Condo buyers remorse or exercising your legal rights in a Condo contract dispute?

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Jo Lynne Navarro wants her $270,000 back.

That's how much the Sarasota County woman paid to reserve two Bel Mare at Riviera Dunes condominium units two-and-a-half years ago. The units existed only in glossy sales brochures at the time, but Navarro - like many others lured by a sizzling condo market - was eager to buy early.

Now, units 206 and 801 in Bel Mare's second 12-story building in Palmetto are complete but empty - as are numerous others - making the brand-new building resemble a ghost tower. Navarro doesn't want the units anymore and is suing the developer because it won't let her out of her purchase contracts for $1.35 million, or return her deposits.

She has a lot of company.

Court records show discontented buyers have filed more than two dozen lawsuits against the developers of Bel Mare and two other local condo projects: The Palms at Riviera Dunes in Palmetto and The Promenade at Riverwalk in Bradenton.

Although filed in Manatee County Circuit Court by different attorneys, the suits echo each other in accusing developers of breaking purchase contracts by failing to complete the units within two years as promised.

Developers counter in court that the deals are valid because hurricanes and other forces beyond their control caused unavoidable and allowable construction delays. They also say many of those suing are reneging because their plans of flipping the units for fat profits have sunk along with condo prices.

Real estate and legal observers say the rise of "buyer's remorse" lawsuits is just the latest legal fallout from an unprecedented housing slide, which has caused this spike in foreclosures and lawsuits accusing lenders, real estate professionals and others of misrepresentation and fraud.

"This might just be the tip of the iceberg," said William P. Sklar, a West Palm Beach real estate attorney following the trend.

Lawsuits piling up

In all, various buyers have filed nine lawsuits since late 2006 against Bel Mare's developer Riviera Dunes Development Partners LLC; a dozen against The Promenade at Riverwalk LLC, developer of the condo complex of the same name in Bradenton; and four against Waterford Palms at Riviera Dunes LLC, developer of The Palms at Riviera Dunes project.

Navarro's suit, filed in July, is typical.

The lawsuit states she signed contracts Jan. 30, 2005, to buy the two Bel Mare units for a combined $1.35 million. To lock in preconstruction prices, she put down a $135,400 deposit that day and a second $135,400 deposit seven months later.

Each contract contained a clause in which the developer said it would complete the unit and have it ready for occupancy within two years ". . . subject, however, to extensions by acts of God, strikes or other causes beyond seller's control which would justify extensions under Florida law."

Neither unit was done by the Jan. 30, 2007, deadline. Three months later, Navarro told the developer she was canceling the deals because of the missed deadline and asked for her money back, the suit states.

The developer refused to release her from the contract or return the deposits, so Navarro sued for breach of contract. The developer countersued, saying Navarro broke the deals when she tried to cancel them.

Navarro and Riviera Dunes Development officials did not return telephone calls seeking comment.

The case is pending, as are nearly all the others that mirror it. One suit, against Bel Mare's developer, was dropped as part of a settlement. A judge has referred another case, this one against Waterford Palms, to binding arbitration.

Two-year clause at issue

The buyers' lawsuits focus on the two-year clause, which condo developers routinely include in sales contracts to bypass the federal Interstate Land Sales Full Disclosure Act.

The law, passed in 1968 as a consumer-protection measure, says developers who use interstate commerce - such as the mail or media advertisements - must provide a comprehensive disclosure report to buyers before they sign purchase contracts.

But it also allows developers to self-exempt their projects by making the two-year promise, which many do because it can take several months and hundreds of thousands of dollars to register under the law.

"You're in a hot real estate market. You want to get going and you don't want to be bogged down by the time and expense of these disclosures," said Sheryl Edwards, a Sarasota attorney who represents four buyers who have sued The Promenade's developer.

Developers acknowledge that, but say they don't make the two-year promise lightly. They also dispute buyer arguments that it's a hard and fast deadline.

"Normally, two years is adequate," said Mike Miller, Waterford Palms' president. "It's not meant to be a magic number. The purpose of that clause is to obligate specific performance, an assurance that the unit will be built."

Yet developers often try to give themselves some wiggle room by including factors beyond their control as allowable reasons to extend the deadline. They say that includes permitting delays, material and labor shortages and supply disruptions.

The Palms didn't get all its permits until a year after the first purchase contracts were signed, Miller said, or twice as long as anticipated. The post-Katrina rebuilding effort also caused a window shortage, prompting the developer to cancel another project's order so the window manufacturer could focus on The Palms.

"Even then, we still had to wait three months before they could get to us," Miller said. "We were sort of caught between a rock and a hard place. If the market hadn't dropped, everybody would be closing."

Shortages of PVC pipe, roof shingles and copper also slowed construction of The Promenade's first building, said Ed Vogler, a local attorney and partner in the project. Also disruptive were numerous construction shutdowns required by the state when tropical weather threatened Florida in 2004 and 2005.

So, Vogler said, he's "disturbed and unsettled" by the lawsuits - but not surprised.

"It appears to be a common thing across Florida, that people who expected to make an investment are now disappointed in the marketplace and are trying to use it as an opportunity to not fulfill the contract," Vogler said. "People should honor their commitments."

Are promises meaningless?

Buyers counter that the developers should practice what they preach.

They contend the courts shouldn't let developers get out of their two-year promise so easily. If developers have an escape hatch, the two-year promise is essentially meaningless and makes the contracts subject to the federal law, buyers say.

And if that's the case, the contracts are invalid because developers improperly used the two-year exemption, the buyers' attorneys argue.

Buyers also argue that contract provisions should allow them to cancel the deals, recover their deposits and sue for damages because of the missed deadlines.

"Because the developers chose the two-year exemption, this legal option is available to the buyers," Edwards said.

So far, only one local judge has ruled on the issue, and it was in favor of developers.

In May, Circuit Judge Peter Dubensky rejected Terry and Cindy Holinsky's motion for a judgment against Riviera Dunes Development Partners. He said hurricane-caused construction delays were acceptable under Florida law and that the federal act does not require the two-year promise to be an absolute guarantee.

But Dubensky's order does not apply to the other cases.

Although the cases generally are similar in nature, buyers' attorneys plan to pursue them individually rather than consolidating them, because each case is different.

Some deals are closing

Not all buyers have gotten cold feet or gone to court.

Miller said about half of the 46 units under contract at The Palms have closed, although deeds - the legal record of a property sale - have been recorded for only nine of them, including two eighth-floor units for which a Gulfport couple paid nearly $2 million. Only two units are occupied now.

Another dozen or so units are expected to close soon. The remainder, which include those now under litigation, likely won't close, Miller said.

"We're trying to focus now on those who want to close," he said. "A couple of others we've already let out of their contracts. We're trying to be as compromising as we can with those who are willing to compromise."

Vogler would say only that "sales are going very well" at River Dance, the first of The Promenade's three planned buildings. Yet deeds have been filed on only 17 of its 115 units, public records show.

Of the 62 units in Bel Mare's second building, just 19 have had deeds filed, records show.

But those being litigated will remain in limbo until those cases are resolved or the buyers decide to close.

Buyers and developers alike have no idea how this will end.

"We haven't had the kind of market we've had, where buyers get cold feet and don't want to buy," Miller said. "I've never seen anything like it in my 25 years in the business."

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