Just how did a group of Israeli investors get stuck with 114 condo units in this quaint converted apartment complex in League City? And why are they now suing the project’s developer and property manager?
The Galveston County Daily News‘s Laura Elder explains:
The investors never intended to live in the units but instead were seeking to generate income by renting them to others, according to the lawsuit. Through agreements, the units owned by the investors were put in a rental pool managed by the defendants, according to the lawsuit.
But while Westcorp Management Group, of which Roni Amid is vice chairman, had been collecting rent from tenants, it failed to pay proceeds to the mortgage company or the investors for some units, according to the lawsuit.
Without rental income, some of the investors are unable to pay their mortgages, leading lenders to begin foreclosure proceedings on at least 30 units in the complex, said Danny Sheena, a Houston attorney representing investors.
The suit also claims the defendants used the investors’ units at the Fairways at South Shore as collateral for a $23 million loan from Deutsche Bank obtained behind their backs last August. Which means, the suit claims, the investors can’t sell their units.
And that Israeli connection? Looks like it’s all in the family:
According to the lawsuit, defendants enlisted the aid of an Israeli company, Founders Israel, to recruit Israeli investors. The sole manager of Founders Israel is Tanya Amid, a defendant in the lawsuit, who is the wife of [Westcorp Management Group’s] Roni Amid, according to court documents.
Roam Development converted the complex, at 3045 Bay Dr. in League City, in 2005. With a cute little sales video to promote a property just steps from the crystal-blue waters of Clear Lake, who wouldn’t want to buy in?
What do they mean there’s no way out?
How about taking a bath in this model unit?
Westcorp Management Group, part of a Nevada-based development firm, runs 3 apartment complexes in Houston: Avalon Square on Westheimer near Kirby, the Steeples Apartments on Kirkwood, and the Brickhaven in Fondren Southwest.
- Condos embroiled in litigation [Galveston County Daily News]
- Condo Conversion Gone Wrong [Jeff Bulman]
- The Fairways at South Shore [Founders Developments]
Photos of the Fairways at South Shore: Apartments.com