Tuesday, May 21, 2002

Erpenbeck strands condo associations


Developer walked away owing thousands

By James McNair jmcnair@enquirer.com
The Cincinnati Enquirer

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Paul Doe of the Oakwood Lakes condo association, with decaying building materials that litter the unfinished complex.
(Glenn Hartong photos)
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        MASON — From its gated entrance on Western Row Road, Oakwood Lakes could be a postcard for condo life in the country.

        Anchored by a clubhouse and swimming pool, the 61-unit development hugs gentle, landscaped slopes around a lake with two fountains. What used to be farmland five years ago is now a residential getaway surrounded by woods.

        “People like it here,” said Paul Doe, who moved into Oakwood Lakes in May 2000 with his wife, Ellen. “It's an attractive community.”

        Until you look at the far side of the lake, at least. There, stacks of wood frame assemblies and other building materials line the banks, weathered gray and unusable. The owner, the Erpenbeck Co., abandoned the materials when financial problems idled Oakwood Lakes and numerous other projects across Greater Cincinnati.

        But as homeowners in many Erpenbeck developments have already found out, the company's collapse dropped homeowner associations into a financial sinkhole. Debts have mounted, maintenance services have become irregular, and, perhaps worst of all, reserves for future capital needs have been depleted. The associations have raised fees just to keep lawns cut and street lights on.

STORY ARCHIVE
Click here for all Enquirer reports on Erpenbeck Co.
INVESTIGATION
If you have any additional information on the business dealings of the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or on the involvement of any parties not yet identified in our coverage - please email Enquirer business reporter James McNair at jmcnair@enquirer.com or Kentucky Enquirer reporter Patrick Crowley at pcrowley@enquirer.com.
        Association members have struggled with association bylaws, mechanic's lien laws and foreclosure proceedings. They have hired lawyers and are conducting neighborhood meetings to keep homeowners abreast of their options.

        Owners in Erpenbeck's Grand Cypress project, a condo enclave in the Legendary Run development in Pierce Township, elected a special finance committee last month to oversee spending for an association that hadn't even formed. A year-overdue insurance premium was paid, but Erpenbeck's failure to contribute more than $25,000 left the association critically underfunded.

        At Oakwood Lakes, Erpenbeck owes about $73,500 in association contributions from 2001 and is $14,000 behind in 2002, said Mr. Doe, a member of his association's board of trustees. The budget deficit approaches $50,000, he said, and in June the association will consider its second fee increase in three months. The group will also seek a one-time assessment of $7,000 to pay old bills, some of them from last year.

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Oakwood Lakes was one-third completed when the Erpenbeck Co. halted work.
(Glenn Hartong photos)
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        “The service company that provides the lawn care, the lake treatment and care for the swimming pool was very tentative about providing services because they haven't been paid consistently,” said Mr. Doe, a chemicals sales executive.

        Like many Erpenbeck neighborhoods, Oakwood Lakes has a management contract with Towne Properties Asset Management Co. of Cincinnati. Towne Properties partner Phil Montanus did not return a phone call Monday. Nor did Jeff Erpenbeck at the Erpenbeck Co. in Edgewood.

        With Oakwood Lakes only one-third complete, Erpenbeck controlled the board until Bank One foreclosed on the unsold portion of the development three weeks ago. Homeowners filled the two vacant seats. The association is now tackling financial issues as well as asserting its rights in Bank One's foreclosure suit.

        “When you own a condominium, you own the interior of the building — period,” Mr. Doe said. “You don't own the driveway, the roof, the exterior walls or the driveway. Everybody owns a fraction of the community and is responsible collectively for the expense of maintaining the landscaping and the quality of life.”

        Homeowners paid $110 a month until March, when it was raised to $145. An increase in June would ratchet it up 15 percent to 20 percent.

        “Unless we cut services,” Mr. Doe said. “But I don't know what we could cut out. We could cut the grass every 10 days instead of seven, but that would make the neighborhood look not as good in the long term.”

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