Miami Beach seller says Aqua condo board targeting his luxury unit
06/18/2013 12:00 AM
06/18/2013 1:26 PM
When rich condo owners fight it out over money and property, it’s not a pretty sight.
The ugliness — a sliding condo market, mystery phone calls and accusations of fraud — belies the beauty of the backdrop: a condo development called Aqua nestled along Indian Creek in Miami Beach. The tangle over unit 902 is playing out in the legal system, costing both sides thousands of dollars.
At issue: whether a condo association has the right to stop a short sale and try to buy the unit itself.
The story begins in 2005 when New Yorker Philip Shapiro purchased the Aqua unit for $1.84 million, at the height of the real estate boom. Shapiro put an additional $500,000 into the three-bedroom, four-bathroom condo with an Intracoastal view, adding custom lighting and limestone floors to compliment balconies that wrap around the unit.
Shortly after, the housing bubble burst, the market crashed and the U.S. economy dipped into the worst recession since the Great Depression.
The price of Shapiro’s condo dropped to half of its pre-recession value. He quickly took the route that most sellers followed at the time — suck it up and try to sell for less than its worth.
In September 2011, Shapiro was ready to close on a $800,000 sale, but his condo association board stalled on approving the deal. Excuses poured in: there was an unpaid application fee; the Rosh Hashanah holiday interfered; there was a death in the family of one of the board members.
Pressed by the lender to close by a certain deadline, Shapiro decided move forward without board approval. He thought approval would be imminent, he said.
Four days after closing, Shapiro’s real estate agent received a call from a mysterious number. The caller expressed interest in buying the unit, but the agent, Linda Schechter, told the man it was already sold. The caller became angry, telling Schechter he knew fraud was involved.
Shaken, Schechter looked up the number and traced it to Jonathan Sullum, the husband of condo association board president Vicki Sullum. The Sullums own a unit adjacent to Shapiro’s and a broker showed the property to Vicki Sullum earlier that year.
“When they called, they didn’t know we closed,” Shapiro said of the incident. “They thought the bank killed the deal.”
The next day, Shapiro received a letter from the board saying it would not recognize the sale. A month later, the board sued Shapiro and the buyer, seeking to have the sale voided and to order Shapiro to sell the unit to the association for $800,000.
Shapiro hired his own lawyer and the battle was on.
Since then, Shapiro reversed the sale of his unit and now has two years to pay back the buyer. Meanwhile, the condo association is seeking $200,000 from Shapiro to cover its legal fees.
The parties are in settlement negotiations.
Shapiro says he is surprised how the situation unfolded, something he calls a blatant misuse of the board’s power. He expected the board to drop the case against him when he produced phone records showing that Vickie Sullum had called about the sale and was possibly blocking it because she had indicated interest in purchasing his condo.
“After that, you would think they would give it up,” said Shapiro from his New York home. “Because they were caught, they were exposed. Instead, they go full throttle. They sue me.”
Shapiro said he had no indication the condo association originally intended to buy his unit, because that would have required all owners to vote for it. Instead, Shapiro claims that Sullum may have hoped to block the sale, then purchase the unit for herself, Shapiro claims.
Sullum declined to answer questions about the lawsuit or the case. Two other board members, Richard Toledo and Marian Davis, did not return multiple phone calls seeking comment.
Shapiro suspects his situation isn’t an anomaly and other condo associations likely overextend their authority for personal gain, he said.
“I think it affects a lot of people,” Shapiro said. “It’s a great example of a board overstepping its boundaries, getting corrupt and greedy. It’s an outrage,” he said. “What does the average person do who doesn’t have the means to fight, who is mistaken about the condo’s authority?”
There is not a way to tell how often a condo board takes action against a condo owner who tries to sell without board approval, according to Samantha Stratton, spokesperson for the Florida Department of Business and Professional Regulation. The agency does not require condo associations to report lawsuits, she said.
In May, thanks to a recovering economy, Shapiro placed the 2,395-square-foot unit on sale for $1.95 million – roughly its pre-recession value.
This time around, Shapiro hopes that the property will sell without interference from the condo association.
“If they try any shenanigans again, then we’ll go before a judge,” Shapiro said.
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