It is a condominium association’s version of winning the lotto.
A big bank missed its deadline to file for foreclosure on a million-dollar condo unit by 10 days.
As a result, Peninsula Condominium Association in Aventura will get to keep the condo — a fancy three-bedroom, three-bathroom bayfront pad that it took ownership of three years ago in its own foreclosure over $61,313 in unpaid fees.
“They got a free condo,” said Michael Cotzen, partner at Hollywood law firm Mansfield Bronstein, which represents the condo association. “You don’t get anything free in this world — but they did.’’
The condo association’s winning argument: The five-year statute of limitations for U.S. Bank to file for foreclosure had passed.
Miami-Dade Circuit Judge Peter R. Lopez agreed.
“We are utterly and completely delighted,” said Edward Steinberg, president of the Peninsula Condominium Association. “It’s a profoundly positive impact for the association.’’
“This is a significant loss for the bank, an example of a bank getting slapped upside the head,” said Ronnie Bronstein, a partner with Mansfield Bronstein. “I think this is an appropriate remedy in this type of situation where associations are left holding the bag.’’
The saga over Unit 2507 at 3201 NE 183rd Street in Aventura began in 2007 when Rivka Bichler fell behind on the mortgage and condo fees, according to court papers. Bichler paid $1.5 million for the 3,273-square-foot unit in the frothy days of May 2005.
In December 2009, the condo association filed to foreclose and was awarded title to the unit in October 2010.
Since taking possession, the association has rented the unit for much of the time, fully expecting the bank would eventually bring its own superior foreclosure claim as holder of the first mortgage.
“Twenty-nine of 223 units were in default at one point,” Steinberg said. “Through the legal process, we were able to rent many out, which had a profound positive impact on our cash flow. The banks were in gridlock.”
U.S. Bank, as trustee for certificate holders of Structured Asset Mortgage Investments II Inc., Prime Mortgage Trust Certificate Series 2005-4, had filed an earlier foreclosure suit on Bichler’s unit in 2008.
But the lender failed to show up for trial in February 2011, and the court dismissed the case without prejudice, meaning the lender could refile later.
According to court records, the bank was represented in that case by the law offices of Marshall C. Watson, a Fort Lauderdale foreclosure mill, whose owner last year agreed to Florida Bar disciplinary action that included surrendering his license and shutting down the firm.
When U.S. Bank finally refiled for foreclosure on Nov. 19, 2012 — claiming it was owed more than $752,000 in principal, interest and fees for its mortgage on the unit in a bid to wrest ownership from the condo association — Peninsula fought back.
Both sides agreed the statute of limitations for foreclosure actions is five years, but they disagreed over when the clock started ticking.
Peninsula argued in a motion for summary judgment that the statute of limitations began running when the bank sent the borrower an “acceleration notice” on Oct. 4, 2007. The notice warned that the total principal and interest would be due immediately if the default wasn’t resolved within 35 days.