You know know how the Roosevelt in downtown has decided to go fully rental, at least in the short term? Here’s a tale of a buyer who got sucked into the building's Chapter 11 black hole. Although there are worse buildings to be stuck in! Meredith Marshall plunked down a deposit for a one-bedroom back in August 2008, right before the housing market blew up. She moved into the building while she was still in escrow. But before she could close on her unit, the Roosevelt filed for Chapter 11. Marshall, who works in the television industry, has been living in the unit she wanted to buy since early 2009. She's been renting, hoping the Roosevelt would throw that planned auction so she could close on her unit. “I’ve waited two years to be able to get my deposit back or close on the unit,” says Marshall.
According to Marshall, the difficulties in getting her deposit back have to do with how much of money will be refunded. She's also paid varying degrees of rent while living at the Roosevelt, which has complicated what she may or may not be owed.
We first met Marshall back in May, when we checked out the Roosevelt to see what it was like living in a Chapter 11 building. At that point, select units were being rented out. On one hand, it felt like she had run of the place, a former 1927 office building. On the other hand, wandering around the quiet hallways (some of the floors still remain unfinished today) felt a little weird, and as Marshall said at the time, " “it’s a little strange not knowing your neighbors. Or even knowing if you have neighbors.”
This past August, Marshall's sales contract passed the two-year mark, so she believes the contract is now void since Roosevelts Lofts LLC failed to close within a two-year period. Err, that may actually not be true, says attorney Honan Taghdiri, counsel for Roosevelt Lofts LLC, who says he believes the Chapter 11 filing essentially freezes things, and changes the contract's timeline.
Taghdiri and Marshall will have to work out that issue, but for her part, she says she wants to recoup her deposit, sign a new lease, and keep renting the unit because she really likes the building ("I haven't found another building in downtown I like as much"). Taghdiri responds by saying that if "she doesn't want the unit anymore, then she will get her deposit back."
He disagrees with the notion that these Roosevelt buyers-turned- renters (it's estimated about three buyers moved in as renters) were put in a weird situation. "You are living in the unit except you didn’t have to buy it," he says. "[The rent] is cheaper than a mortgage and you've got amenities like a tanning machine. Who has a tanning machine?" (Yes, in addition to a great pool, the building has a tanning machine.)
But Marshall was definitely in some murky waters, says Bill Pham, attorney at McKenna Long & Aldridge LLP. Essentially she had two choices, believes Pham: She could wait for a decision to be made within the bankruptcy court, a decision that would have either prompted the sale of the units or voided the sales contracts (releasing her from her contract). Or she could have hired a lawyer and tried to get out of the contract. "Unless someone takes action, you can sit in limbo," says Pham. He should know--he represented 20 Roosevelt buyers in a lawsuit against the LLC.