Natick Mall condo owners allege fraud, seek refunds
Just four years ago, the 215-unit luxury condominium complex next to the Natick Mall was being described as emblematic of a new era in suburban high-class living.
Nouvelle at Natick, with some units listed for $1.5 million, advertised a 1.2-acre rooftop garden, 24-hour concierge service, and access to such upscale mall shops as Louis Vuitton and Burberry without stepping foot outside.
But last month, the owners of 11 units filed a lawsuit against the complex, its owner, and a former representative, alleging they were lied to and pressured to close sales before Nouvelle’s enormous financial issues could be discovered.
The owners want to give up their condos and get their money back.
“These people didn’t get what they paid for. They didn’t get it in terms of the strength of the developer, and in terms of the quality of the experience they’re getting,’’ said Tyler Chapman, the owners’ lawyer. “This remedy we’re seeking essentially tries to put people back in the position had the deal never occurred.’’
Less than a year after the plaintiffs purchased their homes for up to $1.2 million, many of Nouvelle’s remaining units were sold at auction in 2009 for well below their initial offering price - some discounted by more than 60 percent - to get quick money into the development. The complex was owned by troubled mall-builder General Growth Properties Inc., which was dealing with its $27.3 billion bankruptcy case.
Owners who bought before the price declines say the Chicago-based company’s senior director of development, Aaron Bartels, committed fraud by intentionally lying about Nouvelle’s funding sources, withholding information, and not giving owners the options available to later condo purchasers, such as extending closing dates.
Bartels referred questions to a General Growth Properties spokesman, who declined to comment. The Howard Hughes Corp., which was spun off by General Growth when it emerged from bankruptcy last fall, and is Nouvelle’s current owner and a codefendant in the lawsuit, did not return requests for comment.
The owners’ complaint also alleges they didn’t get the luxury they were promised; it cites hallways that went unheated during the winter, and a sewage problem that caused raw waste to seep into the parking garage.
Linda and Michael Brownstein paid cash for their $1 million, 1,774-square-foot unit with three bedrooms and two bathrooms, according to the lawsuit.
As they waited for their condo’s completion, they started reading about General Growth Properties’ financial troubles and expressed their concerns to Bartels.
According to the lawsuit, Bartels told the Brownsteins there was nothing to worry about since Nouvelle was privately funded, which the complaint states was untrue. He also allegedly said there were no outstanding loans or money owed on the project, and refused to allow the Brownsteins to extend their closing date.
After the Brownsteins completed their purchase, Nouvelle’s general contractor, Dimeo Construction Co., placed a $12.6 million lien on the condo project.
And when General Growth filed for bankruptcy in April 2009, Nouvelle, as a project financed by the company, was included in the proceedings.
To try to recoup money quickly, in October 2009 General Growth commissioned a highly publicized auction in the Crowne Plaza Boston ballroom, where 55 of the remaining Nouvelle condos sold for between 36 and 64 percent off their original asking price.
One penthouse suite sold for $626,000, about $1 million less than its first listing.
The Nouvelle at Natick website reports that there is only one unit left to purchase.
According to the lawsuit, two of the original owners, Robert Haas and Brigitte Haas-Bruining, paid cash for their $776,800 unit. When they sought a letter from Bartels confirming that Nouvelle was privately funded, he allegedly refused to provide it, and told the couple they would forfeit their 10 percent deposit, or nearly $78,000, if they backed out of the closing.
Chapman said the lawsuit is in the discovery phase, which could last a year or two, and the defendants have requested that the case be moved to federal court in Boston.
He said the lawsuit isn’t about buyer’s remorse, but about getting what’s fair for his clients, many of whom are at or beyond retirement age and had hoped that the Nouvelle units would be wise investments.
“Many of my clients had owned homes in the area for years and were at a stage of life where the convenience of condominium living without having to move into the city appealed to them, and still does,’’ he said.
“It’s not that my clients regret buying a condominium at the Natick Mall. Had my clients been given accurate information in response to their questions about the financial condition of the project and the developer, they would not have gone through with the purchases.’’