Condo Blogger sued by Miami Developer

Readers of our condo blog like one thing the best: The fact that we tell is like it is – good or bad. We highlight the good, but if there are shady goings on out there, we tend to speak up about that too.

Lucas Lechuga is our counterpart in Miami. Buyers love his condo blog - developers, well, not so much. Tibor Hollo, the developer of the Miami condo “Opera Tower” has just filed a $25M lawsuit against Lechuga for making a comment in one of his blogs that he gone bankrupt in the past. Hollo admits that he lost a lot of money, but says he never Keep Calm and Carry Onactually filed for bankruptcy. Of course you don’t have to file for bankruptcy to be bankrupt – still, it probably wasn’t the smartest thing for Lechuga to say out loud. Nevertheless, it seems unlikely that the lawsuit will go too far, but we’ll let the courts figure that one out.

Of course the real target is Lechuga’s broker, EWM (owned by Warren Buffet) who responded by letting Lechuga go – after just five weeks. The irony is, he was hired partly because of his blog.

Lucas: forget EWM – go get your own broker’s license and start your own bloggerage / LLC. You can still be sued but hey, do you have $25M? Probably not. So what’s the difference.

Meanwhile we’ll still be telling it like it is here in Orlando - We don’t mind being sued at all. We’re as broke as everyone else in the midst of this real estate mess. Oops, did I tell the truth? “Real estate mess”? My bad.

You can read Lechuga’s blog here, and here is the CBS4.com story from Miami.

3 Comments

  1. Rediculous. Just keep doing your thing here. With all the nonsense that’s being talked out there, it’s good to know there’s at least one place we can come for the truth. Wish more Realtors would just be honest about it all.

  2. Those kind of stories always worry me. I rely more often on internet blogs these days than industry publications. I don’t want excellent blogs like yours be muzzeled because you’re afraid of any lawsuits.

  3. UPDATE
    Inman News 1-15-09
    By Matt Carter

    Lucas Lechuga’s Miami Condo Investments blog remains the lifeblood of his business, nearly one year after he and his former employer were hit with a $25 million lawsuit by a developer who said Lechuga defamed him.
    The lawsuit — dismissed on Jan. 6 after parties in the case reached separate, confidential settlements — stemmed from Lechuga’s speculation about the prospects for Opera Tower, a 56-story, 635-unit condo project built by a prominent Miami developer, Tibor Hollo.
    Lechuga predicted that the development, in Miami’s downtown Brickell district, was “doomed” and would have a 50 percent default rate. But Hollo said the main impetus for suing Lechuga and his employer, mega-broker Esslinger-Wooten-Maxwell, was an earlier, Nov. 25, 2007, blog post claiming the developer “went bankrupt in the 1980s” and to expect “a repeat performance within the next six months.”

    Although Hollo acknowledged having been in some tight situations in his long career as a developer, he’d never resorted to filing for bankruptcy — something Lechuga could have double-checked in public records, he told Inman News at the time.

    The case captured the attention of real estate bloggers nationwide — in part because Lechuga’s broker at the time, EWM, cut its ties with him when the company was named as a defendant in the suit (Hollo’s complaint alleged that EWM shared liability with Lechuga, even though he’d started the blog before becoming associated with the broker and maintains it himself).

    Some observers worried the lawsuit would have a chilling effect on bloggers and lead them to think twice before speaking frankly about local market conditions (see story).

    In a public apology published Dec. 19 on his Miami Condo Investments blog — a post apparently stipulated by the pending settlement — Lechuga said his claim that Hollo went bankrupt in the 1980s “was completely untrue.” He added that he’d been “proven wrong” about contract closings at Opera Tower, and that he wished to “publicly acknowledge Mr. Hollo’s contribution to Miami’s skyline.”

    According to the order dismissing the case, both sides are paying their own costs and attorneys’ fees. The cost of Lechuga’s defense was covered by EWM’s errors and omissions insurance.

    Although he’s barred from talking about the terms of the settlement, Lechuga said he’s working for Keller Williams Realty these days and that business has been picking up lately (EWM did not respond to a request for comment; Hollo could not be reached for comment Wednesday).

    The Miami condo specialist said he’s actually intensified his coverage of local market conditions in his blog. Although he’s not worried about facing another lawsuit, he acknowledges being more careful to verify information and make it clear when he can’t confirm a rumor he’s heard.

    “My blog is my lifeblood,” Lechuga said. With many local buyers still on the fence or unable to obtain financing, he said the blog helps him reach an international audience who are a crucial source of “cash buyers” for the speculative Miami condo market.

    “If I didn’t have my blog, I wouldn’t be able to reach out to those buyers on a day-to-day basis,” Lechuga said.

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