Senior residents at Casa Gateway, a moderate-income senior and family condominium complex, located on the west side of Palisades Drive at Sunset Boulevard, believe their homeowners association is not listening to their concerns.
The moderate-income housing for families and seniors was required of Highlands developers by the City in 1987. It provides 32 units for families with dependent children, and 68 senior units.
The HOA has five members, of which three are from the family units, which have their own washers and dryers—and that goes to the center of this controversy.
Board member Paula Deats faces opposition in trying to end a contract with WASH, which she says has not been beneficial for those living in the senior units.
Last year, El Segundo-based WASH entered into an agreement with the HOA board. The 18 washers and dryers, owned by the HOA in the senior units, would be picked up and replaced. WASH would pay the HOA $50 for each machine.
The association would continue to pay for water and electricity to run the WASH machines. The cost of a load of laundry would be $1 for a wash and $1 for dryer, and coins would be replaced by WASH pre-loaded laundry cards.
The contract specified that WASH Multifamily Laundry Systems would pay 55 percent of the money they receive back to the HOA – less any applicable taxes, credit/debit card and wireless system costs and fees payable in connection with the operation of its equipment.
Even though this HOA is not allowed to enter into a multi-year contract, the wording states: “Unless given 30 days’ notice . . .This agreement shall be renewed automatically at the end of their initial term for six successive 1-year terms.”
Deats said, “That contract has been a disaster, both financially for the HOA and physically and emotionally for the seniors who are stuck using them.” She added that she didn’t think the board did due diligence in 2020 by reading the fine print on the last four pages of the agreement.
The contract with WASH was signed by the Board during Covid lockdown, and Eleanor Smith, president of the Casa Gateway HOA, told CTN then that, “People on the board have been collecting the coins and with Covid-19, that is dangerous.”
At that time a resident, who was against the switch, came up to this editor and said that he had offered to collect the money. “We want to leave everything the way it is.”
Circling the News learned that 68 owners of the units in the senior building (2/3 of the Association) were never canvassed if they wanted to change from coin to card last year.
The 32 association members in the two- to three-bedroom family units are allowed to have in-unit washers and dryers and are not affected by senior building laundry rooms.
The contract is to be renewed on July 16, but the company must have 30-days notice for renewal, which puts it on June 16, tomorrow, and some seniors want the board to end the contract now and allow the HOA to have its own machines again.
Before the switch, CTN learned the association was netting between $800 to $900 a month on average. An accounting for 2021 showed that in January, $70 was given back to the HOA; in February, it was $300, and in April it was $86. May’s total has not yet been made available.
A larger problem with re-signing with WASH could be legal. The leasing industry standard requires contracts to contain an evergreen clause, which means that with a minimum contract of five or six years, there is an automatic renewal. “We are specifically prohibited by our CC&Rs from allowing that to happen,” Deats said.
How would machines be replaced if WASH were to pull out? “We have in our original Co-Op laundry account $16,098,” Deats said, noting that it would be nice if the HOA board could help purchase an additional machine, since “It was the Board’s unilateral and unanimous vote to contract with WASH that we lost $19,000 worth of ‘old’ machines.”
The machines, the sole amenity in the 501 building, were supposed to cost only enough, plus some money put aside for inevitable repairs and replacement and to cover the cost of water and power, according to several long-time residents.
In its contract with the HOA, WASH notes that if the operation becomes uneconomical, it can cancel the contract, no foul, with 30-days notice.
There is a history as to why the Casa Gateway Board decided to enter into a contract with WASH in July 2020. First of all, throughout the years, individuals collecting the quarters from the washers and dryers were continually accused of “stealing.” Board members who lived in the Senior Building were being personally contacted each time there was a maintenance issue; quarters were being eaten up by the machines, etc. The Association was paying for maintenance as well as replacement of machines. The machines never generated between $800-$900/month in revenue. The amount collected was closer to $500-$600/month and money collected was never deposited into the “general fund” to cover costs of electricity, gas and water.
The 2020 Board decided to review options with several companies before making a decision to go with WASH. At that time there were three seniors on the Board and two family members. Since the HOA is not allowed to enter into a multi-year contract we took additional steps and had our HOA attorney and the WASH attorney come up with a solution wherein the contract could be cancelled with 30 days’ written notice by either party within 30 days of the anniversary date of the contract each and every year. This was deemed acceptable.
We have pursued other companies – not one of them is willing to add a clause allowing termination of a contract each and every year. The Board decided in its best judgment to review other options and put it to a vote by the general membership to allow entering a long-term contract with another company when we come up with a better alternative. This would require 120 days in order to hold a special election with notices, etc., not enough time to meet the July 16th deadline. We are hoping to have something in place for our January 2021 election. It would require 2/3 of the membership in order to make a change (67 votes).
Also, family unit washers and dryers are purchased and maintained totally at their own expense. Several families don’t have washers and dryers in their units and use the ones located in the Senior Building which are common property, paid for by all – families and seniors.
In WASH’s defense, we have been advised that $1 for a wash and a dry is well below the national standard of $2.50/wash and $2.00/dry. We have decided to raise our wash price to $1.50 and dry to $1.25 – still well below the going rate. This will bring in more revenue to our Association. WASH is a well-established company serving hundreds of condominium associations throughout the Los Angeles area.
Board members are volunteers and we do our very best to serve our community.
Linda de Martinez,
Casa Gateway Treasurer