Condo Owners to Pay For Developer’s Mistakes

Condo owners in Las Vegas might have to pay for developer’s monetary mistakes
Condo owners in Las Vegas might have to pay for developer’s monetary mistakes

RISMEDIA, August 29, 2006?(MCT)?Nearly 200 luxury condo owners in the first tower at Turnberry Place, including “Six Million Dollar Man” Lee Majors, may have a mechanics lien filed against them, which would sully their credit record and tie up any sales of their units.

Attorney Brian Berman said his client, drywall contractor Malco, is owed about $3 million by Florida-based Turnberry Pavilion Partners in a case that was decided in District Court last year. Judge Valorie Vega signed the findings of fact and conclusions of the judgment in July awarding Malco the money for work on tower one.

Berman said Turnberry refuses to pay the judgment.

A mechanics lien foreclosure will be filed against each of the owners, with the proportionate share of the judgment divided equally, Berman said.

“I fear and suspect this will show up as a black mark on the credit of 186 owners and I wonder if attorneys for Turnberry told unit owners this is what’s going to happen,” he said.

Turnberry has decided to appeal the court’s decision.

“The first step in the appellate process was the filing of the entry of judgment by Malco,” Turnberry general counsel Mario Romine said. “For reasons that have never been shared with us, Malco decided to delay the entry of judgment in this matter for more than a year. Now that judgment has been entered, there is an automatic stay in the case to allow Turnberry the necessary time to file its appeal.”

Turnberry will continue to comply with necessary deadlines prescribed by law in the appellate process, Romine said.

Berman said he does not think that any of the owners have been informed of the judgment, nor does he think Turnberry has their permission to appeal the verdict.

Turnberry’s attorneys have a conflict of interest because they represent both the developer and the homeowners, he said. They’re putting the developer’s interests ahead of the condo owners.

“Homeowners would say, ‘I don’t care if Turnberry lost money on this.’ Turnberry says, ‘We don’t want to pay. We’ll appeal,’ ” Berman said.

Several other lawsuits were filed, most of which have been settled with Malco prevailing on the merits of its case.

Penny Perez, daughter of Malco owner Sal Scialabba, said the 25-year-old business was toppled by Turnberry’s refusal to pay for change orders, loss of production and overtime work.

“The project was really mismanaged,” she said. “There were huge obstacles to overcome. The main problem was their architect from Florida had no idea what the county (building) codes were in Las Vegas. Plans were drawn simply wrong. They wanted their schedule. They wanted to sell these units. We were told to go without the information to build.”

Turnberry is fighting other litigation. The homeowners association in tower one filed a $21 million construction defect lawsuit against Turnberry Pavilion Partners in 2004 alleging rain and wind intrusion into their million-dollar condo units on Paradise Road.

A Turnberry resident who requested anonymity said the defects date back to 1999, when the first tower was built. The defect allegations are primarily related to exterior finish and interior surfaces.

Also, condo buyers at Krystal Sands, a failed high-rise project that Turnberry bought for about $90 million, have brought a class action lawsuit against the developer for breach of contract.

Distributed by McClatchy-Tribune Business News.

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