Ecuador’s former central banker sues Privé developers to cancel $3.6M condo contract

Suit alleges ongoing litigation is damaging to unit's value and marketability

Feb.February 06, 2018 08:45 AM

Privé at Island Estates

A top South American banker is looking to back out of purchasing a $3.6 million unit at Privé at Island Estates, alleging that ongoing lawsuits between the developers and neighboring homeowners could have a significant negative impact on the condo’s value and marketability.

An entity tied to Abelardo Pachano Bertero, a former head of the Ecuador Central Bank who now runs the financial and advisory firm Finanview, sued Privé Developers last month for breach of contract and cancellation of contract in Miami-Dade Circuit Court.

APB Real Estate Holdings Inc. is seeking a court order to reclaim its $1.8 million deposit, which has been held in escrow since August 2014, when Bertero signed a purchase agreement for a 10th floor condo in the two-tower luxury high-rise in Aventura. The 150-unit project at 5000 Island Boulevard is 75 percent sold out and opened last month.

“We were forced into a corner,” said J. Luis Quintana, APB’s lawyer. “[The developers] are pretending as if everything is great and people should close with no questions asked.”

Daniel Lebensohn, a principal of BH3, the company developing Privé at Island Estates in a partnership with Gary Cohen, dismissed APB’s complaint as a prime example of buyer’s remorse. “This is just a case that is common to every single new development where a buyer here or there isn’t able to close due to their own circumstances, yet seeks to grasp any reason real or imagined to absolve themselves of their contractual obligations,” Lebensohn said.

According to APB’s lawsuit, Privé Developers sent Bertero’s company an amendment to the project’s prospectus offering on Dec. 11 that disclosed the existence of five other pending complaints filed by the Williams Island Property Owners’ Association, the Island Estates Homeowner Association and island residents David Clarke and Dara Clarke. For the past five years, the two associations and the Clarkes have tried to stop the project by suing Cohen, BH3 and their related development companies. In turn, the developers have filed counterclaims. 

Bertero’s APB alleges that the prospectus offering amendment materially alters the project in a manner that is adverse to the buyer because its contains a statement that “each buyer acknowledges that the outcomes of the lawsuits is uncertain and no representations or warranties are have been made by the seller.”

“The existing lawsuits render title to the unit unmarketable and constitute a cloud on title,” APB’s lawsuit states.

Last week, a jury awarded Privé Developers a $26 million verdict in one of its counterclaims against Williams Island Property Owners’ Association for breaching a 1982 agreement that it would not challenge future development on the 84-acre luxury enclave. However, in October, a judge ruled in favor of Island Estates Homeowner Association and the Clarkes in a lawsuit that alleged the city of Aventura allowed the developers to build an an illegal sidewalk that encroached on homeowners’ properties.

Since then, the plaintiff homeowners have obtained permits to demolish portions of the sidewalk that are on the utility easement in the front of their lots, APB’s lawsuit alleges. “The lack of sidewalk clearly makes pedestrian access to the North Island less attractive and limited, and it also changes the initial site plan approval for the project,” the APB complaint states.

Glen Waldman, Privé Developers’ attorney, said APB’s lawsuit has no basis in fact or law. “There is nothing that has any negative impact on the project,” he said. “This lawyer is just trying to find a way to get the client out of a contract that he entered with his eyes wide open.”

Lebensohn said Privé Developers will fight to hold APB accountable to its contractual obligations. “There is no cloud on title, otherwise the other 100-plus sold units wouldn’t have closed since December of 2017, and our construction loan would not be paid off as it was this past week,” Lebensohn said. “To the contrary, title insurance has been issued time and again without exception.”

Haru Coryne contributed reporting.

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