W Hotels, a chain so chic it needs but a single letter to identify it, finally came to South Beach last fall, but now owners who bought condos in the complex allege they were deceived and want their deposits back.
Potential owners were told there would be larger units, additional condos, and a second pool (because what a complex directly on one of the Atlantic Ocean's nicest beaches needs is two pools). According to the South Florida Business Journal, a lawsuit has been filed by Kamyar Kadivar and three other buyers, alleging the number of planned residential units was downsized from 523 to 411 without notice. The total number of condos is used to calculate the maintenance fees owed by individual owners.
A separate lawsuit alleges the buyer received a smaller unit than he was promised,= and that plans for a second pool and more landscaping were scrapped without notice.
The owners involved in the first lawsuit are trying to get back their deposits, which they put down in 2006 when the local real estate market wasn't in a total free fall.
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The average price for a condo in the W is $1.8 million, and as of January, only 42, or about 10 percent, of the condos have closed.
"The biggest problem at the W right now is the values have declined so substantially, and nobody will lend on that," attorney Dennis Freeman told Biz Journals.
Similar problems face the W's neighbor, the Gansevoort South, and slow condo sales might lead to the property being taken over by creditors and the hotel management contract being awarded to a new firm.
[SFBJ: W South Beach deception alleged]