CARRBORO - A Collins Crossing resident has sued the majority owners of the complex, claiming the company is abusing its authority and that its actions could force low-income owner occupiers into foreclose.
Wendy M. Dale filed suit Dec. 26 against Alcurt Carrboro LLC, Aspen Square Management and Old Well Owners Association.
Alcurt Carrboro owns 77 percent of all the units in Collins Crossing, formerly named Abbey Court and before that Old Well, which is also the name of the homeowners association.
Aspen Square Management, which operates the condominiums, purchased the units in June for $7.1 million from Tar Heel Companies.
Collins Crossing is one of the last affordable housing complexes in the area, with two-bedroom units starting at around $500.
Management recently announced plans to raise the rent. The website lists two-bedroom units starting at $740 and three-bedrooms for $960.
Alcurt Realty Group, the managing member of Alcurt Carrboro, and Nespa Operating Group, the parent company of Aspen Square Management, are also defendants in the lawsuit.
Dale, who owns a two-bedroom condominium, declined to comment.
Brenda Wishart, spokeswoman for Aspen Square Management, said the company did not want to comment on the lawsuit.Assessment fee
The lawsuit claims Old Well Owners Association breached its fiduciary duty, or the legal obligation to act in another party’s best interests, by imposing a $5,406 assessment fee on all individual unit owners “that is unreasonable, unnecessary and unprecedented in the history of the Condominium.”
The lawsuit states Old Well passed the assessment fee “in bad faith” and “primarily for the advantage of Alcurt and Aspen rather than the benefit of the Old Well membership.”
Old Well held an official meeting to vote on the assessment fee in December 2012, and Jeffrey Strole, vice president of Aspen Square Management and president of the Old Well, attended.
But, as the lawsuit states, the assessment would have passed without votes from any other unit owner besides Alcurt since the company owns more than two-thirds of all the units.
As the majority owner, Alcurt replaced all members of the Old Well Board of Directors when it purchased the units, the lawsuit states.
Since the board is elected by a simple majority of the unit owners’ vote and each owner is allowed one vote per unit owned, Alcurt could elect members of the board without violating the bylaws of the Old Well.
According to the bylaws, the board of directors can collect assessment fees for common expenses and manage improvements to the complex’s common areas.
Mayor Mark Chilton said the new board members do not meet the qualifications listed in the bylaws, which states board members must be residents of North Carolina.
Chilton said the board is unqualified to pass an assessment fee because Strole isn’t a N.C. resident.
“None of this has to be like this,” Chilton said. “There could have been, and could still be, an atmosphere of collaboration on improving the property.”Contested repairs
The lawsuit also claims Old Well breached the terms of its bylaws by collecting an assessment fee for the costs of repairs that are not Old Well’s responsibility and providing a payment timeline inconsistent with the bylaws.
Old Well allotted nearly $500,000 for window replacement, according to documents handed out at the December 2012 meeting.
But an amendment to the bylaws says replacement of windows, window panes and window screens is the responsibility of unit owners, not Old Well.
Some unit owners at the meeting protested the assessment fee and requested payment installments required under the bylaws, the lawsuit says.
According to the lawsuit, the board ignored these requests and set a deadline for the end of February.
Joseph Williams, who owns three units at Collins Crossing, said he brought the window amendment to Strole’s attention at the meeting but the assessment still passed.
“I asked Jeffrey Strole what would happen if (owner-occupiers) couldn’t pay,” Williams said. “He said they would be foreclosed on.”Condemned Stairs
Though the town recently condemned the staircases in all but one building in Collins Crossing, only $90,000 was allocated for stairway repairs.
The stairs at Collins Crossing came under the town’s scrutiny after a 10-year-old boy was injured from falling through a broken stair tread in November 2012.
Code enforcement supervisor Mike Canova said Alcurt obtained all the necessary work permits to complete the stair repairs, which must be done by March 4.
Former Alderman Dan Coleman has suggested the town take over Collins Crossing by eminent domain, which lets governments claim private property.
Alderman Sammy Slade and Alderwomen Lydia Lavelle and Michelle Johnson supported the idea, but Chilton said the town is a long way off from taking such action.
“It’s an interesting concept, but you would have to have a really compelling reason and we haven’t had that yet.”