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Condo association for Caribbean Isles Villas in Miami-Dade under investigation for neglect, handling of funds

Miami-Dade HOA under investigation
Miami-Dade HOA under investigation 06:36
A boarded up wall at Caribbean Isles Villas. CBS News Miami

MIAMI -- A community in disrepair demands change. The board president of Caribbean Isles Villas responds to those concerns. At the same time, Miami-Dade police confirmed to CBS News Miami its Economic Crimes Bureau is investigating the Association's handling of funds.

Photos sent by residents to CBS News Miami revealed bugs crawling up the wall and ceiling. Another unit photo showed a cracked ceiling and what appeared to be mold or mildew.

Our cameras captured cardboard covering soaked drywall in a bedroom from a third different unit that Luis Nunez happens to own and rent.

"Two months since it's been reported," said Nunez. Even the water is coming down as we speak."

Nunez owns and rents multiple condos in Caribbean Isles Villas in Homestead. He listens as one of his renters pleads for repairs. She speaks with him from behind our camera, fearful of retaliation from the Association.

"My biggest priority is all of us getting sick, and it's not what I want," shared Nunez's tenant from that unit. "The sheets keep getting wet. I have to dry them constantly."

"There's nothing I can do," explained Nunez. "You have to repair the roof, which the Association owns. Even if I do it on my own, I risk being sued because I have no right to touch that."

"It's deteriorated, and it's very disheartening because it shouldn't be that way," said Ketty Urbay, another unit owner.

While walking with CBS News Miami's Joe Gorchow, she pointed out balconies covered in what appears to be mildew and stairways with a similar appearance. We notice cracked sidewalks and multiple mounds of trash.

"We started to organize ourselves, and we're close to 160 owners strong, and we started what's called a recall process," shared Urbay.

Urbay and Nunez want to replace three sitting board members by placing themselves on the board. On August 3rd, Florida's Department of Business and Professional Regulation arbitrator certified their recall effort. But, the Association filed a lawsuit to block it temporarily.

"There has been limited to almost practically no access to records," added Urbay.

Records like budgets, she says, have been difficult to access since board leadership was elected at the end of 2019.

"We haven't seen any physical evidence of the funds used," said Urbay.

Urbay and others against the current leadership tell us an election for a new board will be held Monday in Hialeah, not in Homestead, at 2 p.m. It's roughly a 40-mile drive and takes about an hour without traffic.

"This is very difficult for people to attend," shared another unit owner. "Almost impossible."

"If the same board wins, it's just going to continue to go downhill," said Urbay.

A few years ago, the Association hired a firm from Boca Raton to conduct an independent audit of the 2020 financial records of Caribbean Isles Villas.

In its report, a "concentration of risk." Mentioning that 55 of the 252 units are "owned directly or indirectly by one board member who controls the board." "Four vendors [receiving money for Association work] are related to a board member who owns the 55 units."

"We are successful developers," shared Michael Sagaro, Caribbean Isles Villas board president. "We're in a business. That's what we do. They needed our apartment team."

Gorchow referred to the audit report when asking Sagaro if he still contracts vendors for Caribbean Isles that are directly or indirectly connected to his investment group.

"I'm not going to go out there and pay top freaking dollar," said Sagaro. "When it's at the same rate, like you got a janitor, I have a guy to put a drywall to replace one."

Sagaro spoke to us over the phone over several days this week. He said his investment group owns roughly 30% of units within the community and nearly 1,000 total apartments and condos throughout South Florida.

In January 2020, a proposed meeting noticed by the Association detailed the need for a loan of over a million dollars to address "capital improvement and roof repairs as deemed needed by the Board of Directors." The audit confirmed the Association did obtain that loan the next month.

Gorchow asked Sagaro, "What was the plan for the million-dollar use?

"Million dollars with over 85 repairs done, immediately," shared Sagaro. "Last week alone, we had four major roof repairs."

The City of Homestead couldn't find any permits pulled for roofing projects from 2020 through the current day. It did find 61 permits for work related to fencing, plumbing, mechanical, alarms, and electrical.

Sagaro told us roof leaks throughout the community have caused excessive interior drywall damage and damage to electrical panels. He said the annual association dues fall short of daily repair needs and insurance.

He provided a spreadsheet outlining what he said are operating expenses and how his company, called Threefold Caribbean Villas Property Holdings, LLC, has contributed over a million dollars toward roofs, operating, and insurance repairs.

"There's not enough money to pay the budget, the monthly bills," emphasized Sagaro. "So every time there's a roof leak in the community, yes, Threefold group pays for it. It's been non-stop for four years."

And Sagaro said Threefold will fund a massive roofing project for all 27 buildings.

"We've already placed the money for the deposit," shared Sagaro.

We have yet to verify the accuracy of the budget expenses independently by looking at the Miami-Dade County Community Associations Registry website.

"I can't say anything with certainty about our financial status," added Urbay. "We have yet to see a full picture."

In January 2023, the Association hired a new property management company to help review finances, address leaky roofs, and other repair needs.

That company terminated its agreement with the Association four months later. It issued this letter to the Board of Directors. Citing alleged irregularities by Sagaro and the board of directors and what it said was an unwillingness to follow state laws and regulations.

Sagaro categorically denies those claims.

"No answers, for what I would call almost a black hole of four years of watching our community deteriorate and not knowing what is happening with our funds," said Urbay.

Urbay told CBS News Miami the community was in far better shape and had hundreds of thousands in reserves before the current board of directors was elected in 2019.

Michael Sagaro declined to discuss the ongoing police investigation into the Association. He told us on Friday the Association will provide the financial records to the community.

The previous board sent a written statement to CBS News Miami that said: "In name of the prior Board of Directors we are proud to announce that we guaranteed a clean and non fraudulent election process. We would like to congratulate the elected Board members and are open to a smooth transition. Additionally, our company as investors in the community with the highest owned units will continue to offer our financial support for any of the necessities of the community."

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