Judge Rules Against Beach Condo Board That Balked
Daily Business Review
Carla Vianna
02 August 2016

3621 Collins Ave, Miami Beach    Credit: Google

A rundown beachfront property waiting for redevelopment may soon turn from eyesore to tourist destination in one of Miami Beach's most happening areas.
Nestled between Collins Avenue and the Miami Beach Boardwalk, the All Seasons Condominium has dangled between a prospective buyer, who put a $7.3 million offer on the table in 2010, and a condominium association that blocked the nearly completed deal a year later.

Simon Nemni, whose $7.3 million bid won unanimous approval from the condo board six years earlier, won a favorable outcome after a 5-day trial in April.

All Seasons Condominium Inc. and the association's president, former White & Case attorney Pedro Dedesma, breached the purchase agreement by failing to "use best efforts" in gaining unit-owner approval to sell all 106 condos and by improperly ending the agreement after a severe case of "seller's remorse," Miami-Dade Circuit Judge Rosa Rodriguez wrote in a July 25 order.

Patrician Hotel LLC, a company created by Nemni to purchase the building, sued for specific performance against Dedesma, the condo association and all unit owners Jan. 12, 2012, a month after the condo board voted to halt the sale.
The decision launched a four-year dispute between the prospective buyer, the condo association and a prominent South Beach hotel group that planned to redevelop the property.

The dated condo property at 3621 Collins Ave. has been in violation of the city's building code for at least eight years

The dated condo property at 3621 Collins Ave. has been in violation of the city's building code for at least eight years, according to the order. The pool and elevator were out of service, the sixth and seventh floors were uninhabitable and condemned, and the property was hit with over $500,000 in code violations.

None of the owners occupied units, but they collected rent from tenants living there.

The All Seasons association had unsuccessfully marketed the property for sale since 2008. When Nemni bid in 2010, the association promptly agreed to a deal.

It took about a year for Nemni, with the help of the association, to gain sale approval from each owner, which the contract required before closing.

the association wanted to back out of the agreement

But when the association learned Nemni had agreed to sell to a developer for a hefty profit, the association wanted to back out of the agreement.

Nemni cut a deal with Alan and Nathan Lieberman, principals of the South Beach Group Hotels Inc., which owns at least a dozen boutique hotels in Miami Beach, in November 2011—a month before he received full approval to buy all of the units. The hoteliers agreed to pay Nemni $10.9 million, or $3.6 million more than what Nemni was paying its unit owners.

The defendants argued Nemni misrepresented his source of funding when the money was coming from the Liebermans, justifying cancellation of the contract.

"Immediately upon learning that Nemni would make a profit of $3.625 million from the Liebermans' involvement in the deal, Dedesma and the board became afflicted with a sudden and severe case of buyer's (in this case, seller's) remorse and immediately began attempting to undermine the transaction in order to take some of Nemni's profits for themselves and other unit owners," the order stated.

At trial, the defendants unsuccessfully argued seven contracts signed by unit owners were defective.

"The president of the association thought he could make more money by killing the deal," said Gary Phillips, managing partner with Phillips, Cantor, Shalek, Rubin & Pfister in Hollywood. Phillips and equity partner Jeffrey Shalek represented the Liebermans.

the association and association president are liable for any damages to the hoteliers

The court found the unit owners must sell their property to Nemni, he must sell to the Liebermans, and the association and association president are liable for any damages to the hoteliers due to the interference with the sale agreement, Shalek said.

Phillips said the Liebermans plan to convert the property to a hotel. The family owns and operates the Hotel Croyden across street, which they also renovated.
"You're going to have a beautiful hotel operating on the property that is now somewhat dilapidated and in need of much repair," Phillips said.

"It's a good win for the party, and it's a good win for the city of Miami Beach," added Shalek. "It's a section of the beach that needs to be improved."

Omar Ortega, founding partner at Dorta & Ortega in Coral Gables, and associate attorney Rosdaisy Rodriguez represented the defendants. Alice K. Sum, a shareholder with Fowler White Burnett in Miami, represented the condo association. The attorneys did not respond to requests for comment by deadline.


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