Atlantic Station Condo Owners Lose Lawsuit (Atlanta: apartments, foreclosed, condominium)

[tigers84]

Originally Posted by arjay57

Maybe they'd been told the developer was going to put in a smaller building that wouldn't block the view.

Maybe they were told it was an alien landing site and therefore couldnt be disturbed.

I was recently informed, by email, that I may have come into a large fortune - from Africa, of all places! Not sure why, but who cares, I take everything at face value.

Ive looked at quite a few high rises. Upon inquiry, a condo salesperson could never GUARANTEE me a building wouldnt be built that might obscure a unit's view. Evey one of them said, basically, when pressed, well, might not happen soon in this market, but it could, as the developer cannot guarantee what other developers might do, or even what they might do, in the future.

Wonder how many people in NYC have, over the years, had their views obscurred? New buildings get built, it happens.

[arjay57]

Originally Posted by tigers84

I was recently informed, by email, that I may have come into a large fortune - from Africa, of all places! Not sure why, but who cares, I take everything at face value.

Well, that's the point. Anybody can stick it to you if they want, and "having it in writing" isn't going to make much difference. As zillions of people learn every day.

Obviously everyone knows new buildings get built, but that isn't what this was about. These folks claimed they'd made a specific deal with their developer -- and paid for it -- not to erect a building across the street that would block their view. Then a year later he did it anyway.

That's like me building a subdivision and charging extra for certain lots because "they will always have the best, unobstructed views in the neighborhood." I even put that in my sales brochures and on my website, and my agents (on my instructions) use it as a major selling point. If two years later I build a Walmart Supercenter across the street, some of those folks may feel they've been had.

But hey, life is hard. As the cynics say, contracts are made to be broken.

[Mishap]

I think this was a hail mary way out for those who found themselves on the wrong side of the housing crisis. Most of these people were in it for profiteering to begin with. The entire Twelve building was bought by speculators that couldn't hold onto the building once their teaser rate mortgage adjusted into the double digits. You can see that most of them listed their units for 200-300k more than they paid in '08 (bought in '06) w/ the hope to pass it onto some other sucker once the foundation for The Atlantic took shape.

The owner referenced in the AJC article has his unit for sale at 600k now. He had it listed 1.4M in '08 (paid 800k in '06). Somehow I don't think he was going to share any potential profits w/ Novare for the 600k he added to the price. At best he'll probably clear out owing the bank 200-300k.
361 17th St NW UNIT 2601, Atlanta, GA 30363 MLS# 4176648 - Zillow
http://jimfletcher.net/wp-content/up...-on-twelve.pdf

His next door neighbor paid $1M and it was just sold in foreclosure at 300k:
361 17th St NW UNIT 2602, Atlanta, GA 30363 - Zillow

Another neighbor...the one that once bragged on the AJC how amazing her view was seems to have sold her unit for a 500k loss:
361 17th St NW UNIT 2621, Atlanta, GA 30363 - Zillow

[arjay57]

Originally Posted by Mishap

Somehow I don't think he was going to share any potential profits w/ Novare for the 600k he added to the price.

Why does a buyer have any obligation to share his profits with the seller? If that's true I'm going looking for some of the people who bought property from me over years.

In this case it doesn't look like there are any profits to be shared anyway, just some whopping losses. Not really uprising, since the view has been destroyed.

[Mishap]

He doesn't have any obligation just as Novare doesn't have any obligation to preserve the guy's view especially if it's explicitly written in the contract views change.

Just stating this guy like most of the other people in that building paid grossly inflated prices b/c they fully believed they'd make out like bandits as the price of housing continued growing exponentially. No one held a gun to their head to pay $400+/sqft for unfinished concrete atop a brownfield. When it turned the other way, The Atlantic was just a potential opportunity to try to nullify their contract and escape collapsing prices especially in the train wreck that is that building. If that owner had gotten out ahead of the construction crane and profited 600k for 2yrs of ownership, Novare wouldn't have any claim to the profits just as the new owner wouldn't have any recourse once his view was obstructed.

Novare's not among my favorite companies but you've got to admit they did a very good job of finding and timing advantageous contracts for themselves. No recourse loan on the Atlantic so handing back the keys to the building once finished got them out of 400 illiquid luxury condos w/ only the price of the land lost (bank that financed construction lost 170M and went under). They're still surviving and building (albeit much smaller scale).

[arjay57]

Originally Posted by Mishap

He doesn't have any obligation just as Novare doesn't have any obligation to preserve the guy's view especially if it's explicitly written in the contract views change.

What if the seller explicitly represented that "any development south of the building would be low- to mid-rise office buildings" which would not interfere with the views, put that on its website and sales brochures, instructed its agents to use that as a selling point and charged a substantial premium for it?

Do you think putting something in the "fine print" makes it okay to make those representations and then turn around and do the exact opposite?

[Mishap]

Novare doesn't own every piece of land from AS to downtown. What would happen if the DOT decided to build a super ugly elevated 20 story viaduct where the connector is now? I'm guessing Novare was smart enough not to explicitly state the building type in the contract since any lawyer would probably get disbarred for something that stupid. If they did go and guarantee the view, I'm sure the court would have ruled differently given The Atlantic was well within their control. Novare's bread and butter is condos (office towers are relatively rare for them) and given they had to enact a lottery to control demand for Twelve (@400/sq ft, you're escaping reality of the market), what else would they expect Novare to start building at first chance on land they already owned?

This wasn't a fine print situation...these people fell in love w/ the idea of making huge profits from their view and made an irrational decision to buy. If such huge upside was possible, you'd better expect the developer to want in on that view. Novare knew exactly what they had and they went all in w/ the Atlantic. The mere fact they didn't completely go under is amazing given they were just as speculative as buyers in Twelve...they just got better financing from banks.

Views are always big selling points and you have to be strategic in where you buy. If your neighbor's an existing recent mid-rise construction, more than likely it won't get demolished right away. I understand the desire to preserve your investment (it's quite a huge amt of money) but if you see any clear ground between you and your view, plan on something coming in to fill it. If it's a large swath of parking lots, you'd better hope you live 40-50 stories up where it gets hyper expensive. Also, if the premium was ~10-20k/unit, what damages could Novare possibly pay out that the lawyers wouldn't immediately absorb? Everyone in that building paid a huge premium to be there...south side views were just supposed to be the icing on the cake for flippers.

BTW, is there a similar lawsuit for 1010 Midtown buyers that could briefly see Piedmont park before the other half of 12th and Midtown blocked it up?

[arjay57]

Originally Posted by Mishap

Novare doesn't own every piece of land from AS to downtown. What would happen if the DOT decided to build a super ugly elevated 20 story viaduct where the connector is now? I'm guessing Novare was smart enough not to explicitly state the building type in the contract since any lawyer would probably get disbarred for something that stupid. If they did go and guarantee the view, I'm sure the court would have ruled differently given The Atlantic was well within their control.

Well, you can read it for yourself. The Court of Appeals said:

So viewed, the record shows that, in 2005 and 2006, Appellees [Novare] marketed and advertised condominiums at the Twelve to the general public and Appellants as having "spectacular city views" of downtown Atlanta and provided written materials regarding same. Appellees also promised and represented to Appellants that any future development directly opposite the Twelve would be a low to mid-rise office building which would not obstruct Appellants' city views and would not be built for at least five years. In doing so, Appellees knew these representations were false and concealed from Appellants their planned development of the Atlantic, a 46-story tower, directly across from the Twelve.

It looks like the Supreme Court went the other way and concluded that Novare could get out on the fine print.


Court of Appeals of Georgia

Supreme Court of Georgia

[tigers84]

Originally Posted by arjay57

Well, that's the point. Anybody can stick it to you if they want, and "having it in writing" isn't going to make much difference. As zillions of people learn every day.

Actually, its not the point at all. Statements made IN WRITING WITHIN A LEGAL CONTRACT make all the difference. Abrogating a legal contract is no small matter.

Of course, random emails from total strangers making absurdly bogus claims do not qualify as such. I mean, duh.

You have a remarkable ability for letting sarcasm and irony fly right by you, totally unnoticed. Amazing.

Originally Posted by arjay57

Obviously everyone knows new buildings get built, but that isn't what this was about. These folks claimed they'd made a specific deal with their developer -- and paid for it -- not to erect a building across the street that would block their view. Then a year later he did it anyway.

That's like me building a subdivision and charging extra for certain lots because "they will always have the best, unobstructed views in the neighborhood." I even put that in my sales brochures and on my website, and my agents (on my instructions) use it as a major selling point. If two years later I build a Walmart Supercenter across the street, some of those folks may feel they've been had.

But hey, life is hard. As the cynics say, contracts are made to be broken.

If there is evidence of developer promises, printed sales material or website wording guaranteeing that views would remain as is, the plaintiffs would have had an excellent case. The problem is, they did not. They just claimed that the (powerless and unknowing) sales people told them so, and that they then viewed such as contractual. The contract is the contract, anything else is just bluster. Contract law is well established in the US, but even it cannot prevent stupiduty or naievete.

Originally Posted by arjay57

Well, you can read it for yourself. The Court of Appeals said:

It looks like the Supreme Court went the other way and concluded that Novare could get out on the fine print.

Court of Appeals of Georgia

Supreme Court of Georgia

I have no love for Novare. But in my experience all high rise contracts contain language that there is risk of views being obstructed in the future. This wasnt Novare's first rodeo. I am confident their lawyers made sure such language was clearly and plainly stated withiin their contracts.

This doesnt mean that a salesperson, seeking to get a deal done, might not have speculated, or suggested, something different from the contract. But again, anyone who takes the mere opinion of a powerless and unknowing sales person as absolute gospel is either willfully naieve or mentally impaired.

[arjay57]

Originally Posted by tigers84

If there is evidence of developer promises, printed sales material or website wording guaranteeing that views would remain as is, the plaintiffs would have had an excellent case. The problem is, they did not. They just claimed that the (powerless and unknowing) sales people told them so, and that they then viewed such as contractual. The contract is the contract, anything else is just bluster. Contract law is well established in the US, but even it cannot prevent stupiduty or naievete.

Well, there's no doubt these buyers are up the creek. Too bad we live in a world where it's okay for a company to promise you something, knowing that's it not true and that they already have plans to do the exact opposite. It seems increasingly common for folks to do business not on the basis of what's true, but what they can get away with.