Florida Condos Could Soon Appear in Foreclosed Home Search
Condos in the 420-unit CityPlace South Tower in the central area of West Palm Beach, Florida could soon appear in foreclosed home search after the Bank of Nova Scotia foreclosed on the developer of the condo complex, CityPlace South Tower LLC.
According to the firm Related Group, parent company of developer CityPlace, the foreclosure filing was a friendly foreclosure action to protect condo buyers and prospective unit buyers.
Bank of Nova Scotia and its partners lent $134.7 million in 2006 for the construction of the condo complex. The total loan should have been repaid last month.
The fate of the CityPlace condo complex illustrates the difficult situation of condo and other residential developers that overbuilt during the housing boom. The low prices of single-family properties in foreclosed home search lists shifted buyers’ attention away from the condo market.
Despite the prospect of CityPlace condo units being found through foreclosed home search, the condo units are complete and well-maintained, according to Barbara Salk, senior vice president of The Related Group. She said that The Bank of Nova Scotia and The Related Group have agreed to work together to protect the interests of condo buyers.
A consortium of banks, led by Bank of Scotia’s subsidiary Scotia Capital, will acquire the titles of all unsold condo units.
However, The Related Group remains overall manager of the condo complex, in-charge of further development and maintenance, including the sale and leasing of condo units.
Real estate analysts in Florida said the agreement between the CityPlace developer and the lenders is exemplary because it prevented courtroom fights that often lead to the deterioration of properties in foreclosure.
A real estate adviser involved in the sale of the condo project said the condo units will be sold individually and will not be sold through bulk sales. He said the developers would have more control over the overall outcome of the project if the units are sold individually.
Aside from CityPlace, other condo projects may appear in foreclosed home search soon if the economy does not improve soon. These include Two City Plaza of Kolter Homes, City Palms of H&H Development and Icon Brickell of The Related Group.
All in all, condo units in CityPlace South Tower may appear in foreclosed home search lists, but buyers are assured that they are well-maintained because of the exemplary cooperation between the developer and the lenders.
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