A judge tossed a lawsuit filed by condo owners at the Fontainebleau Miami Beach over short-term rental rules.
Judge Peter R. Lopez determined a group of unit owners at the two condo buildings at the Fontainebleau resort have no standing to sue, according to Law.com. Although Lopez didn’t explicitly say so, the decision may have stemmed from the condo associations’ failure to include a pair of settlement agreements –– which were the crux of plaintiffs’ arguments –– into the associations’ governing documents.
Six unit owners at the Tresor and Sorrento condo-hotels sued the Fontainebleau Miami Beach and two of its affiliates in March. The resort, consisting of a historic 1,504-room hotel at 4441 Collins Avenue, is owned by billionaire Jeffrey Soffer’s Aventura-based Fontainebleau Development. The Tresor and Sorrento condo-hotel buildings, which have 748 units combined, are at 4401 and 4391 Collins Avenue.
About 674 owners are enrolled in the resort’s rental program, meaning the Fontainebleau leases these units, while the rest can rent out their condos on their own using short-term rental platforms such as VRBO.
In their complaint, unit owners alleged violations of the longstanding settlements that include clauses stating that condo owners who rent out their units on their own can do so “without interference, restriction, limitation, fee or cost imposed by the hotel unit owner.”
But the agreements aren’t enforceable because neither the Tresor nor the Sorrento condo associations voted to incorporate the settlements in their declarations, Fontainebleau’s attorneys argued.
“Not in a million years did we think that they were going to say the settlement agreement signed by their parties — which they have abided by for 20 years, they were going to say that they’re not applicable,” Matthew Estevez, the condo associations’ attorney, said during the hearing, the publication reported.
The ruling was unexpected, and plaintiffs and their attorneys have to go back to square one to determine how to continue their suit, Estevez said.
In their complaint, the six unit owners argued that Fontainebleau is pressuring them to use the in-house rental program by implementing regulations for them to lease out their condos on their own. These unit owners now have to be physically present or use an approved agent during guest check ins, pay higher housekeeping costs and are barred from using the Fontainebleau name to market their units without approval.
The owners’ emergency motion to stop these regulations failed.
Fontainebleau has said these rules are for the health and safety of staff and guests, and that non-program users don’t have to pay the housekeeping costs.
Across South Florida, condo-hotels are a common mixed-use development, often carrying a brand name such as the W Hotel, Four Seasons, Carillon and Mr. C.
Sean Burstyn, the Fontainebleau’s attorney, told the publication that new condo-hotels in the pipeline “would benefit from incorporating” the Fontainebleau’s litigation arguments in their declarations.