The Real Deal Miami

Hollywood Beach Resort residents sue KW Property Management

The management firm allegedly used association funds to illegally open business
January 16, 2018 02:30PM

Hollywood Beach Resort (Credit: Wikimedia Commons)

UPDATED: Sept. 25, 2018 4 p.m.: This lawsuit was settled and dismissed by the two Hollywood Beach Resort associations, after KW Property Management and Consulting’s attorney Frank Simone filed a motion to dismiss and a motion for sanctions against both the associations and their attorney. KW did not pay any money and agreed not to pursue the sanctions, Simone said in a statement.

Two Hollywood Beach Resort associations are suing a former property management company for allegedly failing in its financial duties to the groups.

The Hollywood Beach Resort Condominium Association and the Hollywood Beach Hotels Owners Association allege that KW Property Management and Consulting failed its contractual obligations, which included managing association activities, preparing financial records, and helping budgeting money, according to the Daily Business Review.

KW Property illegally signed a lease for an off-site property to run a bar, restaurant, and hotel business on behalf of the associations, the suit claims. When that business began to fail, the board members funneled association funds to keep it open, while KW Property allegedly issued checks and cooked balance sheets to cover the expenses, according to the suit.

The associations hired KW Property in 2011, terminated the contract in 2016, then rehired it, but then the company quit later in 2016, according to the complaint. KW Property claims it was never fired, but quit in late 2016.

KW found itself in legal hot water in mid-2017 when an employee burglarized units at a Venetian Islands co-op in Miami Beach and stole tens of thousands of dollars worth of luxury goods and electronics. KW’s lawyer claimed that the company was not responsible for an employee’s actions when they only benefit the employee. [DBR] — Dennis Lynch