The Real Deal Miami

Suit alleging false advertising of Miami Beach Edition PH moves forward

In September, developer reduced square footage on MLS, following filing of February suit

October 27, 2015 05:30PM
By Katherine Kallergis

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Ian Schrager and the Miami Beach Edition

Ian Schrager and the Miami Beach Edition

The buyer at the Miami Beach Edition Residences who sued earlier this year over alleged fraud related to the square footage of a $12 million penthouse has filed a motion, citing the unit’s MLS listing with updated square footage.

The suit centers around the advertised interior square footage of unit #1404, versus the alleged actual square footage, among other issues. A hearing is set for Dec. 1

Rising Sun Ventures and Edition Penthouse Ventures, entities managed by attorney Paul Gleiberman, filed the motion for permanent injunctive relief in the Circuit Court for Miami-Dade County to urge the developer Seville Acquisition to stop “falsely advertising” interior square footage as well as the identity of the developer and creator of the Miami Beach Edition.

Edition Residences, at 2901 Collins Avenue, is a luxury, oceanfront hotel and condominium project, developed by Ian Schrager, renowned architect John Pawson and Marriott International.

Schrager declined to comment on the motion, but has disputed the initial allegations in the original lawsuit, calling the suit an outrage. “To say that this lawsuit is completely frivolous and disingenuous is to give it the benefit of the doubt,” Schrager said in a statement at the time.

In that suit, filed in February, the investors Rising Sun Ventures and Edition Penthouse Ventures said they placed $3 million in deposits toward the $12 million purchase price of unit #1404.

At $12 million, the price translates to $2,717 per square foot, which the developer’s sales agent deemed “a very solid deal,” and the plaintiffs’ broker stated was “the best value on the beach,” according to the lawsuit.

But when the buyer sought financing and had a certified appraiser measure the apartment, it was discovered that it had 3,576 square feet, or 19 percent less than described, according to the suit. That translates to $3,355 per square foot, or 23.5 percent more per square foot than at 4,416 square feet.

According to the latest motion, filed in October, the developer in September advertised interior square footage of unit 1404 as “no more than 3,725, approximately 15.6 percent smaller than the 4,416 interior square feet” originally advertised in June of last year.

The MLS listing now uses the allegedly correct square footage, according to the motion. The Miami-Dade County property appraiser also uses that square footage, which is 3,725 square feet.

Gleiberman declined to comment on the motion.

“The developer has essentially admitted its culpability and fraud by seeking to correct some, but not all, of its advertising, sales and promotional materials to reflect that Unit #1404 consists of approximately 3,725 square feet of interior space,” the motion said, “as opposed to the 4,416 square feet of interior space originally advertised” and represented to the buyer as recently as April of this year.