Okay, so we’ve had a chance to review (i.e., read) the legal filing related to the Beacon class action suit, and here’s our take on the whole “misrepresentation of unit size” issue: it’s subterfuge.
Or more accurately, it’s simply an attempt to claim “fraudulent inducement” in order to void the provisions in the plaintiffs’ purchase contracts which require arbitration (rather than lawsuits) and waives their rights to a jury trial (which the current filing demands).
Keep in mind that we’re not attorneys, we haven’t consulted any attorneys, and we’re simply speculating. That being said, perhaps there’s a properly trained legal professional who cares to comment? (Just go easy on us…)
∙ The Beacon Twenty-Two (And Their Dirty Laundry) [SocketSite]
∙ A Big Bad Lawsuit At The Beacon [SocketSite]
The Beacon owners that brought about this suit should be clubbed and skinned for what they have done to their fellow neighbors.
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I agree that the plaintiffs are trying to avoid the arbitration provisions with their square footage argument. This is the proper strategic approach if they would rather be in front of a court than an arbitrator. They have to allege some reason why the arbitration provisions in the sales contract are invalid and I don’t really buy the argument that the buyers could not engage in arms length negotiations with the developers due to “mass marketing” and “take it or leave it” contracts. These are expensive units being purchased by affluent buyers who can easily walk away. Although to be fair it is probably impossible to buy a condo in SF without agreeing to a broad arbitration clause.
On another front, I have been somewhat surprised by the vitriolic criticism of the plaintiffs by many comentators on this and other sites. Blaiming the plaintiffs for causing sale/resale problems strikes me as a bit like claiming to have solved the age old question of which came first, the chicken or the egg? If it is true that a seller represented a unit as 1200 square feet, and that unit turns out to be 1150 square feet, when the unit is resold the seller (our plaintiff) will need to disclose that the unit is 1150 square feet (or risk a lawsuit themselves). Thus it seems like the damage has already been done to the plaintiff and filing a lawsuit is simply their way to recuperate their future loss, which could be 30-40k at Beacon prices for a “loss” of 50 square feet. This is not to mention the serious defect allegations which would need to be disclosed to future buyers as well. In other words, the damage was done by the seller and it seems to me that the plaintiffs have every right to look out for their own best interests.
I am also skeptical that any individual homeowner is in a good position to negotiate with a developer regarding any issue, much less construction defect issues. Too often developers will not fix anything until they are forced to. And once all the units are sold, good luck getting the developer to fix anything voluntarily.
As for owners who are completely satisfied and worried that the litigation will hurt their resale/refinancing chances, isn’t this a risk you take when you buy into a condo project? Particularly a large condo project in SF that started out as apartments?
I read my contract and understood that I would go to binding arbitration BEFORE suing if I could not get my issues handled in what I thought to be the proper manner by the seller.
The “serious defect issues” that have been mentioned are typical of a new condominium or conversion property. The tales of bad wiring, flooding terraces, leaking roofs and super-hot units are smokescreen and false.
Common logic would dictate that a southern facing unit with large windows and no AC or cross ventilation would heat up without the proper window treatments and fans installed.
Caveat emptor people. Since when is no one responsible for their own decisions ?
“The “serious defect issues” that have been mentioned are typical of a new condominium or conversion property.”
Uh, no. I purchased a brand new unit in SF in 2000 and one in Vancouver BC in 2002, and none of these kind of issues came up.
Buying a condo that was built as a rental is just a bad idea generally. To me, it sounds like it’s just not a very good buildng. If you pay $800-$1000 sq/ft you shouldn’t have to deal with this kind of nonsense.
“I am also skeptical that any individual homeowner is in a good position to negotiate with a developer regarding any issue, much less construction defect issues. Too often developers will not fix anything until they are forced to. And once all the units are sold, good luck getting the developer to fix anything voluntarily.”
This is exactly what I had talked about previously, and now that it has proven to be true, I can’t help but feel compelled to repeat myself (from my previous post). Where are my damn Bruno Maglis?
“Oh, sure, those poor developers who lose millions … boo-stinkin’-hoo. Talk about contracts being weighted in the developer’s favor, I just recently had a developer’s agent try to tell me that the great thing about this building is that “if there are defects, you can call the developer, and they will come in and fix it at any time for the whole 10-year warranty. You don’t have to sue or go to court over fix-its/defects.” Woo-hoo, yeah, I totally want to give up that right. So when the toilet is leaking through the ceiling from the unit above, I’m sure the developer will pick up his phone when I call, throw on his Bruno Maglis and grab the first Ermenegildo Zegna polo he could put his hands on and be right over, huh?”
I have dealt with so many construction defect cases, and I know all their dirty little secrets. I wouldn’t be surprised if it finally comes out that these poorly chosen windows and the non-existent ventilation were the byproduct of “value engineering.”