UPDATED, July 17, 4:51 p.m.: Thirteen buyers at the Paraiso Bayviews condo tower in Edgewater are suing the Related Group for false advertising, among other counts, after the developer allegedly delivered units that were smaller than promised.
According to a lawsuit filed in late June in Miami-Dade Circuit Court, the 11 one-bedroom units purchased by the plaintiffs were missing dens that were included in marketing materials for the condos. The building is part of the four-tower Paraiso district development in the bayfront Miami neighborhood.
The plaintiffs, who include Florida companies and investors from Ecuador and Canada, are also alleging that Related delivered units with substantially less square footage than promised, and that the developer failed to notify each plaintiff that it had altered or modified the units prior to closing on their units at 501 Northeast 31st Street.
The Miami Herald first reported the lawsuit.
In a statement to The Real Deal, Carlos Rosso, president of Related’s condo development division, said the units were all delivered as sold.
“Each buyer received all the required documents, inspected their units, and chose to close. Now, nearly a year after closing on their unit purchases, the buyers raise this issue at the apparent prompting of a law firm looking to drum up a dispute,” Rosso said.
Developers often include the exterior of the walls in their square footage descriptions, which is why buyers sometimes file lawsuits. Back in 2015, a buyer at the Miami Beach Edition Residences sued over a nearly 20 percent difference in total square footage of a $12 million penthouse.
“The buyers’ counsel is using one method to measure at the time the buyers signed their purchase contracts and another method to measure at the time the buyers closed on their purchase, and he does so to make it appear that buyers received smaller units than what they purchased. They did not,” according to a spokesperson for Related.
The plaintiffs’ attorney, Steve Silverman, a partner at Kluger, Kaplan, Silverman, Katzen & Levine, told the Miami Herald that many of the buyers at Paraiso Bayviews are foreign buyers, and many closed through agents or without inspections. Silverman said the developer was obligated to provide written notice to the buyers of a material change to the units.
He compared paying for the den-less units to “going to McDonald’s and paying for a Happy Meal but not getting any French fries,” according to the Herald.
“I don’t think there’s any judge or jury who would not agree that not getting a den when you paid for a den is not a material change,” Silverman said, later adding that, “[Related] breached the contract and they are not in the position to challenge any of the conduct of the unit owners who were harmed as a result.”
The buyers said they all purchased units with one bedroom and a den on the 02, 03, 04 and 05 lines, each totaling roughly 750 square feet with dens measuring 9 feet by 5 feet and 7 inches, according to the lawsuit. But they allege they ended up getting 15 to 20 percent less space, and instead of a den, received units with a closet for the air conditioning handler, leaving no space for a sofa, coffee table and television.
Related completed the final piece of the Paraiso development, a half-acre park, less than a week before the plaintiffs filed their lawsuit. The developer began selling units at Paraiso in 2015. The four-tower, 11-acre project was designed by Arquitectonica and has about 1,400 condos within One Paraiso, Gran Paraiso, Paraiso Bay and Paraiso Bayviews, plus seven four-story townhouses.
Buyers at the Paraiso project included former Miami Marlins and currently New York Yankees outfielder Giancarlo Stanton, as well as former Yankees player Alex Rodriguez, tennis champion Arantxa Sánchez Vicario, retired San Antonio Spurs player Manu Ginóbili and DJ/producer David Guetta.
The developer financed construction of Paraiso Bayviews with a $95 million loan from Bank OZK, then called Bank of the Ozarks.