Arrears Committee Report - Infinity at Brickell

Finding

The Arrears Committee (the “Committee”) of the Infinity at Brickell Master Association, Inc.
(“Master Association”) finds that the audited financial records of FirstService Residential
(“FSR”) management accurately reflect that Infinity at Brickell Commercial Association, Inc.
(“Commercial Association”) owes the Master Association a total of $630,283.51 for the period
ending on May 31, 2021, which amount remains subject to change through the date of final
resolution of this matter. In addition, it should be noted that there is a monthly deficit of
$3,495.50 being paid by the Commercial Association as of June 2021 that is not included in the
above amount. The additional accruing debt for the remainder of 2021 (June to December) will
amount to $24,468.50.

Background

The Infinity at Brickell Condominium was developed by the DYL Group in 2008 and consists of
459 residential units, 49 commercial units, 661 non-voting storage units, 638 parking spaces, and
common elements, which are all subject to the purview of the Master Association. The
residential units are also members of the Infinity at Brickell Condominium Association, Inc.
(“Residential Association”), while the commercial units are also members of the Commercial
Association. The Residential Association and Commercial Association are distinctly operated
sub-associations of Master Association.

Under Florida law, a condominium association is “turned over” by the condominium developer
to the condominium unit owners upon the occurrence of certain prescribed events or passage of
time. Although the turnover process for Infinity at Brickell occurred many years ago, the various
associations continue to assert discrepancies in accounting and fee ownership against one
another, and these assertions have pushed the condominium onto the brink of a civil lawsuit.

To be clear, the dispute is not about whether the Commercial Association owes the Master
Association funds—the parties agree that there is an indebtedness—but rather about the extent of
such indebtedness.

The Committee was tasked with untangling the competing narratives to discern the actual
amount in controversy and help mediate a solution between the Master Association and the
Commercial Association. This report focuses on the first prong in evaluating the amount in
controversy, with the expectation that no solution can be identified before the stakeholders agree
on the disputed amounts.

The Committee finds that the professional advice historically given to the associations was
woeful and possibly misleading, if not outright wrong. The various stakeholders may have
causes of action against some of these professionals who continued to act on behalf of multiple
parties despite clearly irreconcilable conflicts of interests, which ethical concerns could not be
satisfied by mere waiver.

Participants

In forming this Committee, the Master Association instructed FSR to email all members with a
solicitation to participate. Anyone who wanted to participate was enrolled in the Committee.
Beth Campbell, who chairs the Committee, made every attempt to schedule meetings for
mutually convenient times. Ultimately, the Committee was composed of six participants — five
Residential Association members and one Commercial Association member:

Anrika Rupp (Residential Association) - Ms. Rupp is an engineer who worked in digital
satellite image processing for a government institution in Venezuela. She was on the editorial
committee for the same institution for a number of years, and after that worked in image
processing for the advertising industry.

Beth Campbell (Residential Association) - Ms. Campbell is a retired international
banker with 32 years of banking experience including Private Banking, Capital Markets,
Commercial Lending and Retail Banking. Her positions included global roles as an HR
executive, a global COO and other senior executive roles in a corporation of over 300,000
employees.

Beto Quintero (Residential Association) - Mr. Quintero is an entrepreneur who founded
his own insurance practice and operates four offices across the State of Florida. He is an
experienced executive in sales, marketing, and management.

Joshua Berman (Residential Association) - Mr. Berman is a real estate professional and
an attorney whose primary area of practice is in condominium law, including collections matters
for three condominiums with an aggregate of more than 1,000 units among them.

Michael Steines (Residential Association) - Mr. Steines has owned and operated a
successful jewelry design firm for over 35 years and owns eight residential investment
properties. In addition, he has been a board member for over six years at The Yacht Club at
Portofino in South Beach Miami.

Morgan Overholt (Commercial Association) - Mrs. Overholt is a freelance graphic
designer, owner of Morgan Media LLC, blogger, freelance coach and co-founder of
TheSmokies.com.

The members have reached unanimous consent on the Committee's findings.

Process

The Committee has spent more than six months digesting information given to it and discussing
the issues. The Committee hosted a number of meetings with various stakeholders and has
provided each with a chance to present its case and provide records, documentation, and
accounting with a subsequent open forum for the presenter and Committee members to engage
with a questions and answers period.

On June 10, 2021, the Committee received a presentation from FSR, which presented various
financial records including an earlier iteration of the Due/To From Schedule incorporated herein.
This report shows the official record of the amounts each of the associations—the Residential

Association and the Commercial Association are owing to and paying to the Master Association
and is produced monthly by FSR. FSR’s documentation reveals a long-running deficiency that
does not appear to have been subject to any accounting adjustments that might reflect any
parties’ legal position; thus, the Committee finds that FSR’s production is simply a statement of
fact.

On June 16, 2021 , the Committee met with Maria Eugenia Bottas, President of the Commercial
Association Board of Directors, who explained the Commercial Association’s perspective and
was very responsive to the Committee’s questions.

Ms. Eugenia Bottas explained that the Commercial Association’s dispute of the deficiency is
attributable to a few factors. First, the Commercial Association does not want to be liable for the
carrying costs of certain real property that was deeded to it by the developer following turnover.
Second, while the Commercial Association acknowledges that certain monies were retained by it
that rightfully belonged to the Master Association, the Commercial Association believes that it is
protected by the statute of limitations such that the Master Association cannot collect past due
amounts from beyond a certain point in time.

On June 22, 2021, the Committee sat with Alicia Mancuso, President of the Board of Directors
of the Master Association, who detailed the Master Association's understanding of the situation
and explained why legal action was not taken previously. Essentially, although the
sub-associations were aware of the financial remittances required to be paid to the Master
Association and their respective responsibilities to do so in accordance with the condominiums’
governing documents, the Commercial Association failed to transfer the required funds. The
Committee takes the position that the Commercial Association should have transferred all funds
regardless of collection because it is the Commercial Association’s responsibility alone to ensure
collection from its members. The Committee further believes that the Commercial Association
acted intentionally in (i) actually collecting a significant amount of funds attributable to units
owned by third-parties, which funds were not subsequently passed-through to the Master
Association, and (ii) not including in the Commercial Association’s annual budget the necessary

amounts to fund obligations to the Master Association for real property owned by the
Commercial Association.

Analysis

There appears to have been an agreed account stated in January 2015 that was set to have
resolved this dispute. From this point on, the amounts have continued to accrue for two primary
reasons: (1) the Commercial Association has withheld funds collected on behalf of and designed
for the Master Association; and (2) the Commercial Association contests its liability to pay
assessments on its association-owned property, including storage units deeded to the Commercial
Association.

As to the first point, each sub-association member has an individual account page through Click
Pay and FSR. The FSR page specifically breaks down the purpose of all funds collected, and, for
example, designates to which association each sum is collected. Here is a sample screenshot
from a Residential Association unit owner’s payment portal:

As is shown in the above image, the Residential Association initially collects the funds for the
Master Association and receives the funds in its accounts, these funds are unmistakably collected
for and on behalf of the Master Association. Extrapolating this information as to all members, it
is readily identifiable that each sub-association must remit the full balance owed to the Master
Association each month.

If a member of a sub-association does not remit full payment, it is uniquely the sub-associations’
obligation to initiate a collections process. The Master Association’s ability to collect is from
sub-associations only — not directly from non-payers. This means that it is the Commercial
Association’s responsibility to ensure that it is collecting from the unit owner against which each
amount is assessed. The Committee finds that it is irrelevant as to whether Commercial
Association actually collects because the statute prescribes a lien and foreclosure process that
inures to the benefit of the Commercial Association.

The portion of the delinquency attributable to property owned by the Commercial Association
(i.e., storage units) are a red herring — they are a small part of the issue and not a basis for the
Commercial Association to contend it is over-assessed. The Commercial Association is
indisputably the fee owner of this real property and inures to all of the benefits of a fee owner
(e.g., the Commercial Association rents these storage units), without paying the expenses.

Furthermore, while there is an unambiguous lack of good faith by the past and present Boards of
Directors for the Commercial Association to resolve this in a timely manner, the Committee
believes that there is no reason to charge interest, late fees, or treble damages (even if legally
permissible) because such punitive actions further penalize the many members of the
Commercial Association as opposed to the directors who simply failed their constituencies.

Similarly, the Committee believes that while there has been some conveyance of commercial
units and some or all of the present unit owners may not be directly liable for these
delinquencies, this is a chief peril of condominium ownership and the reason why Florida law
requires condominium association financial records to be given to new purchasers during a
rescission period. These records can be retrieved from FSR during due diligence, and sellers may
have their own disclosure requirements. We must all do our own due diligence to be sure we
understand the details —similarly, the Committee submits that a Board cannot unilaterally undo
contractual obligations undertaken by its predecessors, as the current and several prior
Commercial Association Boards of Directors have expressed desire. Ultimately, for-profit
businesses cannot look to residents’ after-tax income to subsidize their predecessors’ mistakes.

Next Steps

After years of controversy, the Committee does not believe that the Commercial Association will
simply accept these findings because of the hardened positions taken by its Board of Directors,
past and present. If the Commercial Association cannot present new evidence to dispute this
Report’s findings and remains unwilling to accept its conclusions, then the Committee
recommends that the Master Association should immediately move forward with its litigation to
collect all amounts to which it is entitled, up to the amount actually identified ($630,283.51).

This caveat of collecting only what has been identified is essential to what the Committee
believes is fair in the instant circumstances. While each side has engaged in obvious legal
posturing (e.g., the Master Association is asking for treble damages in its civil theft claims; the
Commercial Association is pleading that it is protected by the statute of limitations after
spending years engaging in bad faith negotiations and stalling tactics), the fact is that the
members themselves simply want the directors to take action to permanently resolve this matter,
which has started to depress property values in the condominium, for units in each of the
sub-associations. The Committee’s position is that both sides’ legal posturing is (likely)
technically correct, but the Master Association’s request for treble damages could result in its
entitlement to more than it should have been paid under the audited accounting records, and the
Committee sees its job as simply to make both sides relatively whole.

Should the Commercial Association accept the findings of this Report, then the Committee
believes it would be an appropriate next step for the Commercial Association to make the initial
proposal about how to repay the indebtedness to the Master Association. Ultimately, the various
stakeholders are neighbors and it is important that any solution not drown one party at the
expense of another; however, it is similarly important to understand that where the Commercial
Association units are used for-profit, any term on repayment is at the expense of the Residential
Association owners, whose units are generally supported by their after-tax incomes. Balancing
these realities is critical to finding common ground.