A luxury condo tower in Atlanta escaped paying most of its water and sewer bills for more than a decade because the city didn't bill the residence properly and the homeowners association looked the other way, a Channel 2 Action News investigation found.
“It’s shocking to me. If everyone knew this story, it would cause outrage to everyone,” said condo owner Jack Richardson.
Richardson, an investment analyst, moved into the Phoenix on Peachtree at 2881 Peachtree Rd. in 2001, just as it opened. Luxury units in the 27-story building price today from $400,000 to more than $1 million.
And for years there was an unwritten amenity: Atlanta’s watershed management agency wasn’t properly charging for water and sewer consumed in the building’s common areas.
“I believe over 15 years we owe approximately $1 million without penalties and interest, just on the pure bill alone,” said Richardson, who blew the whistle on the building’s water issue.
In 2004, Richardson became aware of the billing problem from a homeowner association audit from 2003 that said “the association had not received a bill for a meter that services common areas…This has been a problem from the beginning.”
Richardson said he was told the homeowner’s association would pay it.
“We believed what the board told us,” Richardson said.
Richardson said he became even more concerned when he had trouble getting homeowner association financial records in later years.
Eventually, he became convinced the bills were not being paid. Richardson said every resident pays for common area water and sewer usage as part of their homeowner association fees.
“They’ve actively sought to cover this up from the residents of the building. And they got caught,” Richardson said.
In early 2015, 11-years after the earlier audit revealed the billing problem, other residents began to ask questions.
One email to fellow residents stated: “It’s very unfortunate that the board…made the extremely questionable decision more than a decade ago not to discover why the association was being grossly under-billed.”
The emailer continued: “Surely the directors did not believe the ‘free’ services would last forever.”
Another resident reported that board member and resident Erroll Davis — the former Atlanta school superintendent — had said “the board did not feel that there was an ethical or legal obligation to attempt to pay…Unless the city sent a bill.”
Davis told Channel 2 the billing issue fell through the cracks because of turnover on the homeowners association’s board.
Atlanta Watershed Management spokeswoman Lillian Govus said since 2001 the Phoenix paid only a few water bills and has not paid any sewer bills. She said says the water bills they did pay were about 95 percent lower than what they should have been.
“It’s a significant amount of money,” Govus said.
After members from the homeowners association board approached the city last fall, the city found meter and billing problems at the condo location that stretched back perhaps as far as 2001, the year the building opened.
As of October 2015, they started paying both sewer and water bills.
“Right now, the city has no intent to back bill this property, because part of it was our responsibility,” Govus said.
“I can’t believe the lengths that the board went to hide this for so long,” Richardson said. “This should have been resolved 15 years ago and could have, had the board, you know, just made a five-minute call to the city water and sewer department.”
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