Buyers file suit to back out of condo deals before completion

The housing slump, they say, has eroded top-dollar values.

By James Thorner, Times Staff Writer
Published June 2, 2007

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In what could be a sign of things to come in the sluggish housing market, a prominent Tampa condominium project faces 34 lawsuits from buyers trying to back out of their deals.

The Place at Channelside, along with about a dozen other condo projects, has led a residential renaissance of the city. But unlike some pie-in-the-sky deals like Trump Tower Tampa, the Place at Channelside is weeks from completion.

That's the problem: Some buyers who paid top dollar in 2004 and 2005 are afraid to take possession of what they fear is a depreciating asset in the housing slump.

"They locked in at the height of the condo boom and the units are not worth what they paid, " said Tampa lawyer Harry Coe, who represents seven buyers.

Coe's clients put down deposits from $35, 000 to $40, 000. To justify the 11th-hour jitters, buyers have invoked a federal law requiring completion of condos from two years of the contract date.

Key Developers Group started construction in April 2005 on the 245 units in two, eight-story buildings at Channelside Drive and Washington Street. Buyers sued after the two-year deadline expired.

Developer Fida Sirdar said construction was knocked off schedule by Hurricane Katrina, a PVC pipe shortage and soil problems. Condos, which cost about $180, 000 to $1.5-million, start closing June 18.

Sirdar blamed the suits on a small group of buyers acting in bad faith. "They will either have to buy or forfeit their deposits. It's as simple as that, " he said.