Downtown San Jose condo war widens as new real estate lawsuit emerges

Bidders, attorneys, a trustee representative and observers gather outside the Santa Clara County courthouse for the auction of condominiums in a downtown San Jose housing tower that’s located at 188 West St. James Street. The auction was held April 8, 2024.have spawned a widening legal war now that a troubled China-based real estate firm has filed a new lawsuit in the increasingly tangled case.

China-based Z&L Properties, the developers of the housing highrises, fell behind on homeowners dues. Typically, a buyer of one of the condos in the highrise complex would be responsible to pay the dues. The developer is on the hook for the payments for condos that are completed but unsold. Morgan Cahill-Marsland, an attorney with law firm Nixon Peabody, which is representing Z&L Properties, gave a representative of the trustee a copy of the temporary restraining order. In addition, Cahill-Marsland made people in attendance at the auction — including prospective buyers — aware of the existence of the judge’s order.

The auction involved just a small portion of the condos in the double-tower complex, which has more than 600 units. Each tower has slightly more than 300 residential units. Z&L has sold more than 100 condos in the western tower. The western tower also has ground-floor commercial condominiums, which remain unoccupied. The eastern tower is unoccupied.

As for the recent condo auctions, Z&L has 90 days to regain ownership of the just-sold units — if the company pays the delinquent dues, late fees and penalties for each condo. “Prices this low could affect the future values for the condos in the tower,” David Taxin, a partner with Meacham Oppenheimer, a commercial real estate firm, said in an interview in the wake of the auction.With a baby due in July, a South Bay couple searches for their first home. What could $1.5 million buy?

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