WEST PALM BEACH, FL - Several years after plunking down a six-figure deposit on a condo in downtown West Palm Beach, Alberto Lopez has seen his bank balance and credit score plummet. Irina Hermann, too, is unable to close on a luxury condo after losing her job. Lopez and Hermann are among more than two dozen condo buyers who filed three lawsuits Tuesday against downtown West Palm Beach's newest condo buildings, Two City Plaza, CityPlace South Tower and City Palms.
The suits allege breach of contract and violations of the interstate land sales act, among other things. Miami attorney Robert Cooper filed all three suits. "The sellers were out there promising the moon, and hyping up people into a frenzy," he said. He said developers told buyers that they'd help buyers flip their units.
"The developers created this situation," he said. "A responsible developer would never, in a million years, sell to a buyer who didn't plan to close."
Officials at Two City Plaza and City Palms said they hadn't seen the suits and couldn't comment. A spokeswoman for CityPlace South Tower could not be reached for comment.
The plaintiffs in the suits have contracts to buy 15 units at Two City Plaza, nine at CityPlace South Tower and two at City Palms. They're asking developers to return their deposits plus interest and pay attorneys' fees.
Lopez, a real estate agent in Broward County, said that in 2004 he paid a $115,140 deposit on a $575,700 unit at Two City Plaza. He was told to expect to close in July 2007. He planned to live in the unit, not flip it for a profit. But Two City Plaza didn't begin closing on units until late August 2008.
"My business went down, my credit score went way down," Lopez said. "I could have closed in 2007. But 15, 18 months later, my situation has changed."
Hermann said she, too, has fallen on hard times since she and her husband signed a contract in 2005 to pay $514,900 for a condo at CityPlace South Tower. The Hermanns took a home equity loan on their house in New York to come up with a $103,000 down payment, but Irina Hermann since has lost her job as an accountant. "They solicited me into this unit saying it was a good price and I could resell it," Hermann said. "They promised me there would be a resale program, but the resale program never opened."
All three condos have struggled to close units that buyers committed to during the region's historic real estate boom.
Kolter Homes' Two City Plaza has closed on 97 of its 467 units, according to property records. Related Group's CityPlace South Tower has sold 38 of its 420 units. H&H Development's City Palms has closed on 31 of 288 units.
In all, only 166 of 1,175 units have closed in the three projects, which were marketed during the peak of the real estate craze.
Related Group head Jorge Perez in October visited CityPlace South Tower and gave a stark assessment of the real estate boom. "We kidded ourselves," Perez said. However, he also said he expected at least 60 percent of the units there to close. So far, fewer than 10 percent have sold.
Source: PalmBeachPost.com