Condo investors say they were defrauded
By Pankaj Ladhar of Manos • Alwine P.L.
As you are likely all too aware, the real estate market in Miami and the rest of South Florida has been severely impacted by the downturn in the housing market. Home buyers and real estate investors who had a seemingly bright economic outlook several years ago are now facing depressed property valuations in a troubled real estate market. This has lead to an increase in real estate disputes as developers and investors seek to mitigate the damage from the economic troubles.
The Orlando Sentinel reports that litigation regarding a condominium development has landed the investors and the homebuilders back in federal court. The case is interesting because the investors are claiming that they were defrauded in violation of federal securities laws
Last week, the U.S. Court of Appeals for the 11th Circuit revived claims by the investors that the homebuilder had engaged in selling unregistered securities. The investors asserted that as investment opportunities, the promotion and sale of the condos was subject to federal securities laws. The court had previously dismissed these claims.
The investors said that when they were sold the condos, it was indicated that the units would be rented and managed by a management company. The company was supposed rent the units and then pay mortgage payments, utility costs and maintenance fees. Representatives for the investors say that these obligations were never carried out.
Ownership of an investment property is often an individual’s first or only exposure to potential commercial lawsuits. While real estate developers and banks may be very accustomed to real estate litigation as simply a part of their everyday business, A private individual who decides to invest in real property may have never had to face this type of dispute before.
For both those unaccustomed to litigation it is important to seek advice from an experienced professional to help you protect your interests.
Source: Orlando Sentinel “Investors’ condo suit versus Pulte revived,” Mary, Shanklin, Nov. 6, 2011