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Buyers Who Paid Millions in Down Payments for Condos at Bahama Island Resort,
North Myrtle Beach, SC, Perplexed Where Funds Are; Escrow Agent
 Bank of America Does Not Have the Funds
 

By Jenny Burns, The Sun News, Myrtle Beach, S.C.McClatchy-Tribune Regional News

Aug. 7, 2007--A North Myrtle Beach condominium project has not been built, and it's unclear where the buyers' escrow money has gone.

Buyers who paid to have condos built at Bahama Island Resort don't know what happened to millions of dollars in down-payment money they gave developers.

The state's Labor, Licensing and Regulation department is investigating.

Two buyers have filed a lawsuit against the developer, claiming the development will not be completed in the two-year time frame that is in the contract, and they want their money back.

Tommy Brittain, attorney for developer Bahama Island LLC, could not be reached in the past week for comment. Calls to Bahama Island's developer, T&J Development, and condo seller Oceanfront Real Estate were not returned.

Randy Mullins, attorney for buyers Davis Fort and Lawrence Brown, said he is suing for breach of contract because construction on the property has not begun except for the dry dock portion of the marina and the contract requires the complex's completion in two years.

Fort and Brown signed a contract in April 2006 to buy two units and other buyers signed in summer 2005.

Given the two-year time frame, Fort's condo should be completed in April 2008. Attorneys say there is too little time for it to be finished in the time allotted.

The contracts of other buyers -- such as Joan DiGregorio, who bought in July 2005 -- are older than two years.

Mullins said he has repeatedly asked the developer to refund Fort and Brown's deposit of $60,000, but it has not happened. He also says the developer failed to disclose that the project would not be completed on time.

The lawsuit says Bank of America was the original escrow agent, but the money was released June 1, 2006, to Oceanfront Real Estate.

The state real estate commission has received a complaint about the Bahama Island project and an investigation is under way, said Jim Knight, LLR spokesman. He declined to release further information until an investigation is finished.

Jarrod Ownbey, associate attorney at Mullins Law Firm, said it is unclear where the deposit money is and how many units were sold for the development.

Bahama Island's Web site says the community has 320 condos. The one-, two-, three- and four-bedroom units include a pool and waterway views.

DiGregorio, of New York, said she bought a two-bedroom unit at Bahama Island in July 2005.

She has also requested the return of her $37,000 deposit, and has heard nothing.

"This was supposed to be my retirement. It's despicable," she said.

She said she has called police, the attorney general and is considering legal action.

After Fort's lawsuit was filed June 19, Oceanfront Real Estate Co.'s broker Steve McIntosh sent a letter July 25 to buyers saying the construction lender "did not fulfill their obligations" for funding and has refused to release requested refunds.

Mullins said he's not sure of the meaning of the letter, which says the developer has secured a contract to sell the property to another developer and is continuing to seek construction funding in case the sale falls through.

The letter also states the developer has filed a lien against the property to protect buyers' interest while the property is being sold.

It says the property "cannot be transferred to another party or a new construction loan closed until the lien is satisfied."

Mullins said he didn't think a real estate company can file a lien.

"What it doesn't say is anything about giving my client their money back," he said.

Buyer Mark Chapman of Greenville purchased two one-bedroom units in June 2005. He paid a $36,000 deposit for both properties, and said he can't get his money back.

Buyer Scot Jones said he also has been trying to get his money back for more than a year.

Jones said he called Bank of America and that he was told the bank didn't have his money.

"That's when red flags started going up," he said.

Contact JENNY BURNS at 626-0305 or jeburns@thesunnews.com.

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Copyright (c) 2007, The Sun News, Myrtle Beach, S.C.

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