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Condo tiff involves timing, $100,000 deposit

A couple want out of their contract for a luxury unit, citing delays.

By PAUL SWIDER, Times Staff Writer
Published October 28, 2007

TREASURE ISLAND- Sandra and Charles Rizzo had enjoyed healthy profits from home sales in the past 11 years, so when the same builder of their million-dollar Vittoria condominium started another project, they decided to buy into the new building, live there a few years and sell it.

More than two years later, with no building to move into, they're suing developer Bob McGrath because his delays in constructing Serena Bay have broken their contract and cost them a shot at the market.

"They kept saying, 'Just another 90 days,' but it's still not done," said Sandra Rizzo, referring to a contract she said guaranteed the project would be finished in February of this year at the latest. "He's been dragging his feet and it's been virtually impossible for us to sell."

McGrath says the contract does not limit him to two years. Because Serena Bay will have just 16 units, it falls into a different legal category for construction timing, he said.

McGrath's attorney says other language in the contract "modifies" that statement, but the Rizzos' attorney says there can be no modification of such a statement.

"I don't know how you can read it any other way," said Richard Zacur, whose clients want their $100,000 deposit back.

McGrath says the Rizzos are just investors who got caught when the market went sour and are looking for someone else to cushion the fall.

"They're just trying to get out of their contract," McGrath said. "Even if it had been done a year ago, the market wouldn't have been any better."

McGrath said construction should have taken 14 months, but he had to compete for contractors and was delayed. He said his actual construction time will be about two years, but not from the date the Rizzos' contract was signed.

Sandra Rizzo says they did intend to live at Serena Bay, which is why they spent extra money for special finishes and a 31/2-car garage beneath the building.

"We put all our equity in that place," she said. "Now we're in just a plain old, ordinary house."

Sandra, an accountant, said she became a Realtor so the couple could buy and sell their own homes to make some money. They only overlapped once, in this latest transaction, when they bought new before they sold the old.

The couple bought their first home, in Palm Harbor, in 1996 and sold it five years later for $280,000, nearly $100,000 more than they'd paid. They then bought a condo in Madeira Beach for $385,000 and sold it three years later for $764,000. Riding that tide of 2004, they bought into the McGrath-built Vittoria for $1.135-million in September, four months before signing a $925,000 contract at Serena Bay.

Rizzo said she and her engineer husband realized a year ago that McGrath wouldn't be done on time, so they bought a $600,000 Palm Harbor house in July 2006 to live in while they shopped their Vittoria condo. She said a million-dollar property has to be ready instantly, so they had to get out, but the Vittoria unit didn't sell until June 2007, for $1.45-million.

"You figure you're going to be making some money on what you sell, and that eases the burden of the next property," she said. "We assumed we would make a significant amount of money, but we did not."

Rizzo said the Serena Bay deposit is not crucial to pay bills, that it came out of earlier profits, but that doesn't mean they should be stuck waiting while McGrath dawdles.

"We're just normal working people; $100,000 is a lot of money for us," she said.

McGrath said he purposely tried to avoid selling to investors. He said most of his buyers plan to live in the project and some are starting to move in to one of its two buildings.

Zacur, the Rizzos' attorney, said it all comes down to legal language. The language is the responsibility of the contract writer, not the signer, Zacur said, adding: "I recommend he just pays it."

Paul Swider can be reached at pswider@sptimes.com or 892-2271.

[Last modified October 27, 2007, 23:04:58]