Animosity, dissension and namecalling have moved into Washington's Carriage House condominium, the companions of a bitter power struggle that has erupted among homeowners and the large number of absentee owners who rent out the apartments they purchased in the building.
Carriage House, 2201 L St. NW., is the site of the city's first confrontation between resident and absentee condominium owners. Many observers say it will be only the first of many similar disputes in buildings around the city as owners attempt to govern and maintain these largely vertical communities born out of the city's condo boom, which created more than 14,851 new and converted condominiums in the District of Columbia.
"Next to pets, the problem of renters vs. owners is the most significant problem that divides condominium owners," says Benny Kass, a Washington attorney who specializes in condominium law and represents the board that is under siege.
The battle lines at the Carriage House formed in December after the building's governing board, which is dominated by owners who actually live in the condominium, imposed a monthly $15 fee on absentee owners. The absentee owners then mobilized, petitioned for a recall, or formal ouster, of the three-month-old board and nominated their own board dominated by nonresident owners. A vote is set for April 15.
Although the so-called "lease service fee" triggered the Carriage House clash, the fight really revolves around the upkeep and future costs of maintaing the building, the threat that units in the building cannot be easily sold because o the large number of renter-occupied apartments and whether a condominium is primarily a building of homeowners or real estate investors looking for extra income and tax shelters.
At the Carriage House, the fight also pits residents against the condo developer, who owns 10 percent of the units and thus can influence who sits on the condo board -- which will decide whether to pursue possible warranty claims against him.
Resident owners say since the buildings are their homes that they are more motivated than tenants to pick up trash in the hallway, save on utility bills that are equally divided among residents and, in general, keep up the building. Federal agencies that buy home mortgages agree and require that 80 percent of the units in a condominium will be owner, occupied before they will purchase the mortgage from a bank or savings and loan.
The majority of the 169 Carriage House units, 55 percent, belong to nonresidents while the remaining 45 percent belong to owners who live in the building. Because the 10-story, beige brick building is located within walking distance of George Washington University, the State Department and Dupont Circle and is composed mostly of efficiencies and one-bedroom apartments, it attracted investors.
Carriage House resident owners read the condominium documents that stated there were no "present plans" to use any of the units for rental, but paid little attention to the sentence saying that the developers could rent any unsold units, if they wished. They did.
"The unfairness is that it was not made clear to us that there would be so many investor owners and they would in effect run the building," says David E. Short, president of the building's resident-dominated board of directors.
"We got to the point where the apartments were not selling and it was expensive to keep carrying them," says former White House attorney Myer Feldman, explaining why he and his partner, Stanley Westreich, bought units after they had purchased and converted Carriage House from apartments to condominiums in April 1978. Peter Burr, Charles E. Pardoe and William R. Morris Jr., the owners of the real estate firm of Burr, Morris and Pardoe, which was hired to seel the Carriage House, also bought units.
At one point, the building's codeveloper Feldman, Westreich and the real estate company owned 38, or 22 percent of the building's units. Westreich has sold his units, although his ex-wife Thea still owns four, and Burr, Morris and Pardoe also have sold some of their units, but still own four. Altogether, they own 26 units with various other people owning the remaining nonresident units.
Of the 26 units, Feldman, his wife and their two children own 18, percent of the units, the largest[TEXT OMITTED FROM SOURCE] block. Feldman, who has refused to pay the $15 lease fee, had his lawyers challenge its legality and according to some resident owners has led the fight to unseat the board, a charge that Feldman denies, although his lawyer drew up the legal documents to oust the present board.
Board president Short and Ralph Rosenbaum, also a resident board member, say control of the building by absentee owners would lead to sloppy maintenance and sluggish pursuit of warranty claims against Feldman, codeveloper and now absentee owner, for alleged poor construction in the building that they estimate could cost up to $118,000 to correct. Four of the five nominees to the board are nonresident owners and one of them is a vice president with the real estate firm sold the building for Feldman and his partner.
The absentee owners say the lease service fee is discriminatory. They say their concern for the building equals that of resident owners and that fears that the warrant claims could go unpursued are unfounded.
The present board says the new fee is needed to pay the extra costs incurred with large numbers of tenants such as higher utility bills, postage and handling for notices and newsletters that must be mailed to nonresident owners, cost of duplicating materials for both the tenant and owner and charges by the building's management company to review all leases to insure they comply with the condominium's by-laws and U.S. and state laws.
Fred Jacob, a General Electric attorney whose relatives own a Carriage House unit, is a leader in the fight to wrest control from resident owners.
In an eight-page newsletter sent to building owners two weeks ago, Jacob called on all owners to "restore sanity and a sense of responsibility" to the management of the building, to withhold payment of the fee and to vote for a new board to replace "the store front activism we have seen."
"It's a power struggle," says Raymond P. Cahill, a nominee for the new board and an absentee owner. "That's really what it amounts to."