Dr. Starr interviews Jan Bergemann – President of Cyber Citizens for Justice (CCFJ.Net) – on striking differences between the European and US condo systems.
According to Bergemann, European countries do not have condo associations, condo boards or condo strife. He contends that the US condo association system is just another form of communism.
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Starr: I want to speak with you today about the differences between the European and American condo systems.
Jan Bergemann: There are huge differences, because in Europe you don’t have associations. The membership is in charge of voting and making decisions. There is no board, no attorney. There is a manager who gets paid. He will send out notices to the members about repairs, contracts, bidding etc. I have owned condos in Germany since the mid-1970s, and there has never been a lawsuit in the building. This is the downfall of the American system. We now see – especially in the bad economy and real estate market – the real problems of these condos. The board members are not informed enough to make decision, so they rely on people whose have only one thing in mind – making money. You can’t blame the service providers. That’s their job. But it doesn’t help owners. The system is causing owners who paid all of their bills to lose their homes, because neighbors didn’t pay and boards made bad, bad decisions and wasted their money. There is no oversight. The Florida DBPR, for example, doesn’t do much. These boards do things that no normal person would do. And suddenly the entire association is in a deep whole and nobody can do anything about it. That is not possible in the Europe system.
Starr: How did the “condo owner” system evolve in Europe and how is it different than our own?
Bergemann: In Europe, every owner owns a share. Let’s say there are 100,000 shares. One owns 6,000 or 7,000 depending on the size. They all have a right to vote. It’s not like here where a small group of owners make decisions. That is not possible. That is one of the reasons why we see so many lawsuits. You see associations paying for everything from water to television, you name it. If one doesn’t pay, then the other neighbor has to pay for him/her. It makes no sense. It’s a communist system. In Europe, every owner has his own water meter, connection to the television. But if he doesn’t pay, you don’t lose your water or television. If the neighbor doesn’t pay, you feel sorry for the neighbor, because he’s in a financial bind. But it doesn’t mean your water or television will be cut off. The United States fought communism for so many decades, but we use a communist system for these Associations.
Starr: But how did community associations evolve? Why/when were they created?
Bergemann: It began with racial issues as is usual in this country. Some people didn’t want others to move into their community. But then a smart group of attorneys and other service advisors, with the help of HUD, established the Community Association Institute (CAI). The CAI was suppose to represent the interests of people living in these communities, but attorneys and corporations soon took over. HUD finances the CAI which clearly represents the interests of the service providers and is detrimental to the owners. Everybody is complaining that the banks don’t pay their shares. The attorneys are publicly outspoken that this has to change. But banks are members of the CAI, and not so long ago they were sitting together in committee meetings in Tallahassee.
Starr: So who are the bad guys?
Bergemann: The bad guys are the people who are forcing a system on the owners that doesn’t work, a system that is only made for profit of the providers. I’m not sure that the attorneys are serious about blaming the bankers. Allies are allies. The attorneys haven’t kept the bankers out of the CAI.
Starr: You mentioned that the CAI tried to bring this system to Europe, but the Europeans through them out.
Bergemann: There was a conference in Frankfurt. After the CAI presentation – showing how the system could be brought to Europe, one of the German legislators said, ‘Thank you very much. You’ve made a very nice presenation. But we had Adolph here. And we don’t need another Adolph. And this system is poised to be dictatorial.’ Even the best association is only one election away from dictatorship. I’ve seen people move out of an association because of problems, move into another where they check first to determine if everything is fine, yet soon find themselves embroiled in another set of problems.
Starr: Why do they neighbors seem to get along so much better in Europe and countries like Israel?
Bergemann: It’s very easy to explain. You give a small group of people called the board, with more or less unlimited powers but without proper oversight. They have the right to use Association money – meaning the money of their neighbors – to file lawsuits to defend their own violations. If you decide to sue the board, you’re suing yourself.
Starr: We typically blame US condo battles on human nature. Why are Europeans seemingly immune from such battles?
Bergemann: Europeans are much more willing to accept the life style of their neighbors without mingling in their lives. The biggest problem is that one group is trying to tell another group what they can do. Tell a European that he can’t rent his apartment or can’t have a cat. He would look at you like a deer in the headlight. An association is fining people for closing their hurricane shutters if they go away for a week or a short vacation. Try that in Europe. A neighbor fining a neighbor? It would be unthinkable in Europe. Here you give them the power and the money to enforce it. You would think that now that we have a bad economy, things would change. But you would be shocked at how many law suits are filed every day. The shingles on your roof are not allowed to be that particular shade of green. The frivolous lawsuits that are filed in America that would never happen in Europe. Board members are indemnified in the United States. They can do anything they want. It’s been proven in numerous cases that board members embezzled money, but nobody wants to prosecute them. The state attorney claims it’s a matter of contract law. But if someone steals money, it’s a crime. Here board members use association money to defend their own wrongs. Or they use Association money to persecute an owner because his flowers are too red. We had such a case that cost the owner over $130,000 in legal fees. The flowers died after a few months, but the legal battle went on for years.
Starr: Why was the owner willing to continue that battle?
Bergemann: Because he was a retired colonel who said the buck stops here.
To your condo owner rights!