Qatari Owner Of St. Regis Bal Harbour Sued By Condo Owners Over Allegedly Unsafe Conditions

Mysterious barrels of liquid labeled “ACID” in the garage of The St. Regis Bal Harbour Residences and Hotel are just one of the safety concerns condo owners raised in a lawsuit filed this week against the Qatari company that owns the luxury resort in Miami Beach.

The oceanfront buildings, which opened in 2012, have growing mold colonies, cracking concrete, a leaking garage and exposed electrical wiring, all conditions the residents say are the result of an absentee owner, according to the complaint, filed Monday in Miami-Dade Circuit Court by the Bal Harbour North South Condominium Association.

“Urgent action is required to return the Resort to a safe condition and protect the health of the residents, employees, and guests at the Residences and Resort — as well as the public at large,” the lawsuit says. “Without urgent assessment and repair efforts, the consequences may be catastrophic.”

The suit names the owner of The St. Regis Bal Harbour, Al Rayyan Tourism Investment Co.; its CEO, Tarek El Sayed; its local affiliate, Seldar Miami Holding; and the property manager, Gregory Polino, as defendants. The condo owners are asking the court to rule on 24 civil counts, including unjust enrichment, gross negligence and breach of fiduciary duty.

ARTIC and Polino didn't respond to Bisnow’s requests for comment.

Starwood Hotels & Resorts Worldwide opened the condo-hotel in 2012 and sold the property to ARTIC for $213M in 2014. The lawsuit says ARTIC has since neglected basic maintenance of the garage and common spaces, raising safety concerns among the owners of the 204 condo units.

ARTIC is a subsidiary of Al Faisal Holding Co., owned by Sheikh Faisal Bin Qassim Al Thani, who has a net worth of $1.8B and is a relative of the Qatari royal family, according to Forbes.

“I’ve never seen issues like this, as pervasive as this, in a building that’s 12 years old,” Juan Morillo, a partner at Quinn Emanuel Urquhart & Sullivan LLP who is representing the association in the lawsuit, told Bisnow in an interview. “It is extraordinary for a building of this relative youth to be in this state of disrepair.”

The suit doesn't specify how much the plaintiffs are seeking in damages, but Morillo said the residents are asking a judge to compel The St. Regis' owners to fully fund the needed repairs and maintenance, which are estimated in the “tens of millions of dollars.”

The association filed dozens of pictures showing the state of the buildings with the suit, including images of temporary posts appearing to hold up the garage ceiling, cracks in concrete columns, exposed electrical wiring, corroded pipes and sprinkler systems, and pallets of white barrels, some labeled “ACID” with red tape.

The building is also plagued by water intrusion and flooding, causing structural, mechanical and electrical defects, according to engineering reports filed as exhibits with the suit. The lawsuit says an engineer hired by ARTIC told the residents the building hasn't had a comprehensive maintenance program for 12 years, which has accelerated the damage.

“We’re not complaining about cosmetic things,” Morillo said. “Just to be blunt about it, it’s not like a bunch of rich people are complaining about the wallpaper and the painting or the lighting. We’re talking about serious structural issues.”

While the lawsuit made a direct reference to the collapse of the Champlain Towers South building in Surfside in June 2021 that killed 98 people — just over a mile south of The St. Regis Bal Harbour — and says ARTIC “created a risk of collapse” at the property, Morillo told Bisnow that isn't an immediate threat, or else the residents would have already evacuated.

But neglect has made it increasingly hazardous. Morillo said the most immediate risks are falling debris, exposed electrical wiring and pervasive mold that has left residents ill. Third-party structural engineering and mold analyses filed with the complaint say urgent action to assess the buildings is required to protect the health of the residents, employees and guests. 

The lawsuit also alleges the ARTIC took $1.5M from the condo board's reserve fund to spend on renovations to the hotel's restaurant. Residents haven't been able to investigate the building's finances because of the ownership arrangement between unit owners and ARTIC, the suit says. 

“Those funds should’ve been used for maintenance and repair and not for a vanity project that benefits the defendants financially,” Morillo said.

The arrangement between the condo-hotel owner and the residents stipulates that ARTIC is responsible for and has authority over the property's common spaces and amenities, even the residents' balconies. 

That's why one of the residents' requests for a jury trial in Florida's 11th Judicial Circuit for Miami-Dade County, which hadn't assigned a case number to the suit as of Wednesday afternoon, is to rule that the condominium's governing documents violate the Florida Condominium Act.

Last year, the Florida Legislature amended the state's condo law to give more control to commercial owners like ARTIC. In many cases, residents lack control over the dues they pay and the management of their buildings, allowing lot owners to avoid structural assessments, The Real Deal reported. 

Morillo said the amendment doesn't apply to The St. Regis because its governing documents specify that the Condo Act applies as it stood at the time their agreements were signed. 

“The amendments, which — I apologize for using this term — which screw the tenants to the benefit of the landlords and the condominium owners, do not apply in our particular instance,” he said.

Ethan Rothstein contributed to this article.