Florida Developer Hit with 3 More Lawsuits in 10 Days as Buyers Demand Deposits Back

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There's a buzz in Boca Raton, but not the kind you’d expect for a luxury development. The highly anticipated Mandarin Oriental Hotel and Residences is facing some serious backlash as frustrated buyers are now taking legal action, demanding their money back after years of waiting.

It all started when Frank and Nancy Scala decided they’d had enough. Back in June 2021, they made a hefty $1.28 million deposit on what was supposed to be their dream condo, a $4.1 million unit in the posh Mandarin Oriental. Fast forward to August 3rd, 2023, and they filed a lawsuit against the developer, Penn-Florida Cos., because the unit is still nowhere near ready. The Scalas want their deposit back, plus interest and legal fees, arguing that the developer missed the promised deadline of June 30, 2024.

They’re not alone in their frustration. Just a couple of weeks later, Robert and Brenda Needleman joined the legal fray. Their story echoes the Scalas’: in 2019, they placed a $1.76 million deposit on a $5.8 million condo, expecting to move in by the same June 30 deadline. With no sign of completion in sight, they too want their money returned.

And it doesn’t stop there. On August 23rd, Blaire Properties LLC also filed a lawsuit against the developer, this time over two deposits totaling more than $1.3 million. These deposits were originally made by other buyers in 2020 and later assigned to Blaire Properties. Again, the complaint is simple: the developer didn’t meet the promised deadline, and they want their investment back.

Attorney James Ferrera, who represents all three parties, didn’t mince words when talking about the situation. According to him, his clients might have been willing to wait if the project appeared to be making significant progress. But that’s not the case. “That concrete shell went up two years ago, and it still doesn’t have windows and doors,” Ferrera pointed out, emphasizing how vulnerable the unfinished structure is to the elements.

This isn’t the first time buyers have tried to pull out of the Mandarin Oriental project. Just last month, two other buyers also sought refunds but later dropped their lawsuits. It’s clear that the ongoing delays are causing widespread frustration.

So, what does the developer have to say about all this? Penn-Florida Cos. insists that despite the setbacks, construction is still moving forward. They acknowledge the challenges that have come their way, particularly due to the Covid-19 pandemic, but they remain committed to completing the project. The company has already started stucco work, and they’re working on finalizing the building’s exterior before diving into the interior finishes.

In a statement, Penn-Florida emphasized that most future residents are still excited about being part of this high-end development. They acknowledged that some buyers' circumstances might have changed over time and assured that they are doing their best to accommodate these needs while honoring all purchase agreements.

Boca Raton attorney Bob Sweetapple, who is representing Penn-Florida, defended the developer’s actions. He pointed out that the contracts include provisions for “force majeure,” which cover unforeseen events like the pandemic. He also explained that the Mandarin Oriental project is much larger and more complex than a typical condo, requiring more materials and time.

This ambitious project, which was first announced back in 2015 with an expected completion date of 2017, has certainly had its share of ups and downs. The development will eventually include 163 hotel rooms and 85 luxury condo units, and it’s been a significant undertaking for Penn-Florida. In 2019, they secured a $225 million construction loan, and just recently, they refinanced with a $270 million loan from Madison Realty Capital and Apollo Global Real Estate Management.

But as attorney Ferrera aptly noted, “Five years is a long time to be without a significant amount of money.” And for the buyers who’ve been waiting with bated breath, that time has been more than enough to test their patience.

As the lawsuits unfold, it’s clear that the delays at the Mandarin Oriental are not just a construction issue—they’re a financial and emotional strain on those who’ve invested in what they believed would be their slice of paradise.