In the News from Panama

Homeowner Fees Slashed in Trump Ocean Club

Owners in the Trump Ocean Club received some good news last week. Homeowner association fees in the iconic tower have been cut by almost 13 percent, after changes implemented by a new owner-led management team.

In 19 months the new leadership has been able to “rebuild the financial condition of the P.H. TOC Owners Association to a stable financial condition,” Griselda L. Perez president and legal representative of the Trump Ocean Club (TOC) office component, wrote in a June 3 letter to owners.

As a result, the group’s board of directors recently approved a reduction of the residential common area maintenance (CAM) fees from $4.24 a square meter to $3.70 a square meter, representing a reduction of 12.7 percent.

The new P.H. TOC Administration, which represents owners of all five components of the building—residential, office, hotel, casino and retail — took over control of the maintenance of the common areas in 2015, after a dispute with the previous managers, an arm of the Trump Organization. (Trump continues to manage the hotel as part of the Trump Collection.)

New management was able to tighten expenses by lowering energy costs and reconfiguring the staff, says Duncan McGowan, president of the TOC residential homeowners association and president of Punta Pacifica Realty. Preventive maintenance has also helped to lower overall operation expenditures.

“We are operating more efficiently at a lower cost,” McGowan said. “We were able to maintain the same level of service with less personnel.”

News of the fee reduction has already sparked a flurry of sales inquiries about the Trump, says Jeff Barton, managing director of Punta Pacifica Realty (PPR). PPR oversaw the sale of the last developer-owned apartments last year, which has turned focus on the supply of owned units.

“A drop in the monthly dues changes the economic equation for investors,” Barton says. “They can also see there is solid management in place, looking out for their interests.”

After all the changes, the association has $3.47 million in the bank, Perez told owners. When it took over 19 months ago, the group’s goal was to pay off $1.9 million of unpaid financial obligations and return the cash balance to “a stable level of $1.8 million,” she wrote in the letter.

“This progress has been accomplished with no increase in P.H. TOC administration fees and/or a special assessment of the TOC Owners,” Perez wrote.

Throughout the transition, the association has kept the focus on maintaining the Trump tower’s high standards, McGowan says. The priority is to be responsive to the concerns of the owners, he says.  

“Now the owners can participate in decisions that affect the property,” McGowan said. “The owners are back in control, as they should be.”