Miami-Dade County

Condo owners face financial losses under receivers’ watch

Former condo receiver Caridad Ortega at a hearing in front of Miami-Dade civil court judge José Rodríguez March 2.
Former condo receiver Caridad Ortega at a hearing in front of Miami-Dade civil court judge José Rodríguez March 2. rkoltun@elnuevoherald.com

Rodolfo Rodríguez believed he had made a good investment for his retirement when he bought a condo in Miami at a bargain price after the real estate crisis.

The 74-year-old taxi driver fixed up the apartment he bought for $20,000 in August 2011 and rented it to a family for $800 a month.

But there were hidden troubles at the Tropical Point condominium on Northwest 15th Street and 15th Avenue. Like many other Miami-Dade condominiums, its owners' association faced grave financial problems in the wake of the crisis. Its funds were shrinking as some owners defaulted on their mortgages and stopped paying the monthly maintenance fees.

And the board of directors had accepted a suggestion by the company hired to collect the fees owed, APG Partners LLC, to ask a judge in a Miami-Dade civil court to appoint a receiver who would help to fix the financial problems. Rodríguez and other owners, including some former members of the board, now say the receiver and companies linked to her became “their worst nightmare.”

Tropical Point is one of many Miami-Dade condos whose directors went to court to request the appointment of a receiver to help them regain their financial stability. In theory, the receivers take over units that are vacant or have defaulted on their mortgages, rent them and pass the income to the owners' association to make up for the owners who are not paying their maintenance fees. In exchange, the receiver is allowed to pocket a set percentage of the rent.

During the 18 months that Caridad Alina Ortega, the receiver appointed by Judge José Rodríguez, was in charge of Tropical Point, some of the owners paid thousands of dollars for maintenance and their debts, as well as special assessments. But conditions never improved, according to the testimony of several residents of the complex, which also faced a lien by the city of Miami. The electricity and water bills were not paid, and elevators and fire alarm and sprinklers were not repaired.

Barely one month after her appointment, Ortega put a lien on Rodríguez's unit for allegedly falling behind on payments of a special assessment to repair the elevator and fix up his apartment. The bill totaled $3,754, including late fees.

Rodríguez said he had just finished paying about $500 on his debt for maintenance fees, and had no more money.

“I got a real estate agent and decided to get out of there and sell, because the abuse was pretty clear, and those people had the backing of the court,” he said.

He sold the apartment for about $32,000 in March 2012. But before he could receive the money, Ortega sent him another bill for $14,000, for lawyers' fees and repairs to the building. If he did not pay, she could not remove the lien on the property.

Critics of the receivership system say that judges give receivers too much power over the homeowners' associations and then do little to monitor their performance. In fact, they add, some receivers work hand-in-hand with companies and lawyers that focus only on their own profits while the associations receive few if any benefits.

In Ortega's case, court documents show she used the services of at least seven companies to fix, rent and manage the apartments — most of them owned by the same people.

“To say that our experience with the receiver was a nightmare would be something of an understatement,” Amjad Farooq, president of the Tropical Point homeowners' association, told el Nuevo Herald. “Instead of helping us, the receiver brought us more chaos and humiliation. It resorted to a lot of bad and illegal practices.”

Ortega, who was named receiver of Tropical Point in January 2012, declined to comment for this report on the advice of her attorney, Ronald Strauss, because of pending court cases. The current representative of APG Partners, Steven Kates, did not reply to a request for an interview. Rogelio Cainzos, listed as the former APG administrator, told el Nuevo Herald he had just left a hospital and did not want to be interviewed.

Ortega was appointed as receiver for at least 12 other condominiums in Miami-Dade. Some of them later asked the courts to cancel her appointments.

“The victims generally have to get a lawyer to take their cases to court, and the fight can go on for years while these people are sucking the money out of the association,” said José Pazos, owner of Pazos Robaina Association Management, which manages condos. The company maintains a Web page on cases involving receivers.

An extraordinary case

In an order removing Ortega as receiver of the International Park I condos at 11800 SW 18th St. in November 2014, Judge Victoria Sigler noted the following issues, among others:

▪ Reports that the receiver was required to submit to the court every four months almost never arrived on time, which meant the court could not supervise Ortega's activities.“The receivers failure to file complaint quarterly receiver reports has frustrated the Court’s oversight and denied the condominium association, unit owners and tenants the benefits of a full accountability and transparency,” wrote Sigler.

▪ Ortega charged excessive amounts for costs and fees, sometimes more than double the amount allowed by the court. In one unit, she charged $2,500 even though she was allowed to charge only $1,500. “In summary, the Court disapproves the duplication of fees, subcontracting of services, and excessive fees which are contrary to the best interest of the receivership estate,” Sigler wrote.

▪ The receiver deprived at least one owner of his home in a fraudulent manner, by posting a false judicial owner on its door and changing the locks. The appointment of a receiver “does not deprive a party of the right to possession, this is a judicial determination,” the judge said in her order.

▪ Ortega had a conflict of interest when she hired companies to provide services for the condo without revealing important links. “The Court notes that the receiver’s designated vendors, Gables Professional Management Co., Community Rental Partners, LLC and APG Partners, are all registered companies of the property manager, Rogelio Cainzos, and have substantially profited from the receivership estate,” Sigler wrote.

Ortega's attorney Strauss — who is also listed as an agent for the majority of companies hired by Ortega and the ones that list Cainzos as administrator — told el Nuevo Herald that Sigler issued her order without considering any evidence or witnesses.

“There was no evidentiary hearing,” said Strauss, who declined further comment.

Miami-Dade Circuit Court Judge Beatrice Butchko told el Nuevo Herald that judges appoint receivers to help, not harm, the condominiums. But judges generally are not aware of irregularities committed by receivers, she added, and it is the responsibility of owners to inform the court.

“Obviously, someone who wants to be a receiver does not come to us and tell us, 'I am going to steal, I am going to harm the owners.' It doesn't work that way,” said Butchko, an administrative judge in the Circuit Civil Division. “In some cases these people are not doing the work they were appointed to do, but we judges have hundreds of cases and we are not monitoring all the actions of receivers. The owners have the responsibility for letting us know that the receiver is not doing his job.”

Some members of the industry believe, however, that the judges are not sufficiently aware of cases of fraud involving condo receivers and that their actions border on criminal.

“The court appoints these people, and it should be responsible for what those people do with the powers that it grants them,” Pazos said. “A receiver should be someone neutral, appointed randomly by a judge. But in these cases, it was the owners' associations that proposed the person they wanted appointed as receivers.”

Butchko said that if owners believe that a receiver is violating the law, it is the residents or the owners who should contact police or take their complaints to state prosecutors.

In Tropical Point

Several years after he lost his property, taxi driver Rodríguez still does not understand exactly what happened.

“I never understood how those people got there and in just two months I already owed them thousands of dollars,” said Rodríguez, who has driven a taxi for 20 years and used part of his savings to buy his apartment. “That was a nightmare and a headache. I tried to defend myself, but I was told that I needed to get a lawyer, go to court, and all of that costs money.”

In 2014, Rodríguez received a call from new owners of several Tropical Point units offering to take his case to court. That same year, in June, Judge José Rodríguez ordered Ortega and the companies that worked with her to return $3,799 to the taxi driver because of overcharges. Since then, the judge has ordered reimbursements for at least two other owners.

“We came here and started to review the accounts, and we found all kinds of abuses, including the case of this taxi driver, who clearly was charged for services that were never provided,” Armando Pérez-Roura Jr. said. His family's enterprise, 1498 Across the Bay, bought several units in the condominium to rent, negotiated a loan to carry out repairs and had the city of Miami remove its lien on the property.

Judge Rodríguez removed Ortega as receiver of Tropical Point in 2013, at the request of the homeowners' association and Ortega herself. Shortly afterward, Ortega sent the association an invoice for more than $48,000, saying the bill was for services provided by two legal firms for work related to the condominium. Tropical Point is refusing to pay the bill.

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The case is now before a circuit court, and has unleashed a torrent of questions about Ortega's work at Tropical Point.

Attorneys for Tropical Point persuaded the judge to order Banco Popular to hand over account records for companies linked to Ortega that worked on the condo, alleging that Ortega was not providing the correct documents related to her work for the complex.

Documents presented by the attorneys to the court showed that more than $61,000 generated by the condo during Ortega's receivership was deposited in an account of APG Partners, LLC. About $11,000 of that money went back to the association. The attorneys claim, however, that the total amount deposited in bank accounts used by Ortega and the companies she hired was well over $115,000. They are asking Judge Rodríguez to order the return of all that money, and to order Ortega to pay all legal fees.

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Testifying in the case on March 2, Cainzos told Judge Rodríguez that he did not create some of the companies that list his name, and that in some cases he was not even aware of the companies' existence.

“Would you say you were just a figure head,” Cainzos was asked by Spencer West, attorney for the current receiver of the Tropical Point condominium, Phillip Mitchell.

“You could say that,” Cainzos answered, adding that an unauthorized electronic signature was used to create the companies.

West asked the court in January 2015 to consolidate before one judge all of the pending cases by owners against Ortega, but his petition was denied.

Judge Butchko, who could not comment on specific cases, told el Nuevo Herald that cases can only be consolidated when they present identical characteristics.

West's petition in fact alleged that Ortega and the companies she worked with had engaged in a pattern of abusive activities in a number of the properties where they worked.

“The entire Receivership team of Ortega, APG, etc. should be enjoined from participating in any further receiverships in Miami-Dade county until further order of this Court to prevent similar instances from occurring,” West said in his petition.

Follow Brenda Medina and Enrique Flor on Twitter: @BrendaMedinar and @EnriqueFlor

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