The units consist of studios, and one- and two-bedroom suites ranging from 550 square feet to 1,165 square feet. Resales are currently listed in the low $300,000s to about $1 million. Owners in the Fontainebleau III can put their units into the hotel program and rent them out.

Those projects are known as condo hotels, which were popular during the condo boom. Now unhappy owners are increasingly suing the hotel developers and operators.

The Resort at Singer Island Hotel Condo Association recently sued hotel owner and operator Urgo Hotels in West Palm Beach federal court challenging the high maintenance fees that Urgo is collecting from the owners.

A group of owners at the Mayfair Hotel & Spa in Miami are suing developer Ceebraid-Signal, which controls most of the units at the Mayfair and runs the hotel. The owners claim Ceebraid-Signal has imposed excessive fees to pressure owners to sell their units at a discount to Ceebraid-Signal so it could convert the property back to a conventional hotel. That case is pending.

2008 Project
Fontainebleau Florida, an affiliate of Soffer's Fontainebleau Resorts and owner of the hotel, built the residential 286-unit tower in 2008. It was part of the estimated $1 billion remodeling and expansion of the 54-year-old resort.

The condo association, Fontainebleau III Ocean Club, sued the developer in January. Now, the developer has filed a motion to have the suit dismissed. The case is pending before Miami-Dade Circuit Judge Lester Langer.

Fontainebleau Florida said the owners were aware of the property management agreement before they bought their units. The developer also said the hotel--not the unit owners--owns the tower's balconies, exterior walls, terraces, roof and other disputed structural components. The owners can't seek compensation for construction defects on hotel property, according to the developer.

Coral Springs attorney Gerard Tuzzio, of Roberts Reynolds Bedard & Tuzzio, represents the developer. He was traveling and could not be reached for comment.

Attorney Helio De La Torre, with Siegfried Rivera Lerner De La Torre & Sobel in Coral Gables, who represents the Fontainebleau III Ocean Club, declined comment.

If the condo association successfully cuts its ties to the hotel, the Fontainebleau would lose a critical source of revenue as it works with lenders to restructure more than $620 million in debt incurred in 2005 when it was remodeled and expanded.

The Fontainebleau re-opened in late 2008 just as financial markets were seizing up and the global recession was taking hold. Although credit markets are showing signs of recovery, large financial deals are still difficult to put together, especially for hospitality properties coping with a soft tourism market.

In September, Soffer and Nakheel stopped making payments to a syndication of lenders led by Bank of America, according to Bloomberg News. Earlier this month, they offered the resort's lenders a restructuring plan to extend the senior loans maturity by four years to 2016. It is not clear whether the lender accepted the deal.

Soffer didn't return a phone call seeking comment.

Soffer and his construction company, Turnberry Construction in Aventura, face nearly $60 million of claims by contractors who worked on the 1,500-room Miami Beach hotel. Contractors have filed at least 39 lawsuits seeking payment. The contractors include Matrix Construction Group, which seeks $9.4 million; Miami Drywall and Stucco, $4.09 million; and Site Technologies, $2.06 million.

Soffer in Februay lost control of the bankrupt Fontainebleau Las Vegas casino and resort. Lehman Brothers in February sued Soffer and Fontainebleau Resorts to recover $400 million it provided to build the Nevada project. The partially built project was purchased by financier Carl Icahn for $156 million.

The condominium association's eight-count lawsuit names Fontainebleau Florida and general contractor Coscan Construction, which built the high-rise. The unit owners want the alleged defects repaired and are seeking damages and undisclosed compensation.

The association claims the developer failed to disclose construction defects to the owners before they closed on their units. It also claims the developer failed to make repairs, a breach of the purchase agreements.

According to the suit, construction defects include cracks in concrete slabs and walls, according to an engineer's report prepared for the association by M2E LLC in early January. It is not uncommon for condo owners to sue developers over alleged building defects.

After owners in some newly built condos take control of their association from a developer, they hire an engineer to identify structural problems. Many end up suing the developer over the defects.

The Fontainebleau III Ocean owners gained control of the association in January 2009, according to the suit. The owners also want Langer to order the developer to turn over financial records and other documents to the board of directors.

The complaint also seeks to amend the condo's documents to end the association's relationship with Soffer's hotel management company.

"[The condo documents] force the association to be managed by the Fontainebleau Hotel instead of having the ability to select its own management company and is forced to pay management fees over which it has no control," according to the complaint.