Devtov Group, the luxury home builder led by Juan Carlos Tovar, is on the hook for nearly $2 million in a lawsuit involving a long-stalled spec home in Pinecrest, in a case that the developer brought against its investor.
An arbitrator ruled Devtov to pay Navja Corp. about $1.8 million, plus damages, according to a recent filing in the case. Navja, led by Mexican investor Enrique Navarro, formed a 50-50 joint venture with Devtov called Mansions 8800, which purchased the 1-acre site at 8800 Southwest 64th Court in Miami, across the street from Gulliver Preparatory School. The LLC paid $1.6 million for the property in 2021.
The house, a shell, has sat partially built since 2022, even as luxury and ultra-luxury home sales have boomed in areas that include Pinecrest. The dispute provides a window into deals that foreign investors make with on-the-ground builders and developers to secure stakes in Miami real estate, which can be highly lucrative. Last year, a Pinecrest mansion built in 2022 sold for $19.5 million, a record for the village.
Devtov built its business off “The Mansions” brand, including the Mansions at Doral. In July, Devtov sued the developer of the Mansions on Fisher Island over alleged trademark infringement of the registered phrase “The Mansions.”
In the Pinecrest case, the firm sued Navja a year ago to have the court expel Navja as a controlling member of the company that owns the property. Devtov said it had been covering property taxes, payment of city fines and ongoing maintenance of the house and the surrounding lot. The firm also said in its complaint that their joint venture incurred invoices to Devtov Group, the general contractor, for more than $1 million.
Devtov alleged that Professional Bank approved Tovar’s application to guaranty a construction loan for the project, “but did not approve Mr. Navarro’s application because of insufficient assets,” according to the suit. But the arbitrator disagreed. In his final award filing, he said Tovar didn’t show any proof that supported that argument. Tovar testified that Professional Bank would only provide the loan if Tovar agreed to guaranty the full loan amount, which he wasn’t willing to do.
Navarro testified that when he contacted Professional Bank, the bank’s representative requested Navarro speak with Tovar, and when Navarro sought a hard-money loan from a private lender, Tovar wasn’t interested because he said the terms weren’t favorable.
The arbitrator also found that Navja “proved the elements necessary for breach of contract” under Florida law, and that Devtov’s failure to pursue any further financing constituted “a breach of the obligation of good faith and fair dealing” statute.
“Tovar and Devtov GP, LLC did not act with any good faith diligence to try to resolve the problem of financing and a buyout,” wrote the arbitrator, attorney Oliver J. Langstadt. He said he was “troubled” by Devtov and Tovar’s lack of effort to reach a buyout settlement with Navja, and cited Tovar’s “experience building luxury homes and the Florida real estate market,” according to the filing.
“This caused the project to languish, incur further debt and cause Navja Corp. and Navarro to lose complete confidence that there would be any meaningful resolution and recovery of Navja Corp.’s investment in the project,” Langstadt wrote.
Devtov could appeal by asking the court to vacate the arbitration award.
“We respectfully disagree with certain findings in the arbitration award, and we are pursuing the legal remedies available. As the matter remains before the court, we won’t be commenting further at this time,” Devtov said in a statement. The firm said it remains committed to completing its projects.
Kluger Kaplan attorney Josh Rubens, who represents Navja in the litigation, said that Navja is “very pleased” with the arbitrator’s ruling but declined to comment further.
