When Carolyn Manchester bought a condominium unit at The Colonies in McLean in 1973, she had no way of knowing that construction of the 13-building development would slide to a muddy halt within two years.
Hit hard by the recession of the early 1970s, The Colonies' developer was released by its financing partner from any further obligation in November 1974, and the contractors pulled out, leaving tools and half-finished buildings behind.
It took five years and a succession of development firms to complete The Colonies, but that wasn't the end of the nightmare. Since the condominium owners took control of the development in 1979, they have had to spend more than $1.5 million to correct problems that the developers left behind, including reroofing all 13 buildings.
But today, after years of worrying over the wisdom of her originial investment, Manchester is glad she stuck it out. Although no one at The Colonies says the problems are over, the development has largely recovered. Selling prices are considerably higher than they were in 1980, the council of co-owners has money in the bank and the homeowners are suing the developers.
"It was depressing at first when we started seeing the problems: the leaky roofs, wet basements, and lack of insulation in the garages," said Manchester. "But the concept of The Colonies a garden apartment with landscaped grounds close to Tysons Corner was good. It gradually dawned on the homeowners that they had a great investment, one that was so good that, if they spent the money on improvements, it could be competitive with other McLean real estate."
In the relatively good condominium market of 1980, a 3-bedroom unit at The Colonies sold for $89,500. Today, despite the depressed market, the same unit sells for $101,000.
But it took money and hard work to get there. When the development finally was finished in 1979 and the homeowners were given control, they were aware that the roofs and basements leaked and that the first-floor apartments over the underground garages were too cold to live in during the winter. What they didn't know was that the roofs were designed with flat tops surrounded by flashing, creating a lake atop each building. They didn't know they eventually would have to repair roads, replace sidewalks, insulate the garages, re-landscape grounds to keep water from running into the basements, and do something with a man-made brook that didn't hold water. "It cost us $100,000 just to find out what was wrong," said Robert S. Folsom, president of the council of co-owners. "Then it cost more than $1 million to cure those problems. And we're not finished yet."
One of the biggest hurdles was convincing the homeowners to support a special assessment of $1,840 a unit to pay for the repairs. A first vote failed roundly, and a number of the homeowners actively campaigned against the proposal.
"There were a lot of frustrating moments," said Edward M. Lightfoot, the first president of the condominium. "But we finally learned something about community relations and got people involved and feeling responsible." A second vote passed by 71 percent.
A second assessment and a rise in the condominium fee to cover the cost of litigation against the developers increased the contribution of each homeowner to $2,600. But Folsom, who has been president through three elections while fighting for the improvements, said that most of the residents feel it is money well spent.
Although The Colonies started out as a frustrating up-hill battle for many of its homeowners, the experience has forced the council of co-owners to become as tough and sophisticated as the problems it faced.
After a few years of what Lightfoot characterized as incompetent management from a series of local management companies, the council voted to set up its own management firm. Today delinquencies on association fees and assessments are down from 12 percent to 4 percent. Credit with utilities and suppliers, which was suspended a number of times, has been restored.
After finding that many of the law firms with condominium expertise in Northern Virginia also represented condominium developers, the council set up a committee to interview lawyers nationwide to find a firm that knew how to represent condominium owners. They retained Hyatt & Rhoads of Atlanta in 1980, and filed for actual and punitive damages against the developers.
Defendents in the case were L. B. Nelson Corp. of California, the original developer; Continental Illinois Corp.; and Lyon Realty Corp. Lyon Realty settled out of court last year for $150,000 and agreed to supply documents, witnesses and testimony. Then a Virginia district court judge ruled that L. B. Nelson was not liable because the statute of limitations had run out and that Continental Illinois would have to be sued in Chicago.
The court also ruled that the developers had made an honest effort to repair the problems, that the individual homeowners should have sued the developers when they first knew of the problems, and that the council of co-owners had released L. B. Nelson and Continental Illinois from their responsibilities in the case when they signed a release with Development Management Corp., the company that finished the development and sold off the remaining units in 1978.
But the council is encouraged that it can appeal the decision on L. B. Nelson successfully, and it is going ahead with the suit against Continental Illinois in Chicago.
Representatives from both Continental Illinois and L. B. Nelson said they believe the judge's ruling was appropriate, and they had no comment about the appeal. Representatives from Lyon Realty could not be reached for comment.