Condo Coup: Management, Homeowners Board Quit

In a jarring contrast to the tranquil quilt of planned developments across South County, a homeowners’ rebellion at a condominium complex has prompted the entire homeowners association board to resign and a management company to quit its contract.

Dissatisfied property owners at Crystal Cay, a 303-unit development on Street of the Golden Lantern, had circulated petitions to recall the board, protesting the purported harsh enforcement of rules, unresponsive management and neglected maintenance.

“It’s absolutely appalling,” said Betty Bell, who has lived in Crystal Cay for 2 1/2 years. “I’ve never encountered the hostility at any other board that I’ve encountered here.”

A spokeswoman for Merit Property Management Inc., which has run the maintenance and business affairs of Crystal Cay, said the company is terminating its contract effective April 1 because its employees were threatened by “a handful” of dissident homeowners. The Mission Viejo company is among the largest property management companies in California and has contracts with more than 100 developments.

“As a company, [Merit] couldn’t allow their employees to be subjected to verbal or physical abuse,” said Leslie Martin, the spokeswoman.

Homeowners deny the allegations.

Some residents said they have suffered “general harassment” by harsh enforcement of association rules and have been rebuffed in trying to complain about maintenance problems.

Among the claims by homeowners:

* One temporary housemate received 24 citations in three months for displaying a guest parking pass in an incorrect manner.

* An elderly woman was admonished by board members for speaking to a gardener employed by the management company.

* A man got in trouble for keeping a pickup truck too long in a parking place.

* Other homeowners complained of inattention to leaky roofs and defective doors, flawed patios, decks and sidewalks at the complex built in the mid-1980s.

“Once they get you in their sights, they don’t let up,” complained homeowner Tim Sebestyen, who said he once received three rules violations notices in a single day, one of them for a surf board that protruded three inches beyond a storage compartment.

Martin said the management company takes its cue on the level of enforcement from the association board and denies that enforcement was excessive.

Donald Meindertsma, the former president of the five-member association board, declined to comment. Another former board member, Marilyn Harris, also refused to be interviewed, saying, “I don’t know of anybody who would want to discuss it.” Richard Neuland, the board’s Irvine attorney, was not available for comment.

Experts say such disputes are becoming more common as new complexes in Orange County and Southern California are built as “common interest developments” that feature shared grounds, walls, parking and recreational amenities. There are an estimated 30,000 homeowners associations across the state, including about 3,000 in Orange County.

But rarely do homeowners undertake a recall campaign as did property owners at Crystal Cay.

“You wouldn’t put your money in a bank that’s unregulated, but people think it’s normal to put millions of dollars in unregulated management companies that function with no oversight whatever,” said Laguna Hills attorney Melvin D. Thomas, who represents property owners in disputes with association boards and management companies.

Homeowners associations sometimes fail to act in the best interest of property owners, said Ellen Ellish, executive director of the Orange County chapter of Community Associations Institute, which represents management companies, attorneys, accountants and others involved with homeowners associations.

“Sometimes you do have a renegade board, and the common-sense folk in the neighborhood have to take action,” Ellish said.

At Crystal Cay, Merit Property Management officials said the problems began when two property owners, who spokeswoman Martin said were members of the “dissident” group, were cited for violations and took issue.

Homeowners said violation notices were issued in retaliation for complaints and questions about the finances of Merit Property Management, which they said was charging higher management fees than other condominium associations were paying.

Martin said Merit’s fees were competitive, but the homeowners said they launched the recall drive after the former board rebuffed suggestions to replace Merit Property Management. There were 93 signatures calling for installation of a new board.

At an association meeting Feb. 24, about 50 property owners were greeted by two security guards who asked each one to sign a sheet. William Daly, a property owner, said a guard grasped his arm and warned he would be removed from the room if he didn’t sign the sheet.

At that meeting, board member Barry Heatherley resigned, saying he thought the remainder of the board was hostile to homeowner interests and that “the winds of change were blowing and they’re growing stronger.”

That night, the other four members of the board also quit, but did not announce the decision in front of residents. Before resigning, they appointed an interim association board, and the identities of the new board members were not divulged for a week.

“We have a new board, which was installed by the old board without the input or representation of the homeowners at large,” said Robert Mandrioli, who owns a unit occupied by his mother. “There are 303 homeowners who were not given notice of board vacancies or an opportunity to nominate anyone.”

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Robert Ourlian can be reached at (714) 248-2150, or by e-mail at robert.ourlian@latimes.com