Unit owner sues the association and members of the Opera Tower Condo

Miami Opera Tower with Jerome Hollo (Opera Tower rental)

For years, the Opera Tower Condominium Association has allowed illegal short-term rentals to flourish, sparking construction spending and cratering property values, according to a recently filed lawsuit.

The lawsuit, filed in Miami federal court on June 21 and seeking class action status, is the latest legal battle involving unauthorized rentals of 30 days or less at the 635-unit luxury tower located at 1750 North Bayshore Drive in Miami’s Arts and Entertainment District.

The plaintiff is Joseph Dispoto, who purchased a one-bedroom unit in the Opera Tower in 2007. Yet up to 200 unit owners would qualify for class action status, and damages would exceed $ 5. million dollars, according to the lawsuit. The defendants are the Opera Tower LLC building management and leasing entity, the Opera Tower Condominium Association and the directors of the condominium board of directors Dean Warhaft, Joseph Arthur and Michael Smith.

Opera Tower LLC also owns the building’s commercial spaces and is managed by Jerome Hollo, executive vice president of Florida East Coast Realty, who developed the 56-story tower.

Warhaft, chairman of the board and director of development for Florida’s east coast, declined to comment. Condo lawyer Jose Baloyra and Dispoto lawyers Janet Varnell and Brian Warnick did not respond to phone messages and emails seeking comment.

The lawsuit claims the condominium association and its directors violated the city’s zoning code, Miami 21, which prohibits short-term rentals in multi-family buildings such as Opera Tower. About 200 units of the building are actively listed and available for short-term rentals, according to the lawsuit.

Opera Tower LLC has also engaged in condo rentals for 30 days or less until February 2020 through a company called Opera Suites and Marina. Opera Suites and Marina, according to the lawsuit, had its own registry office in Opera Tower for a time and actively advertised its short-term rental services on various hotel reservation websites.

Last year, the condominium association sent a letter in July to owners admitting that short-term rentals had deteriorated property values. A month later, Opera Tower received a cease and desist letter from the city of Miami to stop all short-term rentals, according to the complaint.

“Residents and owners of the Opera Tower Condominium have regularly filed complaints with the management of the association about short-term rentals affecting their safety and quality of life,” said the lawsuit. “Rather than protecting the Plaintiff and other Unit Owners, the Defendants are in fact attempting to further permit short-term rentals in violation of their fiduciary obligations to the Plaintiff and the Unit Owners.”

According to the complaint, the condominium association conducted a financial review in 2019 which determined that the building’s total operating expenses jumped 104% and the impact of short-term tenant relationships was 12%. % of the building’s $ 5.2 million operating budget.

“The financial review showed that the current management team is not properly
staff to operate a high turnover short-term rental property, ”the lawsuit alleges. “The result was that the reserves were woefully insufficient.”

As a result, unit sales saw a dramatic drop in the first half of 2019, along with a drop in property values, according to the complaint.

In a lawsuit by the condominium association against Airbnb last year, Opera Tower documented the issues highlighted in Dispoto’s complaint, such as escalating spending and the cease and desist letter from the city. But he blamed the online short-term rental company and dishonest unit owners for the proliferation of short-term rentals in the building.

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