Two big victories for condominium owners

Dave Brooks

Condo owners embroiled in costly legal battles scored two victories

this week, one with title companies involved and one in court.

The city reached settlement agreements Wednesday with the five

title companies that hold policies for Huntington Beach condominium

owners who found out in April that their homes were converted from

apartments without the proper permits.

Stewart Title, First American Title, Fidelity Title, Land

America/Commonwealth Title and United Title agreed to pay $10,000 in

application and affordable housing fees to the city on behalf of the

insured condominium unit owners.

If a condo owner does not have title insurance, the $10,000 will

be levied as a lien against the property if the owner wishes. The

third option for any condo owner not interested in taking part in the

agreement, is to pay a $17,900 fee to the city to clear up their

title.

“That’s really positive news,” said Aaron Frankel, who is one of

the condo owners who led the charge on the getting the city to drop

the conversion fees. “It’s an absolute relief for me. Now I wonder if

there is any other hidden fees or anything else we’re going to have

to deal with.”

The $17,900 fee was to help increase the city’s affordable housing

stock that city officials say was lost by the conversions.

“This settlement agreement permits an expedited entitlement

agreement between the title companies, who are going to pay the

affordable housing fee and the application fees, [and the city],”

City Atty. Jennifer McGrath said.

One of the condo owners also scored a legal victory in court on

Monday when a judge ordered a local realtor to pay her $450,000 for

selling her a condominium that had been converted from an apartment

without the proper permits

Court records show that an Orange County Superior Court Judge has

awarded homeowner Renee Tarnow $450,000 in her lawsuit against

realtor Phil Benson, which included subpoenaed testimony from

recently resigned Huntington Beach City Councilwoman Pam Houchen.

Benson, who currently lives in Idaho where he is receiving

treatment for cancer, lost the case because he failed to appear in

court to mount a defense. Houchen, who is under investigation by the

FBI and the U.S. Attorney’s office for her role in selling, didn’t

offer much either, taking the Fifth Amendment on all questions.

The case could be significant for more than 100 other residents in

the same situation. Both victories offer hope to many who rue the day

they bought a condo in Huntington Beach.

“The reason for the affordable housing fee is two-fold,”

Councilman Dave Sullivan said. “First it establishes a way for the

city to recover affordable housing that has been taken out of

circulation. It’s also a mechanism to make the properties legal

without an onerous process that wouldn’t necessarily be successful.”

Tarnow’s victory shows that the courts are willing to find

realtors liable for the fraudulent sales, McGrath said.

The city can’t go directly after the realtors to collect damages,

but the court shows the condo owners can, McGrath said. “I was very

pleased that Ms. Tarnow was able to get the success that she did,”

McGrath said.

* DAVE BROOKS covers City Hall. He can be reached at (714)

965-7173 or by e-mail at [email protected].