A thirty year old apartment complex was converted to condominium ownership. The condominium developer went bankrupt. The bank took over. The bank went bankrupt. Enter the Resolution Trust Corporation (RTC) and their consultant: DiGeronimo PC
The Condominium Association developed a substantial list of defects in anticipation of RTC reimbursement.
The Condominium Sales Prospectus offered the old apartment units to potential condominium purchasers. This lengthy document contained an Engineering Inspection Report (EIR) identifying certain construction materials approaching life expectancy. One item is described below to provide a descriptive perspective of the work experience DiGeronimo PC offered. The Condominium Association list of defects ran several pages and itemized over 150 separate reported defects.
The EIR identified a railroad tie retaining wall as deteriorating. The Prospectus committed the developer to repair the wall. The Condominium Association listed railroad tie retaining wall repair as one item. DiGeronimo PC’s inspection uncovered the wall failing structurally due to deteriorated materials. Repairing the wall would place RTC at high liability risk since the wall would ultimately fail. To protect RTC liability exposure, the wall needed complete replacement.
DiGeronimo PC’s inspection found work repair invoices for the railroad tie retaining wall signed as accepted and approved by the Condominium Association. DiGeronimo PC argues that the Prospectus committed repair – this repair was completed. Maintenance (i.e. sequential repairs) is a Condominium Association responsibility. RTC final responsibility for the retaining wall was neither repair nor replacement.
The Prospectus promised many items to be repaired. Legitimate promised items never accomplished were valued by DiGeronimo PC. On the basis of DiGeronimo PC’s report, RTC offered a monetary settlement at approximately one-third the Condominium Association proffered amount. The Association said “yes”.