Buyers Remorse Strikes Florida Condo Speculators

Daily Real Estate News: October 25, 2007

Buyers Remorse Strikes Florida Condo SpeculatorsAs many as 60 percent of buyers who signed a contract in 2005 to buy a new condo in Florida would now like to wiggle out of the deal, estimates Gary Poliakoff, an attorney who represents a dozen South Florida developers in a variety of suits filed by reluctant buyers.John Mike, chairman of the REALTORS® Association of the Palm Beaches, said people who had no intention of living in their properties are filing the suits."A lot of those condos were bought by speculators with the same business plans--to flip their properties--and unfortunately that has created a glut of units. Now we're seeing a large number or people trying to get their money back by hiring lawyers," Mike says. Most of the lawsuits filed in Florida since the real estate market downturn still are making their way through the courts. They typically seek redress for what the court papers describe as fraud: inducement, negligent misrepresentation and breach of contract. Other cases hinge on technicalities. A suit in Broward County Circuit Court seeks an injunction to prevent a condo from closing because developers failed to comply with a federal law that requires them to register their developments with the U.S. Department of Housing and Urban Development. "The claims and the suits are, namely, a means for an end for investor-buyers to get out of deals where they weren't able to realize the profits they expected, but it doesn't mean the reasons are legitimate," Poliakoff says.

Source: South Florida Sun-Sentinel, Jennifer Gollan (10/24/2007)