Fairchild Coconut Grove under construction - via Google Maps

The Fairchild, a new luxury condo development in Miami’s upscale Coconut Grove neighborhood, is in debt to the general contractor for over $1.4 million, according to a lien claim filed by the construction firm.

Ortega Construction Company, LLC was hired by Grove Bay Properties, the owner of the Fairchild Coconut Grove, in 2018. Since signing the contract, Ortega has provided labor, materials, and other related services for the construction of the luxury condominiums. The total value of the contract was $23.5 million.

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Ortega furnished labor and materials in May of 2018 through May of 2020. According to their lien claim, Ortega remains unpaid in the amount of $1.4 million.

In order to secure the unpaid debt, Ortega filed a construction lien with the Miami-Dade County Clerk on August 11th, 2020. A construction lien, commonly known as a mechanics lien, provides unpaid contractors with a security interest in real property.

According to Florida’s construction lien laws, claimants have one year after filing to foreclose on a mechanics lien. The foreclosure process involves a lawsuit, and could lead to the forced sale of the property to satisfy the debt owed to the contractor.

As of right now, Ortega are well within their rights to enforce their lien claim. However, the act of filing the mechanics lien is usually enough to get money moving again and recover an unpaid debt.

The Fairchild Coconut Grove is a luxury residential building that broke ground in April of 2018. It was developed by ROVR Development, a Miami-based developer, with Ortega Construction named as the general contractor on the project. Max Strang served as architect for the development.

The Fairchild features 26 high-end condos that range in price from $1.6M to $4.6M. It also has private dock access, a rooftop pool, gym, and other amenities.

The condo was funded in part by a $27M construction loan provided by Ocean Bank, estimated at 50% of the property value. The developer also secured an investment from A-Rod Corp, a company headed by New York Yankees legend Alex Rodriguez.

The condos were completed in fall of 2019.

A Hotbed of Construction Disputes

In recent months, Miami has become a hotbed of construction disputes across a wide range of developments and projects. Between January and June of 2020, construction businesses filed more than 1,800 mechanics liens in Miami-Dade County, accounting for approximately $223 million in unpaid construction bills.

Despite a slowdown in construction starts, industry employment is on the rise across South Florida. Developers and investors are already making moves to take advantage of a potential rebound. This is welcome news to condo developers, as many have been forced to lower unit prices to compensate for a slump in purchases.