Fractional Ownership News

London buyer sues US fractional developer

A British buyer of a fractional ownership interest at the Dancing Bear resort in Aspen, Colorado, is suing the developer over a settlement agreement that allowed him to break his contract and get around 60 per cent of his deposit back, reports The Aspen Daily News.
 
Unusually, the project developer said he agrees that the plaintiff should be paid, but said a bank that has loans out on the property and is taking legal action against the developer is the only thing standing between the plaintiff and his money.
 
Londoner Sundip Vyas signed contracts in July 2007 to purchase two one-eighth interests in units at the Dancing Bear, a luxury residence club in downtown Aspen. Each fractional interest had a purchase price of $730,000, with Vyas putting down $73,000 deposit on each.
 
By last summer, Vyas was seeking to get out of the contracts, citing a federal consumer protection law called the Interstate Land Sales Act. Under ILSA, buyers have two years from signing to break their contracts if certain documents pertaining to the layout of their properties were not filed by a certain time. The lawsuit claims that Dancing Bear developers failed to file documents recording the units in question.
 
According to the complaint, Vyas and Dancing Bear developer Tom Divenere began settlement negotiations on July 1. In December, Divenere agreed to release Vyas from his contracts and return $45,000 on each sale, totaling $90,000 out of $143,000 deposit money. The lawsuit claims the plaintiff has not seen any of these funds.
 
Divenere said that Vyas should be paid. “He’s suing me but I agree with him,” Divenere said, noting he signed the settlement agreements. “I don’t have a dispute with him.”
 
On Oct. 19, West LB, a German bank which is the senior lender on the Dancing Bear, entered a notice of default against the development, citing unpaid loans of $58 million that had come due.
 
The bank blocked the title company — Land Title Guarantee Company of Aspen — which is holding the earnest money in escrow, from releasing the funds to Vyas, Divenere said. “It’s another example of the bank getting in our way.”
 
Las week a judge placed the Dancing Bear — both the completed phase one and the stalled construction of phase two — in receivership as a result of the unpaid balance. Divenere says negotiations on restructuring the loan are ongoing. Meanwhile, James DiFrancia of Aspen has been appointed receiver on the property and is overseeing day-to-day operations (see related story).

www.aspendailynews.com

www.dancingbearaspen.com

19/03/10

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