Nearly a dozen condo owners in downtown Hartford’s Bushnell on the Park have filed suit against the property’s majority owners, who are facing foreclosure, alleging they have violated state condo laws.
A key concern is whether Bushnell Regency, the company that owns 129 condominium units within the 180-unit complex at 100 Wells St., has been paying its fees owed to the Bushnell on the Park Condominium Association.
The suit alleges that the principals of Bushnell Regency, including Michael Jaffe, have repeatedly refused to provide financial records to association members, and failed to collect dues or make necessary repairs to the building.
The individual condo owners want a receiver to take temporary control of the association so they can get a true assessment of its financial health, the complaint said.
Bushnell Regency did not return a call seeking comment.
“We are seeking to bring accountability to the association,” said Avon lawyer Jonathan Starble, who is representing the individual condo owners in the suit. “It’s an extraordinary situation that requires extraordinary measures.”
The case is symbolic of a growing problem in Connecticut.
Attorney General Richard Blumenthal announced last month his office has received hundreds of grievances from condo owners over the past year involving disputes with condo associations.
In response, he’s urged state lawmakers to establish a condominium ombudsman, to deal with owners’ complaints concerning possible violations of state condo laws.
Blumenthal said many of the complaints received by his office “concern failures by association boards of directors to follow basic governance principles such as adopting an annual budget with notice to the unit owners, holding fair elections for the board of directors, providing key financial information about the association, and fairly imposing association fines.”
In November, a Hartford judge ordered the 129 condominium units owned by Bushnell Regency into strict foreclosure, a type of legal action taken against delinquent borrowers’ whose debt is greater than the value of their property, court documents show. Some of the units have been rented as apartments and others are being used as office space.
Bushnell Regency has until March 25 to pay Wells Fargo Co. $9.8 million in order to reclaim the property, or they risk losing control of it, Starble said.
The individual owners intervened in the foreclosure case earlier this year, citing concerns that their financial interests were not being “adequately” represented by Bushnell Regency. But the lawsuit filed March 12 adds a new twist in the case, and is separate from the pending foreclosure action, Starble said.
In the court documents, condo owners say they have been unable to ascertain whether Bushnell Regency, which controls the condo association, has paid condo fees for its 129 units. Additionally, the condo owners, whose properties are not part of the foreclosure, maintain that they have not been given access to the association’s financial records, as is required by law, court papers said.
According to the complaint, Bushnell Regency’s counsel showed Feb. 9 that it was three months delinquent on its association dues, but there was no supporting documentation.
Starble said a receiver would become an arm of the court and have the authority to take possession of the association’s accounts and records. The receiver would then report on the association’s finances and make recommendations regarding its ongoing operation.
The individual owners are also seeking to recover monetary damages, punitive damages, and attorneys’ fees.
A hearing on the appointment of a receiver is scheduled for April 12.
The Bushnell on the Park property, constructed in 1978, was once owned by the scandal-plagued Colonial Realty, but in the wake of that company’s collapse in the early 1990s, it was sold to Aspen Real Estate for $2.2 million. In 2002, Bushnell Regency bought the property for $15.6 million, and took out a $12.7 million mortgage, city records show.
For his part, Blumenthal is urging creation of a self-funded state commission to be paid for by a $4 per unit annual assessment on condominium associations in the state. There are approximately 240,000 condominium units in Connecticut so the $4 charge will yield $960,000.
The office would be responsible for reviewing condominium unit owner complaints concerning violations of state condominium laws by the association’s officers.
The proposal would allow the ombudsman to review complaints, hold a hearing and issue orders to resolve problems, and gives the attorney general the right to impose a civil penalty of up to $200 per violation.