We haven’t had a chance to review the full legal complaint for the class action suit concerning the Beacon (pdf available over at SFCondo), but here’s what we know:
1. Depending upon your perspective, there are either twenty-two heroes/heroines or goats (i.e., the plaintiffs)
2. According to Damion, many of the homeowners “were out of the loop on the whole thing,” and others “who were feeling litigious last week are starting to have second thoughts….”
3. And while we know that litigation hinders resales (and refinancing), we have a funny feeling that the now public record of defects, complaints, and accusations might be just as damaging (at least in the short-term).
UPDATE: Did anyone attend the special homeowners meeting last night (8/22)? Care to comment?
∙ What’s Happening At The Beacon? [SFCondo.org]
∙ A Big Bad Lawsuit At The Beacon [SocketSite]
Sucks to be a Beacon owner… then again, these condos are like the .com boom/bust all over again… it’s about making something which looks sexy, but is cheap to make… then flip.
Me: I’m in a 1914 Edwardian and love every minute of it. Why move to San Francisco, then shack above a grocery store in a bad hood… not to mention, the noise/riff raff from the train station/freeway.
My husband and I looked at the Beacon last year. Something just didn’t feel right. They couldn’t tell us what the dues were going to be (big red flag) and it was clear that the materials they used in the units were more suited to rentals (think cheap, cheap, cheap). The sales rep told us that the Beacon allegedly was initially built to be apartments in the first place. I’m not surprised that there are now problems with quality and differences of opinion with square footage. I’m glad we didn’t buy there.
Kristian, if you want to avoid noise/riff raff than SF is the wrong city for you all together.
How do you make a complex as massive as the Beacon feel like anything other than an (upscale) apartment building?
Lived there (the 250 King building) for a year when they were rentals known as “Mission Place”. The management did absolutely nothing in response to many, many complaints about the heat / ventilation problems. Some nights it was so warm that it impossible to sleep.
Still, it is funny that no one seemed to have any complaints about construction qaulity until the market for “condo-partments” turned south.
Definitely not good for Resales, unmotivated buyers have another reason to stay away. The Beacon will have to fight it out as value proposition from here on out I fear.
Man, I hope the Bedi corporation doesn’t go bankrupt. How many apartments did they purchase and for how much? Did the whole extended family move in?
They’re also suing their own homeowners association. How does that work if they get a judgement against them? Do hoa’s typically carry “errors and omissions” insurance for such eventualities?
HOAs do carry insurance policies. And the directors are typically imdenified against any wrong-doing/etc. So the money comes from the insurance company on a successful judgement.
I was at the meeting last night and am a homeowner at the Beacon. The issues are essentially:
– Lawsuit filed by an overly litigious lawyer who makes a living going around filing these lawsuits. He works on contingency trying to make his money by taking 40-50% of the cash settlement. He sounds like a real scumbag. He prematurely filed a lawsuit without allowing for a period to correct the allegations, which abuses the SB 88 or SU 800 or whatever the heck that process is called.
– Owners are pissed off by a really bad warranty process. The warranty company has been fired. All warranties have been extended through the end of October. The developer is committed to overseeing a positive warranty process.
I have zero problems with my unit and love living here other than the fact that it does get unbearably hot in my unit at times. There is probably a legitimate issue there. Other than that, most of the problems are either trumped up and baseless or stem from a bad warranty process that seems to now be on track. I don’t see a long term value issue.
Oh yeah and the square footage thing is bogus. You buy what you see.
Ditto the comment on HOAs being protected against lawsuits. I served on the board of my previous condo association and that protection was in place so owners couldn’t personally sue people serving on the board and their personal assets.
No, “you buy what you see” is not really the case with the square footage, especially with condos. Condos are legally defined as the airspace between the walls and a partial interest in the entire property – that’s right, in a condo unit you don’t technically own your own walls. The legal condominium area of each unit is measured as the interior wall to interior wall of a unit and is professionally surveyed and measured at the completion of construction. This legal condominium area is then recorded with the subdivision map and is the area figure that is on public records and usually on the MLS as well. However, with new construction, the units are often sold based on sizes from the architect’s plans which are measured from the exterior walls typically. This can be as much as 5% more than the legal condominium area of a property (interior wall to interior wall). So if you are sold a unit which is represented as 1,000 s.f. and then the size listed in the subdivision map in your title report shows the units as being only 950 s.f., well, I think that’s a problem. I’m not sure if that is the case at the Beacon, but I’ve seen it happen so often that I wouldn’t be surprised.
Dang. Whatever the outcome, I’m learning bucketloads from this whole process.
Anonymous, you’re right on with not owning your own walls within a condo. It was put to me once that I owned my unit “from the paint in.” This can sound worrisome but it wound up working in my favor. My absent neighbor’s toilet leaked, eventually flooded his unit and festered for months, causing enormous mold damage. It got through his wall and onto the back of my wall (there were pipes and electrical in between). My insurance carrier would not cover mold damage — and it was over $80K. In the end, the condo association’s policy covered it because it was considered “common area” and thus covered by their policy. I counted my blessings on that one …
Poor Ben Beldi and the properties he “overpaid for” at the height of an overheated real estate market. I would hate to be Ben! Hell, if I were him, I would use his family money too, to pay for an ambulance chasing lawayer like Catelano. By the way, Catelano looks like Trump and wears too much cologne. This guy is a crakerjack! It doesn’t take a genius to figure out that all asset classes, including real estate, are cyclical. Real Estate is meant to keep up with inflation, not exceed the avergae inflation rate by 20% per year over a course of several years. Any idiot knows that what goes up eventually comes back down. I work in the stock market and the majority of the folks that I have meet with over the past 4-5 years had this mentality that real estate is the “only” place to make money. I would walk away from those meetings telling myself and my business partner that people are complete fools if they think they can’t lose in real estate. They would go as far as cashing out their tax deffered retirement accounts, pay the early penalty (10% prior to age 59.5) and ordinary income taxes just so they can own a piece of the market. Fools! What are they left with? Zero retirement savings, a huge tax bill, a home that they paid too much for, and an I/O variable loan that will bite them in the ass at some point. Long term, real estate should do just fine.