Unit owners at a Singer Island hotel-condo are tangled in a decade-long lawsuit in which they say the hotel’s owner charged them unfair and duplicative fees adding up to tens of millions of dollars.
The condo association for the Palm Beach Marriott Singer Island, in Riviera Beach, sued owner Urgo Hotels in 2015, claiming condo owners were being charged for the maintenance of shared facilities in the hotel, without assurance that the fee was fair.
More than a decade later, the condo owners are asking a judge to freeze the fees while the case is pending. They’re also seeking punitive damages for the money they have been charged since 2013. That amount could add up to more than $45 million, said Stevan Pardo, an attorney for the condo association.
Litigation is haunting condo-hotels across South Florida. The law has largely favored developers and done little to protect condo owners, and Singer Island resort unit owners say they have no choice but to continue their tangled, costly battle in court.
The case is set to go to trial early next year. Ronald Gache, an attorney for Urgo and its entity named in the suit, UH-SI LLC, declined to comment.
Maryland-based Urgo, helmed by CEO Donald Urgo, bought the building at 3800 North Ocean Drive from its developer, WCI Communities, in 2009 shortly after the developer went bust (WCI emerged from bankruptcy and was purchased by Lennar in 2017).
Urgo paid $7.1 million for the 239-unit resort (under $30,000 per key) before renaming it and planting a Marriott flag.
Urgo immediately faced litigation in 2010, when the condo association sued it under claims that they were unfairly charged for maintenance of shared facilities. That suit was settled in 2013, according to court documents.
Shortly after, condo owners claimed they were still being overcharged for shared facilities and asked Urgo to produce its accounting records.
Among the fees owners disputed was an administrative fee charged for each day a unit was occupied. That fee of about $45 per day was meant to cover the costs of “integrating” lodging guests into the building, according to court records.
Unit owners were also required to pay a quarterly assessment meant to cover the costs of shared facilities.
In hotel-condo contracts, private companies control shared facilities, which include communal areas like elevators or hallways, and those companies hold near-unilateral control over how the hotel is maintained and what it costs.
The lawsuit argues that both fees are excessive and double charge condo owners for the costs of maintaining the building.
Sam Lasorda, who bought his unit in 2005 before the development was constructed, said he felt it was unclear what his fees paid for and how much the services actually cost.
“It’s like going into a restaurant, and you don’t even sit down and have dinner, but you get handed a bill,” said Lasorda, who was later condo association president.
After Urgo produced its audit, the condo owners accused Urgo of using an arbitrary formula that wasn’t grounded in its actual expenses to calculate the shared-facilities costs.
For its part, Urgo’s team said in court filings that the lawsuit should not have been allowed to continue because the 2010 case was already settled.
Some condo owners no longer support continuing the lawsuit, and the association’s board stalled its elections to prevent opposed owners from gaining power, the company said.
Condo association president Marina Schtutman said she and other members of the board would prefer not to be stuck in expensive and lengthy litigation, but that it’s necessary in this case.
“It comes to a point where that’s the only way you can hold someone accountable is by going through the court system,” she said.
Pardo and co-counsel Greg Weiss filed for punitive damages and a temporary stay of the fees in August as they await trial next year.
It’s not Pardo’s first time navigating a hotel-condo case. He represented condo owners at Miami’s Carillon resort, who similarly sued their developer, Z Capital Group. And owners at Singer Island’s Amrit Resort, neighboring the Marriott, brought a lawsuit against developer Wellness Resorts over what they say were construction failures.
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