Wednesday, April 13, 2016

Developer’s Misrepresentations Relating to the Nature and Quality of Views from High-Rise Riverfront Condominium Results in Award of Treble Damages

Developer’s Misrepresentations Relating to the Nature and Quality of Views from High-Rise Riverfront Condominium Results in Award of Treble Damages

            Were you promised “breathtaking,” “unparalleled waterfront views” or an “unbelievable panoramic range” of views of the Hudson River and Manhattan skyline from your condominium unit, only to have your view obstructed by a neighboring building constructed after your purchase?  Depending on the circumstances surrounding the sale and marketing of your condominium, you may be entitled to damages for the diminution of the value of your unit resulting from the obstruction of your view, and possibly treble damages, attorneys’ fees and costs.  This was the outcome in Etelson v. South Shore Urban Renewal, LLC,[1]where the Appellate Division affirmed a jury’s finding that a developer deliberately misled purchasers in marketing materials when the developer had actual knowledge that views in the South Shore condominiums would not be unobstructed. 

            In Etelson, ten unit owners filed an action against the developer alleging violations of the New Jersey Consumer Fraud Act for, among other things, the loss of their view of the Manhattan skyline.  The developer actively marketed South Shore condominiums for its unparalleled waterfront views, which were depicted on the developer’s website, display boards, sales brochures, billboards, handouts and videos.  A painting of the condominium in the developer’s sales offices even depicted a smaller building being constructed in front of South Shore.  In contrast to the marketing materials, the developer was in fact actively seeking approval, and eventually constructed, a building obstructing the plaintiffs Manhattan skyline views.  As a result, the Court found that the developer could not hide behind generalized warnings and disclaimers in the Public Offering Statement, Master Deed and sales contracts.  The jury in Etelson awarded the unit owners $1,253,420.00 in damages for diminution in value of their units, and the Court entered a final judgement in Plaintiff’s favor for $4,817,638.12, which included a trebling of damages, attorneys’ fees and costs pursuant to the New Jersey Consumer Fraud Act. 

The knowing concealment, suppression, or omission of any material fact in connection with the sale or advertisement of real estate is strictly prohibited by the New Jersey Consumer Fraud Act.  If you are a condominium owner, and the developer failed to disclose certain material facts in connection with the sale or advertising thereof, you should consider consulting with an attorney.  In the same vein, developers should always consult with their attorney prior to making any representations in marketing materials. 

[1] Docket No. A-0570-11T4 (App. Div. March 10, 2014). 

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