Jilted Buyers Fight for Their Miami Condos

The Miami condo market is generating a lot of money for developers and speculative investors , but, as with any multi-million dollar business, it is also generating a lot of complaints.

Miami condo buyers are increasingly accusing developers of backing out of sales contracts when they find buyers who are willing to pay more for the same unit. One example of such accusations is Miami Beach´s Deauville Hotel, which is currently undergoing a condo-hotel conversion. Buyers filed a suit against developer Homero Meruelo alleging that Meruelo breached the sales contract "by unilaterally rescinding pacts with buyers" when his Miami condos appreciated in value.

Market watchers believe there are two primary reasons for the escalation of such suits. The first is that developers are getting greedy. They want to take advantage of skyrocketing values and the public´s willingness to spend an ever increasing amount on Miami condos. The second factor is the sharp jump in construction costs. "The cost increases are drastically reducing or even erasing developers´profit margines and fueling incentives to cancel contracts to resell for higher prices."

The outcome of each individual legal battle over Miami condos will depend on the terms of each contract.