The Seawall Lot Owners sue the Club

While the Board has been focused on trying to push through unwise changes to the governing documents, the seawall lot owners have filed suit. Here's a copy of the complaint if you're interested.

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I prepared a summary of the seawall issues a couple of months ago. Just how big an issue is this? In its most basic form, the replacement cost of the seawall is probably about $12 million, of which $2 million is attributable to the 17th hole and community dock (which are the responsibility of the Club). So the question is how the potential replacement cost of $10 million is shared between the seawall lot owners and the Club. The 32 seawall lot owners would have an exposure of about $300,000 if they were solely responsible and the 565 owners of the Club would have an exposure of about $18,000 each if the Club was solely responsible.

Stay tuned. At least this dispute is out in the open now where all of the Owners can follow the dispute. 

Comments

  1. BellFebruary 24, 2022 at 3:03 AM

    Interesting read. Like most things it comes down to money. My question is why wasn't money collected annually for 30 years, from seawall owners and from the Club, for repairs and potential replacement of the seawall, and put it in a restricted cash account for its intended use?
    This liability is no different than any long-term liability like a pension liability, an asbestos liability, or a postretirement health care liability. Annually you assess the seawall status using qualified contractors, determine the required cash flows for repairs and potential replacement, use an actuary to tell you what the liability is and fund it. Voila, over 30 years you have cash for ongoing repairs; and 30-40-50 years later you have a pot of cash to replace the seawall when required. It's pretty simple.

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