Lake Austin Properties I, Ltd. Update – Status of Buyers’ Deposits
Lake Austin Properties I, Ltd. – Update
Status of Buyers’ Deposits
Urban Thier & Federer, P.A., now represents over 400 units (of which 317 have been fully concluded) of the 1,588 units that make up the Grande Palisades (890 total units, with 304 in C1 and 293 each in C2 and C3), Avalon Resort (349 planned units) and Magnolia Woods (349 planned units) phases of the Lake Austin Reserve development. Each of Urban Thier & Federer, P.A.’s purchaser clients in the Lake Austin Reserve development signed an Agreement for Sale (in Grande Palisades purchasers also signed a second Agreement for Sale in 2007) with Lake Austin Properties I, Ltd., for the purchase of a condominium hotel unit.
If you entered into an Agreement for Sale with Lake Austin Properties I, Ltd., you should be aware that 10 percent of your purchase price in deposits paid was transferred by Maesbury Homes Inc. (an affiliate of Lake Austin Properties I, Ltd.) to Vanguard Title, LLC, as escrow agent, which amount is now being held by the successor escrow agent, Extensor Capital Investment Partners II, LLC. You should also be aware that pursuant to the terms of the Agreement for Sale, any deposit payment in excess of 10 percent of the Agreement for Sale purchase price has probably been utilized by Lake Austin Properties I, Ltd. However, at least 10 percent of the purchase price in deposits should still be in the escrow account.
The Lake Austin Reserve units were marketed primarily by Instant Access Properties (“IAP”), which went into liquidation/bankruptcy in 2008. Around the same time IAP Global emerged to pick up the marketing role. Now IAP Global has gone into liquidation/bankruptcy and appears to be directing purchasers to an entity by the name of International Progressions.
Grande Palisades purchasers have been receiving emails from a Lake Austin Reserve Grande Palisades purchaser under the name The Affinity Partnership Ltd., which appears to be a UK based for profit entity that is working for or with Lake Austin Properties I, Ltd. According to the email, Lake Austin Properties I, Ltd., is seeking to transfer its contract/Agreement for Sale rights to a new entity named Leighton Hall Properties, LLC, which also appears to be a UK based entity. The email also claims that Lake Austin Properties I, Ltd., is willing to return 2/3 (66.66 percent) of Grande Palisades purchaser’s remaining escrow deposit if they no longer want to proceed and do not want to transfer their rights to Leighton Hall Properties, LLC. All Lake Austin Reserve purchasers in the Grande Palisades, Avalon and Magnolia Woods phases should weigh their rights and options, and consult an independent attorney of their own choosing, before making any final decision. Urban Thier & Federer, P.A. has absolutely no connection with Fuel, Fuel Investments, IAP, IAP Global, or Lake Austin Properies I, Ltd.
If the email from The Affinity Partnership Ltd. is accurate, then it appears that Lake Austin is seeking to resolve Grande Palisades purchasers’ rights by returning 2/3 (66.66 percent) of the remaining escrow funds consisting of 10 percent of each Grande Palisades purchaser’s Agreement for Sale purchase price. If those same Grande Palisades purchasers were to retain a law firm to represent their interests, such as Urban Thier & Federer, P.A., and recovered the full 10 percent of the purchase price still in escrow via a 33 percent contingency fee Legal Representation Agreement, purchasers would have the same result of recovering 2/3 (actually purchasers would recover 67 versus 66.66 percent) of the remaining 10 percent of the purchase price still in escrow.
Those purchasers would essentially have a licensed Florida attorney at no extra cost to:
1) represent them and their interests,
2) ensure that any resolution is fair, results in a complete release from the Agreement for Sale contractual liability and is not part of a larger scheme,
3) ensure that all funds are received, accounted for and transferred to the purchaser, and
4) if the purchaser prefers, strive to recover a final judgment in order to allow the recovery of additional funds in the event that Lake Austin Properties I, Ltd., is solvent and able to pay additional amounts.
Understandably, Lake Austin Properties I, Ltd., would like to retain another 1/3 of each Grande Palisades purchaser’s deposit after having already used the deposits paid in excess of 10 percent of the Agreement for Sale purchase price. Also, understandably, Lake Austin Properties I, Ltd., would like to transfer the benefits of each Grande Palisades Agreement for Sale to a new entity such as Leighton Hall Properties, LLC, as part of a restructuring scheme. Again, we encourage you to consult with this law firm or another of your independent selection before taking any action.
It may also be of interest to you that Lake Austin Properties I, Ltd., appears to be attempting to distance itself from IAP/IAP Global/International Progressions. Paul Oxley and/or Lindsay Oxley, the principals of GFD, Inc., which is the general partner of Lake Austin Properties I, Ltd., the Lake Austin Reserve developer, have contacted a number of Lake Austin Reserve purchasers represented by Urban Thier & Federer, P.A., and asked them not to continue with litigation because they believe that construction will start up again in the near future. The fact that the development, or at least the Grande Palisades phase of the Lake Austin Reserve development, may ultimately be completed, in our opinion, has little or no bearing on a purchaser’s decision as to whether or not to purchase a unit. Even if the Lake Austin Reserve was completed tomorrow, we sincerely believe that the value of units in an overbuilt and post Florida real estate bubble market is still a mere fraction of the contracted for price. Additionally, we believe that the Avalon and Magnolia Woods phases may never be built. We believe that it is clear that Mr. and Mrs. Oxley would like purchasers to take no legal action, honor their contractual obligations, and ultimately pay the contracted for purchase price. This is how Lake Austin Properties I, Ltd., and its related individuals and/or entities can make money on the Lake Austin Reserve development.
However, we also believe that the primary business/market valuation of a commercial unit, such as a condominium hotel, is a function of the monthly net revenue or profit that the unit can generate. Unfortunately, regardless of other factors, the net revenue less the carrying costs is the relevant analysis. The carrying costs would include property taxes, insurance, association fees, repairs and (if financed) principal and interest payments. We believe that there is a very large over supply of condominium hotel units in the Disney corridor/surrounding area and do not see any significant revenue generation in the foreseeable future.
IAP Global has previously gone on record to state that the rental guarantee agreements will not be honored. In at least one Maesbury Homes, Inc., development the rental guarantees were also not fully honored (the Oxleys are principals of Maesbury Homes, Inc., and GFD, Inc., which is the general partner of Lake Austin Properties I, Ltd.). Once Lake Austin Properties I, Ltd. or its successor has sold the units, it is out of the equation.
Finally, Lake Austin Properties I, Ltd., appears to remain silent regarding the pending foreclosure lawsuit filed in October 2009 by the entity that holds the principal mortgage on the unsold land and buildings that make up the Lake Austin Reserve. On October 9, 2009, Beal Bank Nevada filed a foreclosure lawsuit against Lake Austin Properties I, Ltd., GFD, Inc., Paul Oxley and others, seeking over $150,000,000.00 and seeking to foreclose and to have a receiver take over the Lake Austin Reserve. The case, case number 2009-CA-031936, is pending in state court in Florida’s Ninth Judicial Circuit in and for Orange County, Florida.
Urban Thier & Federer, P.A. encourages all purchasers to do their own independent due diligence and research. You can also learn more about Lake Austin Properties I, Ltd.’s Lake Austin Reserve Grande Palisades, The Avalon and Magnolia Woods Resort phases via these previous articles and updates:
- Lake Austin Properties I, Ltd. – Twelfth Update – Lake Austin Reserve Purchasers Secure Judgement
- InformationLake Austin Properties I, Ltd. – Eleventh Update – Lake Austin Announces Deal with Malbec Investments
- Lake Austin Properties I, Ltd. – Tenth Update – Urban Thier & Federer, P.A. Answers Lake Austin Reserve Purchases’ Questions in Person in the United Kingdom and Provides Factual Information
- Lake Austin Properties I, Ltd. Ninth Update – Lake Austin Properties I, Ltd., Raises Bankruptcy and Other Issues to Encourage Grande Palisades, Avalon and Magnolia Woods Purchasers to Continue with an Economically Unjustifiable Purchase.
- Lake Austin Properties I, Ltd. Eighth Update – Lake Austin Reserve Developer Visits United Kingdom to Propose REIT Concept
- Lake Austin Properties I, Ltd. Seventh Update – The Importance of Understanding Your Chosen Law Firm’s Litigation Strategy and Your Own Litigation Priorities
- Lake Austin Properties I, Ltd. Sixth Update – Lake Austin Joins Forces with IAP/IAP Global Veteran to Replace The Affinity Partnership, Ltd.
- Lake Austin Properties I, Ltd. Fifth Update – The Grande Palisades and Lake Austin Properties I, Ltd. High Pressure Tactics
- Lake Austin Properties I, Ltd. Fourth Update – The Future of the Grande Palisades and the Oversupply of Disney Area Condominium Hotels (Condo-Hotels)
- Lake Austin Properties I, Ltd. Third Update – Fuel USA and Affiliated Attorneys and Solicitors
- Lake Austin Properties I, Ltd. Second Update – The Affinity Partnership, Ltd. and Related Entities
- Lake Austin Properties I, Ltd. Grande Palisades, Avalon and Magnolia Woods – Status and Rights
The Florida Bar, which regulates all attorneys who are licensed to practice law in the State of Florida, provides strict guidelines which prohibit us from referring to past successes or results obtained for other purchasers in this or other developments. However, we can provide you with this and other information in response to any inquiry. Accordingly, we encourage you to contact us via the “Contact Us” page and we will promptly respond with additional information. You can also view more detailed information on our About Us page.
We encourage all purchasers to interview any attorney that they may be contemplating to retain and to ask that attorney for their experience, record in this area of the law, number of cases taken to final judgment, number of cases affirmed on appeal, number of attorneys in the firm, firm staff, resources, etc. We sincerely believe that purchasers should not retain an attorney or law firm until they are confident that 1) the law firm has the experience and resources to represent their best interest and 2) they fully understand the law firm’s litigation strategy.
With attorneys in Orlando, Florida, and Munich, Germany, Urban Thier & Federer, P.A. continues to assist buyers throughout the United States and European Union countries who are seeking to terminate their pre-construction purchase agreements. Most cases can be handled on a contingency fee basis (client is responsible for costs).
We encourage you to explore our website – www.urbanthier.com to learn more about Urban Thier & Federer, P.A., their attorneys and practice areas. Urban Thier & Federer, P.A.’s representation of buyers includes litigation of cases in state court, federal court and arbitration proceedings. We encourage you to become informed of your rights and options. You should also ensure that any law firm you consult or retain to represent you has the experience, resources and ability to take your case through trial and appellate courts, if necessary.
Please note that Urban Thier & Federer, P.A. does not represent you and cannot take any action on your behalf unless and until you enter into a formal written Legal Representation Agreement.
John L. Urban, Shareholder