The Real Deal Miami

Court decides liens in 2006 Miami Beach foreclosure

Investor Akbar Nikooie lent money in 2006 to renovate 4424 North Bay Road

December 11, 2014 12:10PM

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4424 North Bay Road, Miami Beach, was the center of a transactional mess following the 2006 crash of the housing market.

4424 North Bay Road, Miami Beach, was the center of a transactional mess following the 2006 crash of the housing market.

A 2006 real estate transactional mess that a judge called “more akin to rugby than bona fide property sales” and that got two Florida lawyers disciplined has resulted in the Third District Court of Appeal deciding which liens to pursue.

Investor Akbar Nikooie lent money in 2006 to renovate 4424 North Bay Road, a 6,600-square-foot waterfront home on Miami Beach. 

Nikooie’s mortgage was earmarked for construction but became a down payment on the home, which was owned by Jason Zabaleta. Zabaleta tried to flip the home the same year to a former Venezuelan senator and military officer who borrowed from Washington Mutual, now JPMorgan Chase Bank, according to the Daily Business Review.

A now-disbarred Florida attorney didn’t record the mortgage or the deed changing ownership, and no taxes were paid on the transaction, according to the opinion.

The court decided on Wednesday that Akbar Nikooie will be hold a first-priority lien of $116,000 plus interest and a third-priority lien of about $1 million.  The decision granted JPMorgan Chase a second-position lien of $4.5 million.  General Mortgage is the fourth-position lienholder at $3.5 million.

“All of the parties and their transactional lawyers were caught up in the feeding frenzy engendered by the ‘hot’ real estate market that came to a screeching ‘crash,’” wrote the trial judge in her final opinion.  “All participants are responsible for the ensuing mess and their respective losses.” [Daily Business Review] – Katherine Kallergis

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