SAN JOSE -- The Santa Clara County Board of Education and former Superintendent Charles Weis have settled a lawsuit over the downtown luxury condominium and its underwater mortgage, in an agreement thatleaves the board with little more than the title to the home and an underwater mortgage.
In the settlement, Weis agreed to pay the Santa Clara County Office of Education $13,400,to facilitate transferring ownership of his San Jose condo to the county office.
When he was hired in 2008, the county board extended Weis a loan -- part interest-free and part low-interest -- to purchase the condo for $890,000. The terms of the loan did not require him to make any payments until he left office.
But when he retired 1-1/2 years ago, under less-than-amicable terms, Weis did not repay the loan and tried to transfer ownership of the 18th-floor condominium, which overlooks the Guadalupe River, to the county office. At that point, he had made less than $16,000 in interest payments.
Today, the condo has a market value of $717,161, according to Zillow estimates. That, plus the payments Weis agreed to make, is more than $200,000 short of the $952,410 that the county board was asking for in the suit. And that doesn't include annual interest of about $12,000 it wanted Weis to pay, nor any legal costs.
"We took a legal route to recoup as much investment as we could," County School Board President Leon Beauchman said. "We are happy to put this behind us."
Beauchman acknowledged that the settlement is less than what the board would have liked, but said, "the law is what the law is, and it protects the homeowner."
Weis, reached at his home in Ventura County, declined to comment on the terms of the settlement. He said, "It took a long time to get done. I'm glad we got it finished."
The county board had filed suit in December 2012, seeking to reclaim what it alleged Weis owed as of Nov. 20, plus daily interest charges. The board alleged that Weis failed to pay taxes, insurance and fees on the condo and that he removed light fixtures and ceiling fans when he moved out.
Weis said he used some of his employer's loan to remodel the corner unit in the Axis building before moving in. While the county board has not had the unit appraised recently, during the summer it was estimated to be worth up to $745,000, Di Salvo said.
The suit had claimed that Weis did not use the condo as his primary residence. During his four-year tenure as superintendent of Santa Clara County schools, Weis maintained a home in Oxnard, where his wife, Patricia, reportedly stayed. In 2011 the couple also purchased a vacation home in Twain Harte, in the Gold Country, for $350,000.
The county school board extended similar favorable home-loan terms to current Superintendent Xavier De La Torre, who later agreed to make monthly payments on the principal and interest.
Contact Sharon Noguchi at 408-271-3775. Follow her at Twitter.com/NoguchiOnK12.