A Palm Beach Shores property that is currently under development to become a condominium has been hit with a $5.5 million foreclosure lawsuit due to the borrower allegedly defaulting on the loan and failing to pay Florida property taxes.
The property under development is a 3.4 acre lot located at 150, 200, and 206 Inlet Way in Palm Beach Shores. It currently houses three multi-unit residential buildings with 23 individual apartments total and was approved for a Skyfall Ocean condominium with 15 units. It was purchased in 2019 for $6.5 million, with a $5.5 million mortgage.
The foreclosure lawsuit was filed on January 6, 2020 by Fryd Mortgage against multiple defendants: Skyfall Ocean 150 LLC, Skyfall Ocean 200 LLC, Skyfall Ocean 206 LLC, and loan guarantors Jay Duetchman and Robert S. Castellano.
The suit alleges that the borrower did not pay property taxes or make the required mortgage payment on December 1, 2020, therefore defaulting on the loan. Six of the condo units have been sold already at prices between $1.78 and $3.9 million.
The defendant alleges that the mortgage payment has been delayed due to expecting to receive another construction loan in the amount of $20 million, however, the closing date wasn’t scheduled until December 31st. The defendant planned to use the second loan to pay off the initial $5.5 million loan.
How Litigation Can Help You Collect After Nonpayment
Filing a lawsuit can help you collect money you are owed in a real estate transaction if the other party has not paid by the agreed upon date. This is often the best way to protect your interests, even if the other party makes promises to pay.
In the above lawsuit, the defendant took out the $5.5 million loan knowing that they would not be able to pay it back before they received funds from another loan after the first payment for the first loan was due. By filing a lawsuit, the plaintiff is preparing for the possibility of the defendant being denied the second loan and not having the funds to meet their already established financial obligations.
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