Stained… The beat goes on with The Colony on Longboat Key

Stained… The beat goes on with The Colony on Longboat Key

Colony Lender files foreclosure suit against owners

by: Robin Hartill via The Observer.com

Colony Lender LLC filed a lawsuit against Colony Beach & Tennis Resort unit owners Friday, seeking to foreclose on units at the shuttered Colony Beach & Tennis Resort. In the lawsuit, filed in the U.S. District Court’s Tampa Division, Colony Lender states it is owed more than $5.1 million in damages. Although it filed a notice of voluntary dismissal Tuesday, Colony Lender will refile the identical complaint in state court due to jurisdictional issues, according to Colony Lender principal David Siegal.

The suit seeks $4,594,276.40 for accrued unpaid rent plus interest on a disputed recreational facilities lease for the period of Oct. 29, 2008 through Aug. 15, 2014, plus $525,244.82 in unpaid real estate taxes plus interest and attorney fees.

When the Colony was operational, unit owners paid $650,000 annually for use of the tennis courts and other recreational properties at the property to longtime owner Dr. Murray “Murf” Klauber and other leaseholders.

Colony Lender argues that it owns both a 95% interest in the land and the lease, a claim that the Colony Beach & Tennis Association denies, arguing that Colony Lender owns only real property at the resort. The association also argues that the Florida Legislature outlawed agreements such as the recreational facilities lease in 1975.

The suit lists 174 defendants, representing all owners of the 237 units at the shuttered resort — except for Siegal, who owns two units.

Approximately nine owners agreed to sell their units to Orlando-based Unicorp National Development Inc., which has an agreement to purchase Colony Lender’s resort assets. Those owners will be dropped from the suit, according to Siegal.

“I would expect there will be a number of defense lawyers talking to us, and I would expect … being able to reach resolution with some and not with others,” he said.

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