March 14, 2009 - The Resort & Club at Little Harbor, Ruskin FL

The Resort & Club at Little Harbor called for hundreds of homes, a hotel, convention center, golf course, yacht club and water park.

The master plan never was finished, and now 17 prospective buyers have sued to get their deposits back

Buyers Sue Resort & Club at Little Harbor

Those "Little Harbor Lifestyle" smiles are gone now...

It was 2004 and Florida's real estate market was sizzling. A 367-acre development in Ruskin promised a piece of paradise.

The Resort & Club at Little Harbor called for hundreds of homes, a hotel, convention center, golf course, yacht club and water park. But in the middle of construction the market tanked, and the developer scrapped many of the amenities.

The master plan never was finished, and now 17 prospective buyers have sued to get their deposits back. In addition, the developer faces foreclosure lawsuits from lenders and the Community Development District set up to pay for infrastructure such as roads.

The buyers say the developer should have returned their money when it failed to complete the condos within two years, as their contracts stipulated. Instead, they say, they were tricked into signing new contracts.

"When you go through life and screw up, you live with that and learn from that," said Wayne Taylor, 64, who took $81,000 out of his retirement account to put down on a $662,400 condo. "But when someone sits in front of you and lies to your face, that really ticks you off."

The developer, Bahia Sun, and its parent company, Fort Myers-based EarthMark, did not return repeated phone calls for comment.

Jason Himschoot, an attorney with the law firm Becker & Poliakoff in Fort Myers, represents the buyers. His clients made deposits ranging from $45,000 to $100,000 each, he said.

"The developer ran out of gas, and we understand that in this real estate market," Himschoot said. "But these people feel they were treated unfairly. They just want their money back."

Among the lawsuits' complaints:

•Shortly before the developer's two-year deadline to complete the condos, buyers were contacted by the sales manager and asked to sign two new documents. One was a reaffirmation agreement that would give the developer two more years to finish construction; the other was a termination agreement that would cancel the original sales contract.

Himschoot says buyers agreed to give the developer more time because the developer offered to find other buyers for their properties. The clients were told they would receive their deposits plus a hefty termination fee once their properties sold.

"Why would you sign that the reaffirmation agreement if you weren't getting anything in return?" Taylor said. "We were duped."

The developer never signed the termination document and instead asked the buyers to close on the condos when they were completed. The buyers say they didn't receive the deposits or the termination fee they were promised.

•Amenities such as a water park and golf course weren't built, even though brochures and advertisements promised them. The buyers say they would not have purchased without those luxuries.

•The buyers weren't informed when they signed original contracts that the development would include a Community Development District, which charges extra taxes for infrastructure such as roads.

The developer filed a response to the lawsuit and said the termination agreement isn't valid because the developer didn't sign it. Also, it was the company's policy not to sign that document until other buyers were found for their units. That didn't happen, the court filing states.

As for the amenities, Bahia Sun says the purchase agreement states that the developer is responsible only for what is detailed in that agreement and all of those amenities aren't spelled out in the contract.

Meanwhile, the South Bay Community Development District is seeking to foreclose on the property. Bahia Sun stopped paying the special assessments last year and owes millions, said attorney David Smith, who represents the CDD for Gray Robinson Attorney at Law in Tampa.

Lenders are suing for foreclosure, too, but the CDD trumps them, Smith said. If the CDD takes the property, the lenders won't get paid.

That threat, he said, could be good for the overall fate of Little Harbor.

"I think the lenders are evaluating their options," Smith said. "It wouldn't take much for the lenders to pay the assessments for now to bring them current. That would protect their investments."

But that doesn't help the condo buyers who have lost their deposits, said Tom Dalton, one of the buyers suing the developer.

"I wanted this condo because of the golf course and boating," Dalton said. "They didn't do what they promised, and I just want my money back."

Original Story - TBO.com - Tamba Bay Tribune