Residents fight big loan, thousands in monthly fees in condo takeover
Palm Beach Post
By Christine Stapleon
23 October 2015

West Palm Beach—When three members of the Green Terrace Condominiums board — all given condos by Ken Bailynson — were asked during a court hearing in May about Bailynson’s sober housing business, they took the Fifth.

Board members also told the court they did not know the details of the $1.5 million loan they had approved from a lending company created by Bailynson, who ran Good Decisions Sober Living before it was closed after an FBI raid.

The loan from Bailynson’s company carries a 24% interest rate.

When the association could not make its monthly $30,000 loan payment in September, Bailynson foreclosed on 10 condos. The board, controlled by Bailynson cronies, failed to dispute the foreclosure — a decision that would enable Bailynson to quickly take ownership of the units.

How the Bailynson-controlled board spends its money is the target of an investigation by the state Department of Business and Professional Regulation.

In this undated image from video, Ken Bailynson, foreground right, stands in the parking lot at Green Terrace Condominiums.

At stake is whether a controversial former sober home operator will seize control of an 84-unit low-rise condominium complex off Belvedere Road east of Interstate 95 in West Palm Beach.

there is a conspiracy between Ken and the board members to continue to jack up assessments

“It seems clear to me that there is a conspiracy between Ken and the board members to continue to jack up assessments,” said William Pincus, attorney for a group of residents suing Bailynson and the board. “Everything he’s doing reads to me like he’s intending to take over the entire community.”

The rising fees can force residents out of their homes. With few buyers willing to jump in, it’s unlikely the condo owners could sell — to anyone other than Ken Bailynson.

For Angela Ciriello, the $613 assessment now tops $2,000 a month on a condo with a market value of $16,000. When she couldn’t pay, the homeowner’s association slapped a lien on the unit.

“It was crazy,” Ciriello said.

Controlling 75 percent
In March, the board, with Bailynson as treasurer, approved a $1.5 million loan from BOK lending II, a company created by Bailynson in February. The board also considered borrowing an additional $2.5 million to pay for upgrades and repairs at Green Terrace.

The board told owners the complex was in such disrepair that it had racked up more than $300,000 in code violations and did not have windstorm insurance. As collateral, the board put up 18 condominiums owned by the association.
Bailynson owns 38 units. If the board takes over 18 more, he would have control of 56 units.

He needs 63 units, 75 percent of the complex

He needs 63 units, 75 percent of the complex, to have the power to dissolve the association.

“Seventy-five percent allows him to do whatever he wants,” Pincus said. “He would have control and our people would lose their homes.”

Bailynson refused to answer a reporter’s questions for this story. His lawyer, Steve Cohen, also declined to comment.

In March, residents sued. In their lawsuit they asked a judge to block steep increases in fees and assessments, stop the second loan, halt construction and end the use of armed security guards, which costs the association $174,000 a year.

The security company, Black Diamond Security Agency, is not licensed by the state, Department of Agriculture and Consumer Services records show.

Monthly fees for residents had tripled

Monthly fees for residents had tripled, the lawsuit said. Plus residents had to pay an assessment of $5,550 or more. For many, that meant paying more in assessments than their condos are worth, ranging from $17,000 to $40,000.

But at hearings in May, board President Sandra Matus, who lived in a condo Bailynson gave her, said she did not know whether the association had windstorm insurance.

None of the board members — Matus, Matthew Noel and Steven Dockswell — knew the details of the loans from Bailynson’s company.

None presented evidence that the city required all balconies, windows and doors to be replaced to cure code violations. In fact, Palm Beach County Circuit Judge Gregory Keyser found the code violations were not related to structural problems.

But the $1.5 million loan that the residents were struggling to pay off was paying to rebuild those structures.

Residents recorded Bailynson angrily ordering their attorney out of a board meeting. But the judge found that they should have been allowed to vote on some of the renovations.

Fifth Amendment

The board members invoked their Fifth Amendment right against self-incrimination when asked why the condo community needed armed guards. In fact, board members took the Fifth in response to every question about Good Decisions, which the FBI raided in September 2014. Bailynson did not testify.

No criminal charges have been filed in relation to the raid.

The judge issued a temporary order blocking the loan, freezing assessments and stopping new construction. He allowed the armed guards to remain.

In Bailynson’s most recent legal maneuver, his attorney asked the judge to increase the $500 bond residents had to post to cover Bailynson’s potential damages. If it’s granted and they can’t pay it, the judge’s order would be dropped, meaning higher fees, continued construction and a potential second loan.

Bailynson’s lawyers also asked the judge to let them renew fee collections because without fees, the association can’t even pay its water bill.

Meanwhile at Green Terrace, board member Noel has gotten the city’s permission to lease his apartment—the one given to him by Bailynson—to six recovering addicts.


Judge orders condo association to pay water bill despite poverty plea
Palm Beach Post
11 July 2016

The Green Terrace Condominiums on Georgia Avenue near Belvedere Road in West Palm Beach on March 26, 2014. (Richard Graulich / The Palm Beach Post)

West Palm Beach — A judge on Monday ordered the condominium association to pay whatever it takes to keep the water from being shut off at Green Terrace — an 84-unit apartment complex once raided by the FBI in its investigation of South Florida sober homes.

failed to pay a long-overdue $22,000 water bill

The city shut off water to the complex Thursday morning when the board failed to pay a long-overdue $22,000 water bill. The association, embroiled in a bitter lawsuit with residents over finances, told residents there was not enough money to pay the bill.

The city turned the water back on Friday afternoon after learning from The Palm Beach Post that residents had not been warned that they would be without water over the hot July weekend.

voted against using the money to pay its bills

In court Monday, board President Sandra Matus told Circuit Judge Catherine Brunson that the association has only $1,760 in its operating account. The board also has $290,000 in reserves but has voted against using the money to pay its bills.

In September 2014, the FBI raided the complex on Georgia Avenue off Belvedere Road, then the location of Good Decisions Sober Living facility, owned by Ken Bailynson. No charges have been filed. Bailynson shut down the business but continued to buy apartments.

Bailynson wants to take over the complex

William Pincus, attorney for the residents, said the condo board’s vote was stacked. According to Pincus, Bailynson wants to take over the complex and has amassed 44 votes by buying units. Another 13 votes are controlled by the association and several board members who got their apartments from Bailynson.

However, some bills are being paid, including pool service and termite control in Bailynson’s units, Pincus said. The real reason, he said the board doesn’t want to pay the water bill is so members can use the shutoff as leverage to dissolve a year-old legal injunction.

loan, with a 24 percent interest rate

The injunction bars the board from raising assessments, performing construction and borrowing an additional $2.5 million from a company owned by Bailynson. The board already has taken out a $1.5 million loan from Bailynson’s company. That loan, with a 24 percent interest rate, requires the board to make monthly interest payments of $30,000.

She just signs checks when her signature is needed.

Matus said, as president, she did not have details of the association’s finances. She just signs checks when her signature is needed. However, she said she knew that bills that have been paid this year were for services last year and that all accounts are in arrears. The association has been paying the minimum amount necessary to keep the water on, Matus said.

As for the city’s claim that it tried to work out a payment plan to prevent the shutoff last week, Matus denied those discussions occurred. City officials did not return a call for comment.

Matus said she did not know how or when the association would comply with the judge’s order.

“You can’t pay something you don’t have money for,” Matus said.


Green Terrace tenants must move out after water is turned off
Tania Rogers
11 August 2016

Tenant Aura Cortez is getting ready to move. "Packing, looking for a place to go,"  she says.

Cortez can't believe the notice the city of West Palm Beach put on her door of unsafe conditions.

All of the condo's tenants must move out. The city turned off the water on Tuesday. Another resident, Angela Ciriello told us, "I'm going to have to relocate. My whole family will have to relocate."

The issue is over an unpaid water bill totaling nearly $30,000.

Jeff Green, the administrator for the City of West Palm Beach, "The homeowner's association has not paid their water bill and we were put into a position where we had to cut them off. We gave them a number of chances to try to work out a payment plan, and haven't been able to come up with an agreement."

But the association president, Sandra Matus, says there's more to the story.

She did not want to go on camera, but claims a lawsuit from a few condo owners over renovation costs has "put a lock on the association's ability to collect proper funds to run the business.

If the courts injunction is lifted, the water bill would be paid that day."

For tenants like Cortez, it boils down to where they will live now. "We all have to move."

The residents will have to move out by next week.


Judge orders Green Terrace HOA to use reserve funds to pay water bill
By: Alyssa Hyman
15 Augsut 2016

WEST PALM BEACH, Fla-- After going without running water for week, families at the Green Terrace Condominiums in West Palm Beach are finally getting some relief.

The city shut off the water to the complex after the homeowners' association didn’t pay the bill.

This afternoon a Palm Beach County judge ordered the homeowners association  to dip into its reserve accounts to pay a large percentage of the water bill, and the city says when that happens, it will turn the water back on.

It’s been a rough week for Angela Ciriello and her family and many others neighbors at the Green Terrace condos.

“I don’t have anywhere to go,” said Ciriello.

Imagine living with no running water.

The City of West Palm Beach turned off the water to the condominium after the homeowners' association didn't to pay the water bill, even after a judge in July order the association to pay.

The homeowners' association argued it didn't have the money to pay the 30 thousand dollar plus bill, blaming a legal battle over costs for a renovation project.

However, the HOA still has thousands of dollars in two separate reserve accounts.

Monday a Palm Beach County judge ordered the association to pay 19 thousand dollars now and put 60 thousand dollars in reserve to pay future water bills.

The association’s lawyers told WPTV they needed the court’s ruling to use those reserves.

“It’s a special account that requires court authorization,” said Geralyn Passaro, the attorney for the Green Terrace HOA.

While the ruling comes as a huge relief to these families, some like Ciriello are still concerned that this is not the end to their problems.


Receiver appointed to sort out fight over embattled condo complex
Palm Beach Post
By Christine Stapleton
23 September 2016

Residents at Green Terrace Condominiums — embroiled in an 18-month legal battle that has featured hallway shoutfests and water shutoffs — won a major victory this week when the fourth judge to preside over the case decided a receiver should oversee operations at the former sober home complex.

“It’s a tremendous relief for our people,” said attorney William Pincus, who represents a handful of residents who sued the condo association board and former sober home operator Ken Bailynson. “The judge’s order is definitely a home run.”

Bailynson’s attorneys, Stephen Cohen and Frank Colonnelli, did not return calls for comment. They previously had opposed the appointment of a receiver.
The order, signed by Palm Beach County Circuit Judge Cymonie Rowe, gives the receiver power over the complex’s finances, including paying bills, canceling unnecessary expenses and replacing board members. The parties have not yet agreed on who should act as receiver.

The city shut off water to the complex in August but quickly restored service after a judge ordered the condo board to pay $19,860 toward a $36,000 overdue bill.

Bailynson ran his his sober home business, Good Decisions Sober Living, at the complex until Sept. 11, 2014, when the FBI raided the condos off of Belvedere Road as part of Operation Thoroughbred — a task force investigating corruption in South Florida’s drug treatment and housing industry. Bailynson has not been charged with a crime.

However, his presence at the 84-unit complex, where he owns nearly half the units, has remained strong. Bailynson, once the board treasurer, gave units to several employees, who took seats on the association board.

The board approved a $1.5 million loan with a 24 percent interest rate from a company founded by Bailynson. The board also considered a second loan, for $2.5 million. Bailynson continued to buy units, coming close to acquiring enough units to dissolve the association and take over the complex.

In March 2015, a group of residents sued and asked a judge to block steep increases in fees and assessments, stop the second loan, halt construction and end the use of armed guards, which cost the association $174,000 a year.
A judge issued a temporary order blocking the loan, freezing assessments and stopping new construction. He allowed the armed guards to remain.

Attorneys for Bailynson and the board repeatedly attempted — but failed — to get the temporary order lifted. In July, board President Sandra Matus — who was given a unit by Bailynson — said there was not enough money to pay the long-overdue water bill. The city shut off the water.

Pincus argued that the real reason the board didn’t pay the water bill is to use the shutoff as leverage to dissolve the judge’s temporary order.

Pincus expects the case to go to trial. Until then, he said residents can relax, knowing an independent receiver will make decisions on their behalf.

“The association has been at the mercy of Ken Bailynson and his cronies,” Pincus said. “The receiver is the first step — the important thing is that he isn’t going to do whatever Ken Bailynson wants done.”

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