Residents Win Court Battle : Oceanside Condos Are Placed in Receivership

Jubilant Oceanside condominium owners celebrated a major court victory Friday outside the courtroom of a Superior Court judge after he slapped strict controls on managers of their posh, seaside 550-unit development.

Judge Lawrence Kapiloff, responding to homeowners’ complaints about the operation of the complex and the use of their fees, placed the North Coast Village condominium development in receivership, ordered that the financial records of the stock cooperative be made available to attorneys for the homeowners and warned Ashley T. Murphy, who controls 180 of the units, that if he did not cooperate fully, “he’s going to be a guest in Mr. (Sheriff John) Duffy’s hotel.”

About 20 North Coast Village residents attending the hearing Friday were addressed directly by Kapiloff, who offered his sympathy for their plight as pawns “right in the middle of this high-finance power struggle.”

The judge also placed a restraining order on several firms controlled by Murphy and on the financier himself, prohibiting any financial transactions involving North Coast Village without approval of a court-appointed receiver.

Attorneys for Murphy argued unsuccessfully for a delay in imposing the receivership, saying that the action would cause the Federal National Mortgage Assn. to withdraw from arrangements allowing the condo owners to refinance their high-interest mortgages at today’s lower interest rates.

Kapiloff said he doubted that the federally supervised mortgage agency would participate in refinancing the North Coast Village units. “After they find out about the way things are out there, I don’t think the FNMA would touch this with a 1,000-foot pole,” he said.

Individual condominium owners banded together about four years ago to try to wrest control of the NCV Homeowners Assn. from Murphy, who is association president. Murphy also controls the firm that manages the entire complex and one that leases, buys and sells the units.

The group charged that Murphy failed to pay nearly $1 million in homeowner assessments on his 180 units until recently, and that $2 million in homeowners’ funds collected over the last few years is “missing” and can’t be accounted for.

One condo owner said that the dissident tenants managed to get one member elected to the association board in 1984 in an attempt to find out “what was going on and where our (assessment) money was going,” but the Murphy-controlled homeowners’ board ceased to hold meetings after the dissident director was elected.

Two weeks ago, the City of Oceanside threatened to shut off water to the entire complex because the association was about $75,000 in arrears on its water bills. A payment was made less than an hour before the deadline, and water, sewer and garbage pickup services were continued.

Robert Scherer, attorney for the dissident condo owners, commented after the hearing that “we got everything that we have been fighting for”--a homeowners’ association election, the right to look at the financial records of the various companies and a receiver to put the condominium complex affairs in order.

The election will be held next week to select a new board of directors at North Coast Village and will be conducted under the eye of a court-appointed official, who will supervise the voting and count the ballots.

The condo residents fighting Murphy said that they seek a voice in the management of North Coast Village affairs and the right to participate in decisions involving its finances.

An attorney for the Murphy interests warned that the costs of two court-appointed officials ordered by Kapiloff to supervise North Coast Village affairs threatens to make the complex’s financial woes worse.