In a new sign of growing financial troubles for American Invsco, the nation's largest condominium converter, its unsold units at a Bethesda high-rise apartment building have been ordered to be sold in foreclosure.
Montgomery County Circuit Court Judge Richard B. Latham Sr. signed a foreclosure decree yesterday, authorizing two trustees to sell Invsco's units at the Grosvenor Park III building to pay off $123,000 in fees the developer owes the condo owners' association there, the judge's office confirmed.
Invsco can keep the units from going into foreclosure by paying the $123,000 before its property is sold at auction, within the next 45 to 60 days, the association's lawyer said.
As long as a development company continues to own units at a condominium or co-op, it must pay the monthly maintenance fees on those units, just as anyone buying into the project does.
Invsco has been delinquent since November in its condo fees on 14 apartments, 71 parking spaces, a grocery store and a beauty shop it owns at Grosvenor Park III, said association President Robert E. Doyle. In addition, the $123,000 debt to the association includes a promised contribution to the capital of the project, interest charges, late fees and attorneys' fees, said the owners' lawyer, Arnold Spevack.
The owners at the Grosvenor Park II high-rise next door, who have a separate association, have initiated foreclosure proceedings against Invsco, too, claiming that the developer owes them $60,000 in delinquent fees on five apartments and 100 parking spaces there.
These may be the first foreclosures anywhere on the condo developer, which has been selling off property throughout the country and divesting itself of other assets to pay off its large debts. An Invsco spokesman said he could not state conclusively that these were the first but said he knew of no other actions that had proceeded this far.
David Varner, spokesman for American Invsco in its Chicago headquarters, declined further comment on the foreclosure proceedings.
"It has become a legal matter. We are aware of the foreclosure, but the company will have no comment on it," Varner said.
Invsco also owns the Promenade apartments in Bethesda, which was converted to a cooperative over the objections of the tenants there. Jeffrey Cohen, president of the owners' association there, said Invsco now is current on its maintenance fees there but that the co-op owners are negotiating with Invsco over $200,000 they say the developer overcharged them on property taxes.