Tenants Bail Out, Liens & Fines Pile Up As Lender Seeks To Wrestle Away Control Of Half-Empty, 242 Unit Complex From Landlord In Foreclosure

In Gainesville, Florida, The Gainseville Sun reports:

• With a Saturday deadline to fix 2-year-old city code violations or face $7 million in fines, In The Pines apartment complex instead faces new violations as the owner and a bank trying to foreclose on the property prepare to battle in court over rent payments and a repair fund.(1)

• The complex has been accruing fines of $31,000 per day since a June 2009 inspection found 31 of 33 buildings were still in noncompliance with violations that include deteriorating external wood staircases, failing roofs and electrical issues dating as far back as December 2007. One building was declared uninhabitable in August 2009 because of a sewage leak. The complex needs an estimated $1.2 million in repairs.

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• A fall report to the mortgage lender showed that 47 percent of the 242 units were occupied. The city is unlikely to collect its fine on a property that faces 32 liens, mostly from maintenance contractors, and a mortgage bank with first dibs on any assets.

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• As the lengthy foreclosure process proceeds, the bank is seeking to have the court appoint an independent receiver to manage the properties over concerns about the deteriorating value of In the Pines and that the owner is not accounting for nearly $383,000 in monthly rent payments.

For the story, see Problems mount for apartment complex (In the Pines faces new code violations while a bank tries to foreclose on the property).

(1) Reportedly, First Regional Bank of California filed to foreclose on the complex and three Jacksonville complexes Dec. 2, saying owner Francesco Mileto of Fort Lauderdale was in default on $51 million still owed on the properties. Mileto bought the complexes from a Los Angeles condo conversion developer in November 2008, after the initial violations were found, the story states.