Oct 22, 2008 9:43 pm US/Eastern
Developer Claims Victory When Judge Tosses Suit
MIAMI (CBS4) ―
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The 50 Biscayne condo tower was built by the Related Group in Downtown Miami.
CBS
More than one hundred buyers of condominiums in downtown Miami are getting back $25-thousand for walking away from their contracts.
The payments are coming from the developer, The Related Group, following a lawsuit. The suit was tossed out by a judge this week and now both the developer and the buyers are claiming victory.
At the peak of the South Florida housing market, 50 Biscayne was sold out in less than a week. When it was finally finished years later, the condos were worth less than what buyers had agreed to pay. 144 buyers walked away from their contracts and the $100 thousand each had paid as a deposit.
"I'm guessing that a lot of people in this class don't know that Related Group owes them a check," said attorney Jared Beck.
In February Beck filed for a class action lawsuit on behalf of the remorseful buyers who wanted 25 percent of their deposit back, as stated in the contract, if they decided to walk away.
"We went back and forth over the course of weeks and months and didn't get the money back, so we were left with no choice to file a lawsuit," said Beck.
"We had never disputed that that was something he was entitled to. We offered that to him. We offered that to his counsel on numerous occasions," said Betsy McCoy, General Council for The Related Group.
After months of litigation, the judge tossed the suit after The Related Group proved they had been paying back the deposits.
"We are astoundedly happy about this. This is terrific result for the Related Group and also other developers who are facing this sort of baseless lawsuits," said McCoy.
Beck, who stopped short of claiming the class action suit forced the developer to pay up, believes it was a victory for the buyers.
"We think that the lawsuit certainly had an effect on the policy," said Beck.
This is the second major lawsuit in South Florida which side with a developer. In August, Tibor Hollo won a landmark case where the buyers wanted their deposits back claiming the condos at Opera Tower weren't directly on the water as the advertising brochures had suggested. The judge in the case sided with Tibor Hollo, saying that what mattered was in the contract and not in the ads.
McCoy hopes a lesson is being learned.
"This reckless and senseless litigation has just got to stop," said McCoy.
To re-enforce this message, council for The Related Group plans to demand more than $100 thousand in attorney fees from those involved in the class action suit. Beck says there is no basis for such compensation.
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