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Natick luxury condo owners file lawsuit to get their money back

Posted by Megan McKee  November 4, 2011 12:47 PM

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Just a few years ago, the 215-unit luxury condo complex next to the Natick Mall was emblematic of a new era in suburban high-class living. Nouvelle at Natick's units, some listed for $1.5 million, advertised a 1.2-acre rooftop garden, 24-hour concierge service, and mall access to Louis Vuitton and Burberry that didn't require stepping foot outside.

But last month, the buyers of 11 units filed suit against the complex, complex's owner, and former representative, alleging they were lied to and pressured to close sales as quickly as possible before Nouvelle's enormous financial issues could be discovered.

The owners want to give up their condos and get their money back.

“These people didn't get what they paid for. They didn't get it in terms of the strength of the developer and in terms of the quality of the experience they're getting,” said Tyler Chapman, the owners' lawyer. “This remedy we're seeking essentially tries to put people back in the position had the deal never occurred.”

Less than a year after they purchased their homes for up to $1.2 million, many of Nouvelle's remaining units were sold at auction well below their initial offering price—some more than 60 percent below—to get quick money into the development that was owned by troubled mall-builder General Growth Properties as it dealt with its $27.3 billion bankruptcy case.

Now those owners want their deals undone, saying that the General Growth Properties' senior director of development, Aaron Bartels, committed fraud by intentionally lying about Nouvelle's funding sources, withheld information, and didn't give owners options available to later condo purchasers like extending closing dates.

Neither General Growth Properties nor Howard Hughes Corporation, Nouvelle's current owner and a co-defendant in the lawsuit, immediately returned requests for comment.

The owners' complaint also alleges they didn't get the luxury they were promised. Hallways went unheated for six months—November through the following spring--and on one occasion, a missing sewage pump caused raw waste to seep into the parking garage.

Linda and Michael Brownstein's story is typical of condo owners. The Brownsteins paid cash for their $1 million three-bedroom, two-bathroom unit.

As they waited for their condo's completion, they started reading about General Growth Properties' financial troubles and expressed their concerns to Bartels.

According to the lawsuit, Bartels told the Brownsteins there was nothing to worry about since Nouvelle was privately funded, which was untrue. He also allegedly said there were no outstanding loans or money owed on the project, and refused to allow the Brownsteins to extend their closing date.

After the Brownsteins closed, Nouvelle's general contractor, Dimeo Construction, placed a $12.6 million lien on the project.

And when General Growth filed for bankruptcy, Nouvelle, as a project financed by the company, was brought into the fold.

To try and recoup money fast, General Growth commissioned a highly-touted Oct. 2009 Nouvelle condo auction, when 55 units sold for between 36 and 64 percent off their original asking price.

One penthouse suite sold for $626,000, about $1 million less than its original asking price.

According to Nouvelle at Natick's website, there is only one unit left to purchase.

Chapman said the lawsuit is in the discovery phase which could last a year or two, and that the defendants requested the case be moved to federal court in Boston.

He said his clients want to move on with their lives.

“Its hard to bring a lawsuit,” said Chapman. “It takes an enormous amount of willpower you have to believe a real injustice has been done to you.”

Megan McKee can be reached at megan.mckee@gmail.com.

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