The sale of a residential development site in Hawthorn East has hit a snag after the real estate agency charged with marketing the off-the-plan apartments has moved to block completion of the deal over an unpaid bill.
Castran Gilbert has filed a lawsuit in the Supreme Court alleging that developer Body World Property Investments has failed to pay nearly $195,000 in sales commission.
The company is owned by Bruce Gray, founder of the BodyWorld gyms in Balaclava and Hawthorn East. Mr Gray has received planning permission to build a five-storey building with 28 apartments and a gymnasium at 849 Burwood Road.
In August, Body World Property Investments reportedly sold the development site to Queensland-owned group Red Star Hawthorn. The sale price is unknown.
Castran Gilbert claims the developer violated its agreement to immediately pay the commission due if the site was on-sold, according to court documents. The agency has petitioned the court to award it $194,658.75 from Body World and block Red Star from lodging a mortgage over the land.
Castran Gilbert chief executive Paul Castran declined to comment.
Body World owner Bruce Gray has played down the dispute. "I don't know anything about [the lawsuit]. There's no dramas," he said. "It was a joint venture with Red Star rather than a sale. By arrangement we'll be paying the commissions at the end of the thing."
But Red Star Hawthorn director Schlomo Lubarsky said the property had been purchased outright, albeit on a conditional basis.
BusinessDay understands the lawsuit, which was filed last week, may be discontinued in light of a mooted out-of-court settlement.
Construction is due to begin on the development in early 2014. Mr Gray paid $1.5 million for the site in 2006.