.
In that case, Pérez angered owners of the luxury One Bal Harbor Resort and Spa when he billed $2.4 million for 18 months of work as receiver.
“The receiver and his law firm systematically exploited their appointment as a fiduciaries by the state court as a bottomless trough to enable a feeding frenzy to line the pockets of those involved,” wrote Charles Tatelbaum, the attorney who represented some owners in that case.
A negotiated agreement reduced Pérez's fees by 50 percent, to $1.4 million, but some of the owners are still contesting the fees in court.
Erika Carrillo is a reporter with Univisión 23. Producer Juan Camilo Gómez contributed to this report.
Follow Brenda Medina on Twitter: @BrendaMedinar