Developer PMG has been accused of exaggerating the size of some of the units at its luxury Sunny Isles Beach Muse condominium by about 400 square feet in sales materials.
Pinellas County resident Stephen Hess was in line to buy three condos in the Carlos Ott-designed beachfront tower but now wants the return of $7.17 million in deposits, saying PMG floor plans and a fact sheet misrepresented condo sizes of 3,635 square feet, bigger than their actual size.
“Keep in mind, you can’t measure it when you buy it because it wasn’t built. So the purchasers are dependent on the floor plans and sales materials entirely,” said Michael Schlesinger, Hess’ attorney.
The 650-foot Muse rises 50 stories and has 68 condos that with floor-to-ceiling windows and private elevators, according to the PMG and Muse websites.
PMG showed floor plans and a fact sheet that included in the square footage areas like balconies, common areas, corridors and columns, which shouldn’t be in the calculation, according to the Miami-Dade Circuit Court lawsuit filed by Schlesinger.
The alleged deception was done in part through the “sly” use of the phrase “A/C area,” which refers to air conditioned areas, in sales materials even though that count included areas not under air, including the thickness of walls.
While the floor plans included a disclaimer specifying the “A/C area” includes exterior spaces, it was confusing and in a “tiny” font, according to the Nov. 5 complaint. State law requires disclaimers must be conspicuous in bold, capital letters and at least a 10-point font.
“Given the infinitesimal size of the print used to negate and disclaim the size of the units, it is only with nose-to-the-page squinting, or the aid of a magnifying glass, that one can discern what the convoluted and ambiguous disclaimer says,” according to the complaint.
Schlesinger, founder of Schlesinger Law Group in Miami, filed the suit along with J. Luis Quintana of the Quintana Law Firm in Coral Gables.
PMG attorney Josh Rubens denied the allegations, saying PMG’s unit size disclosures were accurate and in line with the actual sizes. He said the lawsuit stems from a different issue — Hess’ failure to close on the units.
“It was only months after plaintiffs failed to close on the units and the developer terminated their contracts that plaintiffs began alleging far-fetched claims reminiscent of the last cycle. This lawsuit is nothing more than a desperate attempt to recover the plaintiffs’ deposits,” Rubens, a partner at Kluger Kaplan, said in an emailed statement. “The developer’s disclosures, including regarding the size of the units and the use of deposit funds, have at all times been accurate and consistent with the condominium documents, Florida law, and the completed project.”
Hess filed the suit along with his Clearwater Beach Co. LLC, the contract holder on one of the units, against PMG-S2 Sunny Isles LLC. The limited liability company is a PMG affiliate, according to the state Division of Corporations.
While the unit size discrepancy is the main issue, Hess also alleged PMG broke state law by taking out a second construction loan Aug. 5, 2015, using Hess’ deposits as collateral. That voids the purchase contracts, which is what Hess is seeking along with a refund of his deposits as well as legal fees and declaratory relief in his favor.
Collectively, the three units would have cost $15.4 million as Hess signed a contracts for unit 1901 for $5.05 million with a $2.02 million deposit and unit 2201 for $5 million with a $2.5 million deposit. Clearwater Beach’s contract for unit 2101 for $5.3 million came with a $2.65 million deposit, according to the complaint.
Schlesinger said it’s up to the courts to decide if the method of measuring square footage used by developers misrepresents actual sizes. If so, then developers are violating state law.
“In other cases I’ve had, very famous developers and architects testified under oath that this was accepted practice by developers,” Schlesinger said. “If you look under air and you get someone to measure this, it’s materially less.”
In one such case, Schlesinger sued the developer of the condominium at 6000 Indian Creek Drive in Miami Beach. A February 2017 jury verdict said the developer made false and misleading statements in promotional materials and awarded Jocelyn Levy damages. Miami-Dade Circuit Judge Thomas Rebull set aside the jury verdict, and the Third District Court of Appeal affirmed the judge.
New York-based PMG has other high-end condos in South Florida, including the 180-unit Echo Brickell at 1451 Brickell Ave. in Miami and the 24-unit beachfront Sage Beach at 2101 South Surf Road in Hollywood.
Its X Social Communities division also is developing urban apartment towers. X Miami, a 464-unit downtown tower at 230 NE Fourth St., is the first company project in South Florida.