When The Kolter Group decided to build a third tower at its Water Club condominium in North Palm Beach, Kolter realized some of the magnificent Intracoastal Waterway and ocean views in the second tower could be blocked.
So the West Palm Beach developer allowed pre-construction buyers in the second tower to cancel their contracts and recoup their down payments. Several buyers whose views would be blocked took Kolter up on the offer, and they canceled their deals.
Now a former Kolter real estate agent, Lori Ann Civitillo, said Kolter wrongly grabbed commissions owed her on several closed condo sales — to make up for the commissions Kolter already had paid her on seven canceled sales contracts.
Civitillo characterized Kolter’s taking of her commissions as conversion, a legal term for taking, in a 21-page lawsuit filed earlier this month in Palm Beach County Circuit Court.
In her complaint, Civitillo said she reserves the right to add individuals believed to be responsible for the conversion, including John Csapo, president of Kolter Tower Realty, and Robert Julien, president of Kolter Group.
Bob Vail, president of Kolter Urban, said the companies don’t comment on current legal actions.
The Water Club is at 1280 U.S. Highway 1. In July 2015, the luxury waterfront condo complex blew past $100 million in advance sales on 162 units in two towers, ranging in price from $700,000 to $1.3 million. Strong demand prompted Kolter to build a third tower, just south of the other two.
The third tower would rise 16 stories and consist of 30 units, with only two, roughly 3,000-square-foot units per floor, and prices from $1.5 million to $2.5 million per unit.
An addition to the luxury amenities, The Water Club’s lure is the open sight lines to the water and surrounding area.
In the lawsuit, Civitillo said she had an agreement with Kolter Group LLC and Kolter Tower Realty LLC to be paid half her commission at the time a condo unit went under contract, and the other half when the sale closed.
Civitillo’s lawsuit said her commissions weren’t contingent on a real estate sale closing, which means she was not required to repay any commissions if the deal did not go through.
But then Kolter allowed some buyers in tower two to back out of their contracts, which meant the company was out on commissions it had paid Civitillo when she inked the sales contracts, which were worth about $1 million each.
When Kolter allegedly dipped into Civitillo commissions on other deals to make up for the money it had paid her on the canceled contracts, it was “self-help restitution,” the lawsuit said.
“Defendants had neither the right to claw back on the initially paid commission on the seven units, nor grab commissions Civitillo had earned on other sales in Tower 2,” the lawsuit said.
Civitillo’s lawsuit didn’t specify an exact amount she is owed, but it did say she sold about $50 million worth of condominiums in the second tower.
“My client feels that she did everything expected of her but she lost her commissions that she earned because of the decisions made by the developer” in canceling the contracts, said her attorney, Steven Schwarzman of West Palm Beach.
The first two towers of Water Club are built and buyers started moving in late last year. Construction on the third tower is set to start soon.