Property Management Firm Accused Of Repeatedly Overbilling Condo Associations
CHICAGO (CBS) -- One of the biggest complaints among condo owners is the monthly assessments.
Ever wonder why you're always being asked to pay more? CBS 2 Investigator Dorothy Tucker uncovers one condo association's budget battle with a management company, leaving them penniless.
The Drexel Condo Association at 41st and Drexel is facing several major repairs – including leaking ceilings, broken deicing cables, and malfunctioning intercoms – but the association is broke, and blames Phoenix Rising Management.
"They have left us bankrupt," Drexel Condo Association President Natasha Neptune said. "It's been very frustrating."
In a complaint filed with the Better Business Bureau, Neptune has accused Phoenix of committing fraud when it "created an expense," and took $15,792.92 from one of the association's accounts.
The management company denied that, but in an email admitted it did overcharge for insurance from a second account.
"We incorrectly processed excess premiums of $8,181.76" the company wrote.
"It's just a lot of discrepancies," Neptune said.
Neptune also filed a complaint with the Illinois Department of Financial Professional Regulation, and terminated the association's contract with Phoenix.
That's when Phoenix charged $400 an hour to transfer documents to the association's new management company, and answer questions from the state. The bill added up to a whopping $12,000.
"So they kept the $8,000 and said 'Now you guys have to pay us back $4,000,'" Neptune said.
Attorney Ebony Lucas said Phoenix is "violating the trust of the people who they're supposed to be representing."
Lucas sued Phoenix Rising on behalf of the 4600 Indiana Condo Association for overcharges. She said they repeatedly billed the association $30 for simply sending emails.
Phoenix settled that claim for $12,000.
CBS 2 also found six complaints filed with the Illinois Attorney General's office in the last three years.
"It's possible the wrong invoice hits the wrong box," Phoenix CEO Mike Kennelly said. "That's why I would offer, if Drexel really feels that way, then I'm glad to meet with them for the purpose of coming to a resolution."
Unless or until there is a resolution, 16 condo owners must split the cost of needed repairs.
"It's at minimum $25,000 that we would need right away," Neptune said.
Until the state establishes a database, condo associations are advised to search for lawsuits, and check with the attorney general's office before signing a contract with a management company.