PMG, S2 score victory in legal battle at Muse Residences

UPDATED, March 5, 4:55 p.m.: Developers PMG and S2 Development scored a victory in a heated legal battle with a prospective buyer at Muse Residences in Sunny Isles Beach over the marketing of condominiums.

The lawsuit, filed in 2018 by a prospective buyer, alleged the development group misrepresented the size of the condos in marketing materials. The suit sought to recover more than $6 million in deposits.

A Miami-Dade Circuit judge ruled Tuesday in favor of the developers, saying that the plaintiff failed to close on the condo purchase and defaulted on the contract in 2018. The plaintiff no longer had any right to rescind or void the contract since he had defaulted, according to Judge William Thomas’ order granting motion for summary judgment.

The judge’s ruling could have widespread implications since buyers at other luxury condo buildings in South Florida have also filed suit alleging that the condos they purchased were not the size initially advertised in marketing materials.

“PMG and S2 are very pleased with the outcome of this case,” Ryan Shear, managing partner of PMG said in a statement. “We always believed the case had no merit as it was lawyer driven from the beginning and now that has become very clear, as ordered by the court.”

The judge also stated that the investor could not have “reasonably relied, as a matter of law, on the alleged misrepresentations contained in the advertising or promotional materials.”

Michael Schlesinger of Schlesinger Law Group, who represented the plaintiff, Stephen Hess, said they are planning to appeal the judge’s ruling or file a motion for rehearing.

On Thursday, he filed a motion to disqualify Thomas because his conduct and statements at a hearing held Monday “show that
he has prejudge[d] the facts and issues against the Plaintiffs,” according to the motion.

The initial complaint alleged Hess put down deposits in 2014 and 2015 to buy three condos at Muse at 17100 Collins Avenue, according to the suit.

The plaintiff alleged that sales materials advertised the “A/C Area” of the units would be 3,635 square feet. The buyer believed the “A/C Area” would be the actual living space of the condos. The suit alleges the units were actually about 400 square feet smaller because the “A/C Area” included exterior areas and includes structural columns, corridors, balconies and other common areas not part of the units.

The prospective buyer was unaware of what “A/C Area” meant because the lawsuit alleges it was only disclosed in a tiny “unreadable” disclaimer at the bottom of the floor plans.

Muse Residences’ development group is facing a similar lawsuit from another three shell companies in which plaintiffs allege the project did not deliver what was advertised, including the unit size. The development group contests the charges and filed a motion to dismiss the suit.

Daniel Lustig of Pike & Lustig, who represents the plaintiff in the lawsuit, said his case is ongoing and his client closed on the transactions, unlike in the Hess case.

Property Markets Group and S2 Development completed the 68-unit, 49-story Muse Residences tower in 2018. The building was designed by Carlos Ott and Sieger Suarez. Dr. Deepak Chopra, a New Age and alternative medicine advocate, designed the finishes for some of the units.

Sunny Isles has some of the tallest and most expensive luxury condo buildings in Miami-Dade County, but the market is faced with concerns of oversupply. Sunny Isles Beach’s luxury condo market priced at $3 million and up has 156 months — or 13 years — of inventory, according to Ana Bozovic, founder of the Miami-based brokerage and consulting firm Analytics Miami. A healthy market has below 10 months of inventory, she said.