50+ Unit Owner-Investors Accuse Condo Converter Of Pocketing Rent, Using Apartments As Loan Collateral Without Consent

In League City, Texas, The Galveston County Daily News reports:

• More than 50 investors, most from Israel, went to court last week in attempt to save condominium units from foreclosure as they sue a group of companies and people they say defrauded them in a real estate venture. The lawsuit claims the defendants kept revenue generated by the venture that should have gone to pay debt and used property owned by the plaintiffs as collateral in obtaining a loan of almost $23 million that benefited the defendants. The investors together own 114 units in Fairways at South Shore, 3045 Marina Bay Drive, in League City.(1) The former 432-unit apartment complex was converted into condominiums about three years ago.

For more, see Condos embroiled in litigation.

(1) Reportedly, the investors never intended to live in the units but instead were seeking to generate income by renting them to others, according to the lawsuit. Through agreements, the units owned by the investors were put in a rental pool managed by the defendants, according to the lawsuit.