The parties have reached a tentative settlement in a class action filed against Smith Property Holdings Harbour House South L.L.C. on behalf of residents who lived in Harbour House South, a 452-unit residential apartment building at 10275 Collins Avenue, Bal Harbour, Florida between November 1, 2000, and January 9, 2003. The action alleged that contractors working for the property owner removed the building's air conditioning system during renovations, causing severe mold and moisture problems, and inadequately finished the renovations. Claims must be on file by March 14, 2004, to be considered valid.

Harbour House has acknowledged that it hired independent contractors to undertake the renovation and that the air conditioning shutdown caused numerous concerns at Harbour House South for the property owners and residents.

Under the terms of the settlement, each qualifying participant who executes a release of claims against Harbour House will receive a cash payment. The settlement creates two categories of benefits: (1) Critical Period Benefits will be paid to qualifying participants who resided at Harbour House South from June 4, 2002, through January 9, 2003. (2) Pre-Critical Period Benefits will be paid to qualifying participants who resided at Harbour House South before June 4, 2002. The term "claimant group" is used to mean a group of people who are joint signatories to a lease.

Critical Period Benefits

Critical period benefits will consist of base compensation benefits, plus either Option 1 benefits (the "Easy" payment option) or Option 2 benefits (the "Itemized" payment option).

Base compensation benefits will consist of: (1) a per-person payment of $3,000 to each qualifying participant in a claimant group; and (2) a single per-unit payment, to be paid singly or jointly in the case of joint tenants, to all qualifying participants who are also lease signatories in a claimant group, equal to 65% of the lease signatories' monthly base lease obligations between June 4, 2002, and January 9, 2003, excluding months during which lease signatories physically occupied their unit but withheld rent from Harbour House. For any months during that period in which the lease signatories physically occupied their unit but withheld rent payments from Harbour House, the company will receive a credit towards the amount of the per-unit payment in an amount equal to 35% of the lease signatories' monthly lease obligation for those months. This credit does not apply to periods during which lease signatories withheld rent and vacated their unit due to scheduled remediation or vacated their unit after having provided Harbour House with written notice about alleged mold conditions.

By way of illustration, a husband and wife who jointly leased and occupied a unit and fully paid rent at $1,000 per month for six months during the this period would be entitled to individual payments of $3,000 each and a joint payment in the amount of $3,900 ($1,000 x 6 months x 65%), for a total compensation of $9,900 for the couple. If the couple had withheld rent for two of the six months, one of which was during scheduled remediation when they vacated and one of which during their occupation, the couple would receive individual payments of $3,000 each and a joint payment of $2,900 ([$1,000 x 5 months x 0.65], for a total compensation of $8,900.

Option 1 Benefits are simply an additional $500 per person to be paid on an expedited basis to every member of a qualifying claimant group who is entitled to critical period benefits, but only if all members of a claimant group elect to receive Option 1 Benefits and no member makes a claim or claims for additional itemized Option 2 Benefits.

Option 2 Benefits include benefits for certain specific personal property claims or benefits for certain medical condition claims. Participants will have to itemize and provide proof of their damages to receive these benefits. The benefits are available on a showing of:

(1) Specific personal property damages--for unresolved claims on personal property that was lost, stolen or damaged as a result of the air conditioning shutdown or Harbour House's maintenance during the time period.

(2) Medical conditions related to the renovations--covering all personal injury claims for compensation from Harbour House but does not include any claims for punitive, exemplary, or statutorily enhanced damages. Participants may receive certain compensation for these claims either (a) by presenting adequate substantiation of documented medical expenses incurred from June 4, 2002, through August 26, 2003, for specific conditions arising as a result of mold exposure at Harbour House South during the period, or (b) by electing to and in fact resolving medical conditions claims through mediation.

Some Specific Medical Conditions

Certain medical claims will be dealt with differently. These are specific conditions that, according to the American College of Occupational and Environmental Medicine (ACOEM), can occur from inhalation of or dermal contact with common indoor molds. Those conditions are described in "Adverse Health Effects Associated with Mold in the Indoor Environment," issued by the ACOEM on October 27, 2002.

To receive a payment equal to two-and-one-half times the total of expenses incurred from June 4, 2002, through August 26, 2003, for these conditions, a qualifying participant must present adequate documentary proof of such expenses. Alternatively, participants may choose to resolve all medical condition claims through mediation. In the event participants elect the mediation option and their medical condition claims are not resolved through mediation, they may receive base compensation benefits and any option 2 benefits and still preserve their right to pursue compensation for medical condition claims through jury trial by a Florida court.

Pre-Critical Period Benefits

This consists of a single payment in an amount equal to one month's worth of rent to be paid jointly to all qualifying participants in a single claimant group who did not reside at Harbour House South between June 4, 2002, and January 9, 2003, but who present proof of property damage or bodily injury arising from unresolved moisture-infiltration damage or mold damage to an apartment unit. The evidence must be sufficient to show that the damage more likely than not existed or occurred in the unit between November 1, 2000, and June 3, 2002.

Remediation of Units

Harbour House has agreed to finish any incomplete remediation of qualifying participants' apartments following protocols consistent with available government guidelines for such remediation. For each unit, Harbour House will also:

(a) provide either alternative temporary accommodations at Harbour House South or a housing and meal allowance while the unit is being remediated, and

(b) for any lease signatories who seek to terminate their leases at Harbour House South based on health concerns or issues relating to the presence of mold, promptly terminate such leases without cost or penalty.

Qualifying Class Members whose units were remediated during the Critical Period or who have undergone remediation after January 9, 2003, and have not been reimbursed for their housing and meal allowance may submit their claims to the claims office, which will be able to reimburse those expenses.

All claim forms are available at the settlement website. If you wish to apply for benefits, you must complete and submit the required forms and mail them to:

Harbour House South Claims Office
c/o Hamlin & Burton Liability Management
111 Magnolia Avenue
Suite 1000
Longwood, Florida 32750

1-866-332-4256

The settlement will not be effective until the court grants it final approval. The court has scheduled a hearing on the matter for November 21, 2003.