Three Southwest condo associations are suing several development investors, including former condo-converter Clark Gassen, for not providing adequate reserves for maintenance and repairs at projects they completed.
The groups — 3252 Fremont Association, the Lowry Hill Park Condominium Association and the Ridgewood Condominium Association — also allege that known construction defects were not disclosed and association fees were not communicated truthfully. The associations represent more than 40 units converted from apartments to condos.
Condo development and conversion was a booming business several years ago and many developers took part in it.
"I think we’re looking now at the fallout of that," said Schaefer Law Firm attorney Larry Schaefer, one of several attorneys representing the condo associations. "The fact that it was done with a lot of haste in an effort to get these condos converted and sold, and a lot of legal requirements were just overlooked in that process."
Gassen, who became a controversial figure converting hundreds of apartments to condos in Southwest, is being sued along with several former business partners and divisions of his former Uptown-based brokerage company, Financial Freedom Realty. Gassen denied the condo associations’ allegations and said he and the other investors were prepared to defend themselves.
"We believe what we did was appropriate," Gassen said.
The associations are asking for more than $50,000, according to the complaint, but Schaefer said, "It’s well in excess of that."
State law requires the budgets of homeowner associations to have "adequate reserve funds" to cover the replacement of parts that affect all occupants, such as boilers and roofs — two items one association president, who didn’t want to be named, said need attention. That condo owner said developers did not leave her association the funding needed to make the repairs and her group has increased its dues in an attempt to get the work done.
Gassen said he stood by his work and would make repairs if necessary.
"What these homeowners need to understand is they bought used buildings and if there are any issues with construction in the units, we’ll fix them," he said.
Schaefer said the buildings’ older construction is exactly why reserves are needed.
"A lot of times with these older buildings there are going to be things that come up like that and that’s why these reserves have to be established for condos converted and they weren’t," he said.
Schaefer said he and the other attorneys involved have advised other condo associations about reserve issues and he expects more lawsuits will follow.
Reach Jake Weyer at 436-4367 or email@example.com.