Wednesday, May 12, 2010

More conflicts between buyers and developers

Buyer goes after Related assets in condo lawsuit

A Coral Gables law firm is seeking to garnish Related Group assets for failing to pay a condo depositor despite a Miami-Dade Circuit judge’s order.

The company was ordered to pay Rafael Maldonado $16,388 after Circuit Judge Jon I. Gordon sided with the would-be buyer, who demanded the return of a portion of his down payment after he failed to close on the condo under a 2005 contract. Maldonado’s attorneys, Robert G. Post and Carlos A. Romero with Post & Romero, say it’s a story they’ve heard too frequently since the housing market crashed: a developer engaging in delaying tactics and not returning deposits.

The funds remain in an escrow under the control of Chicago Title Insurance. Romero said the company will not release the funds without authorization from Related. Romero’s firm filed a motion for a writ of garnishment against the company Monday. Escrow account managers at Chicago Title’s Florida offices did not return calls for comment before deadline. Although the April 13 judgment does not state when the funds should be paid, Romero cites a state law that allows for collection on the judgment after 10 days if the defense doesn’t post bond or seek an appeal. Monday was the 27th day.

“It seems to me that if the developer just wanted to pay, it would have done so in 2009 without making an innocent party jump so many hoops unnecessarily. These delay tactics continue to be seen and felt by innocent buyers,” Romero said.

He said the developer’s in-house counsel, Elizabeth E.S. Hollander, is now coming up with reasons to justify delaying payment. “This in-house counsel took the position that they had a ‘reasonable amount’ of time to pay the judgment,” Romero wrote in an e-mail Monday. “The judgment neither reflects nor provides for postponement of payment for any time, let alone a reasonable period of time.” Hollander, Related’s assistant associate general counsel, argues the judge’s order could be interpreted to allow the company to disburse funds at a later time, according to an e-mail provided by Post & Romero. Hollander declined comment.

The company’s lead attorney in the case, Related vice president and associate general counsel Betsy McCoy, did not return calls by deadline. The final judgment ordered the company to pay Maldonado a portion of his deposit. He put down $59,780 on a $298,900 unit on the 11th floor of the Arquitectonica-designed 500 Brickell West Tower condominium. Gordon ordered Related to return 25 percent of the deposit plus interest as required by the purchase contract. When Maldonado found the unit in 2005, the Puerto Rican attorney thought it was a perfect fit.

He was looking for a small condo near the heart of the city, a place to stay during short visits to see his mother and sister. The one-bedroom unit was just a few steps from the gym, on the same floor as the swimming pool and had a sunset-view balcony. When the housing bubble burst, the condo lost value, and Maldonado — who represents developers — decided to pull out of the deal and keep a portion of the deposit. “The worst part is they sold the apartment to someone else, and they haven’t paid me my miserable 25 percent.

I’m losing a considerable amount of money,” Maldonado said Tuesday. “I’ve been dealing with canceling this for over a year now.” Related, which uses the motto “Redefining cities and skylines” on its Web site, was one of Miami’s most prolific condo builders during the boom years and became a national leader in the industry.

Like many other developers, Related went into contraction mode, recently pulling out as a partner in the Trump Towers luxury condo in Sunny Isles Beach.



Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: GoldenIsles-homes.com
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