September 21, 2006
Now Serving: The Watermark
A lawsuit was filed against the Watermark on September 14th (case CGC-06-456175). The allegation? You guessed it! Square Footage! Does anyone think [Catalano] is the patron Saint of Condo Measurement…
San Francisco Superior Court case number CGC-06-456175 is identified as “CATALINA GARCIA VS. SAN FRANCISCO CRUISE TERMINALS LLC, A LIMITED et al” with the cause of action "CONTRACT/WARRANTY.” (Anybody care to share the filing/complaint?)
And while it might not be a class action suit (yet?), and it’s probably just a coincidence, we can’t help but notice it was filed the day after the Proposed SF Cruise Ship Terminal Sunk. Unfortunately, we’ve just filed this one under “trends.”
First Published: September 21, 2006 9:31 AM
Comments from "Plugged In" Readers
I am an owner at the Watermark. Not only am I going to fight against this frivolous lawsuit and stand on behalf of the developer but I will countersue "Catalina Garcia" and anyone else for driving down the value of my home. This is my home and I am not going to allow it to be used for them to make money. Good things I have already made friends with other owners in the building.
Posted by: Enraged at September 21, 2006 10:25 AM
Countersue? Talk about driving down values by keeping the building in litigation for as long as possible.
Posted by: Anonymous at September 21, 2006 11:45 AM
Are they suing partly because the Cruise Ship Terminal project has been canceled? And what constitute the SqFt of your homes these days? For condos, I believe it's measure from interior wall to interior wall.
If I was to buy any condo in SF, I would definitly hire a certified appraiser or home inspector to measure the Sqft before buying...
Posted by: RinconFan at September 21, 2006 11:54 AM
I think the buyers of the watermark have bigger problems than misrepresentation of the sq footage. But the lawyer does sound like a [Removed by Editor].
Posted by: Mike at September 21, 2006 12:10 PM
This guy is ridiculous. I kind of see it as a non-issue though. Has there been any traction on any of the lawsuits?
Posted by: DesignGuy at September 21, 2006 12:17 PM
I bet the sellers of The Infinity and One Rincon are busy checking their sq ft numbers right now... or making sure their contracts are Catalano-proof.
Posted by: Amen Corner at September 21, 2006 12:52 PM
These lawsuits seem to be targeted at fairly high profile buildings with lots of units. I'd be willing to bet that the Brannan or 88 King is next...
Posted by: Anonymous at September 21, 2006 1:30 PM
This "Catalano" guy only can do it if he has owners support. I don't think any owner would want to do this if they know it may jeopardize the value of their home. How shady.
Posted by: How Shady at September 21, 2006 1:44 PM
That's what you get with spec real estate. Regardless of how well off I was or how well the real estate market was doing, I would never spend that much money on property that wasn't built and I hadn't been in.
Posted by: Dude at September 21, 2006 2:08 PM
If I ever get to move into my 600sq/ft (evidently, give or take a few feet, but really who's counting? oh wait, Catalano is!) mouse hole at One Rincon, I'm gonna give building security a picture of this [guy] so they can keep [him] out.
Let's all play a game: Guess which building [Removed by Editor] Catalano will infest next! (and you know he will...)
Posted by: 49Giants at September 21, 2006 3:13 PM
Thank you "49Giants" Can we get socketsite to post his picture?
[Editor's Note: Uh, no.]
Posted by: Post a Pic at September 21, 2006 3:22 PM
(Sarcasm) Yeah, that guy is a real bad character. Actually making deveopers and other sellers accurately represent the square footage is a real harm to society. He should be tarred and feathered so that anyone selling property can just make up actually anything they feel like and sell a place with no recourse. What a jerk!
Posted by: tipster at September 21, 2006 3:30 PM
While tipster has a point (although I am not telepathic and do know what is really going on inside of Mr. Catalano's head - crusader for the little guy or opportunist), isn't it up to the prospective buyer to take some level of responsibility as well, for example, as mentioned in this thread by RinconFan?
Posted by: Anonymous at September 21, 2006 4:02 PM
I absolutely agree with you. It's unfortunate that people refuse to take responsibility for their buying decisions. Everyone has an appraisal done on their unit prior to close, do they not look at the appraisers sq. footage notes? Not only that, but in buildings like The Beacon, buyers all saw their units before actually purchasing them, had every opportunity to measure, and if they didn't, then why place the blame on other people? I think all of this nonsense is simply the knee jerk reaction to a slow market where people previously over extended themselves and now are blaming everyone else but themselves for their troubles.
Posted by: Anonymous at September 21, 2006 4:07 PM
I don't hate attorneys. HAHAHA. No, really, I don't. Often attorneys are the guys in the trenches actually fighting the good fight on behalf of the people. But, we all have noses, and I think we all smell a rat. (Socketsite, please don't edit out "rat". It's a good word!).
Now, if these scummy developers sold me a condo without, say, running water, Catalano would be my man. And you know what, I've never been in the Beacon, but if what they're saying about the oven-like conditions in the units is true, there may be a genuine Implied Warranty of Habitability issue there. But if we're just talking about a few sq/ft, big deal. Trust me, no one is walking into thier 1500 sq/ft condo only to find that it's half of what they expected. And we all know--very single one of us--the square footages are approximate. How do we know? Cuz it says so!
If Catalano really cares about housing issues, tell him to get out of SOMA and check out Chinatown. THOSE places have sq/ft issues.
Posted by: 49Giants at September 21, 2006 5:18 PM
where are all the democrats in SF??
Posted by: Anonymous at September 21, 2006 5:21 PM
so misrepresentation or shall we say deception is ok by the developer because the buyer is supposed to bring a measuring tape and verify the exact square footage?
why dont we have passengers run their own safety checks on 747's before they take off too.
Posted by: Anonymous at September 21, 2006 5:22 PM
Can anyone confirm that the 'legal' or 'official' way to measure a condo is from one end of an interior wall to the other end?
Is that how appraisers do it?
When my condo closes on Rincon Hill, I'll definitely bring my tape measure(and inspector) and measure the whole place during the final walk-thru. I just wonder, if the SqFt doesn't measure up, what can I do? I mean, backing out would mean losing 3%!! What recourse do us buyers have??
Posted by: RinconFan at September 21, 2006 5:49 PM
How is "approximate" misrepresentation?
Posted by: Anonymous at September 21, 2006 5:50 PM
do their 'approximates' ever UNDERestimate the square footage?
Posted by: Anonymous at September 21, 2006 6:09 PM
How is "approximate" misreprensation? give me a break, the developer does have a responsibility to the buyers, but buyers need to read disclosures and exercise reasonable care, "your mother doesn't live here", time for buyers to take some responsibility for themselves.
Posted by: anonymous at September 21, 2006 9:37 PM
This is all a bunch of BS. When you buy a unit you should be reviewing disclosures. Part of the recorded CC&R's is a condo plan performed by a licensed California surveyor. If you're too ignorant to look at the document that actually subdivides your condo (with sq. footage) then you and your money deserve to be parted. I don't even understand how this attorney has any basis for a suit at all.
Posted by: developer at September 21, 2006 10:07 PM
Anyone who thinks Catalano is in it for altruistic reasons is gravely mistaken. He doesn't care about square feet or any of the issues, he smells an opportunity to add to his bottom line, period. He is the epitome of what gives good attorneys a bad name.
Posted by: Anonymouse at September 21, 2006 10:10 PM
Yes, I agree with you directly above, this attorney is a bag of ...., regarding this sq. footage issue, all of the developers in the buildings that are being sued should counter sue this jerk
Posted by: Anonymous at September 21, 2006 10:17 PM
Its too bad that a developer of such projects (any developer) will not step forward and explain/defend their positions on topics such as these. The forum is here for the taking. To at least have them air their side of the story would be (I think) a small step in the right direction. My guess is that their legal representation is advising against such public statements. Its such a pity.
Posted by: Anonymous at September 21, 2006 10:26 PM
of COURSE the lawyer is in it for his bottom line. Just like the rest of us. That's what lawyers do for a living. If there was no incentive to correct a wrong, the wrong would never be corrected.
That said, if there are devlopers running around misleading the public so that they can get a higher price, then those people need to be stopped. It's too expensive to have an owner sue the developer. So enter the class action lawyer. That's the whole reason behind the laws that allow such lawsuits. To prevent people from wronging others in a nickel and dime manner so that no one person can afford to stop the bad behavior.
If the developer's approximate sizes are all under, then that needs to be stopped. It isn't helping the industry when people selling residences get to lie a little here and there and get away with it. That's just the law. In some transactions, the buyer and seller are on relatively equal footing. So we let each man fend for himself. In other cases, one party is far more sophisticated and experienced than the other and we hold that party to a higher standard. He has the far cheaper means to determine square footage than each individual person, so he can determine it and build the cost of doing so into the price. Everyone wins economically: it's far cheaper for the devloper to be accurate than to have every individual hiring someone to do the measurements. It just isn't that hard for a developer to do.
If the devloper's sizes were close, and not misleading, then the lawer will have spent a lot of time and money fighting for nothing. Most lawyers won't do that. And he can get sued back for the developer's attorneys fees if the suit was frivolous. Lawyers can and do get disbarred for filing multiple frivolous lawsuits just looking for settlements. So if that's his game, he won't last very long at it. You're all objecting to a non issue. Be accurate and you'll have nothing to fear and the public, and the real estate industry, will be better served.
Posted by: tipster at September 21, 2006 10:37 PM
To "developer," can I assume that the assessment of square footage of a unit by "a licensed California surveyor" will match what is publicly promoted as the square footage of the unit? Is it safe to assume that the developer will make sure that the numbers match?
Your post seems to say that assessments by surveyors may not match what is recorded/promoted by developers. That, to me, sounds like a major legal problem for developers. Why would developers be so dumb to do such a thing?
Posted by: Anonymous at September 21, 2006 10:44 PM
Good point, but my point is buyer's are not buying an approximate unit size, they are buying a specifc unit, subdivided by a recorded document that they should be looking at before the plunk down their money.
Approxiations are for marketing purposes. Should developer's not approximate because guys like Catalano are lurking around? How much deviation is too much, 5%? When you come into my project, should I not tell you the square footage of the units? Actually, maybe that's the answer, just provide the condo plan during marketing so there's no confusion.
Posted by: developer at September 22, 2006 9:07 AM
In the resale market, a lot of times, there's no square footage given. It's not a new realisation that those numbers are problematic. What's new (I think) is that more people have been trying to use the price per square foot to have a sense of value. But is it really that useful? I'm just asking. I mean, if it's determined that all the condos at The Watermark or the Met are, say, 100 square feet smaller -- is everyone on the resale market going to reduce the price of their condos by $100,000? Or do we simply say that the quality of the view and the demand for the neighborhood is so high, that the price per square foot is now $1,100 or $1,200 instead of $900 or $1,000?
Posted by: Damion at September 22, 2006 10:05 AM
Enraged, I am an owner at the Watermark too and am I going to fight for this lawsuit because I want to make sure this never happens again.
Posted by: Natasha at September 22, 2006 10:07 AM
Aren’t comparable sales (comps) and appraisals based on $/sqft? When I sold my place the agent provided me with a “CMA” to rationalize the price, and now I’m getting a list of comps for any of the places I’m looking to purchase. Both are based on $/sqft.
Posted by: What About Comps? at September 22, 2006 10:30 AM
Here's a link for those who want to know how a condo is measured.
Posted by: 49Giants at September 22, 2006 11:20 AM
Yes, the appraisal of real estate is based on a $/sq ft basis, but the thing is, IF the common practice in the industry is to measure the exterior structure of a unit as opposed to the interior, then all the per square foot value of the comparables would be equally deflated as the value of the property you are trying to value. Therefore, even though the unit that you bought might be smaller than what you thought, there is no basis for damages.
To illustrate this point, let's say the unit you bought was represented to you as 1000 sq ft, and you thought the comparables indicated a value of $100/sq ft, therefore, you thought you should have paid $100,000 for it. Then, you later found out that the unit was actually 900 sq ft, you run and tell your lawyer that, "hey, they cheated me 100 sq ft, and they should owe me $100 x 100 sq ft = $10,000." But where did you get this $100/sq ft value? You got it from looking at the comps with inflated square footages. Say, your comps were also 1000 sq foot units (but were actually 900 sq ft) selling for $100,000; and if you were to extrapolate a square foot value using the true square footage, then the value of the comps would have indicated a value of $100,000/900 sq ft = $111.11/sq ft. Ok, now that you found out your unit is only 900 sq feet, BUT, the true value of your unit based on the true unit value of the comps should be $111.11/sq ft. So even though you have only 900 sq feet, the value remains the same ($111.11 x 900 sq ft). So, how are you damaged?
Posted by: Anonymous at September 22, 2006 11:41 AM
In addition to my remarks on value analysis, I might as well add my two cents on the "construction defects" in condo buildings. I believe practically all multi-unit developments at one point or another go through this baptismal ritual called "construction defects litigation". No building is perfectly built, and there will be problems. Although unpleasant as it might be as it impacts property value temporarily, it is ultimately an important and necessary event as this process essentially gives the development a thorough health examination and identifies problems that need to be addressed. At the end of the day, the building will be healthier and more value will be added to it. This is just part of the growing pains.
Posted by: Anonymous at September 22, 2006 12:06 PM
I agree with anonymous in terms of how this effects the value if everyone's unit in ONE building. But if The Watermark sizes get scaled down but The Brannan's numbers stay the same, then what's going to happen is the price per square foot is going to be much much higher at The Watermark than at The Brannan in order to stay within a comparable price point.
So if you're an owner at The Watermark I don't think your property value will automatically plummet -- but what will happen is the price per square foot will go up, which (incomparing it to other buildings) will make it seem overpriced.
Posted by: Damion at September 22, 2006 1:33 PM
I hate to ask, but do I now need to carry a tape measure and calculator when viewing property, and ask the selling agent to step out for a few minutes while I'm viewing a property so that I can scurry about and measure and calculate square footage?
Posted by: Anonymous at September 22, 2006 1:45 PM
Damion, that's why I said "IF the common practice in the industry" is to measure all the buildings the same way. This would mean that, in your example, the Brannan would be measured the same way as the Watermark.
I find it hard to believe that for big commercial developments like the Beacon, Met and Watermark, they would not following the same common practice in the industry in measuring these units. Therefore, I really don't see how these plaintiffs can recover any damages.
Posted by: Anonymous at September 22, 2006 2:26 PM
when people buy pre-construction condos, they should have at least seen the floor plan of the unit they plan to buy. i've looked at some floor plans and they dont even label the room dimensions (interior now). if they were there, it would make measuring and verifying very easy. but it looks like they deliberately leave off the dimensions and instead just give the sq footage, which now is supposedly only an approximate. the construction plans from the architect and the builders need precise interior dimensions down to a fraction of an inch, so since the dimensions are readily available why would the developer leave them off the advertised floor plans.
Posted by: Anonymous at September 22, 2006 2:43 PM
Well, speaking as an architect all I can say is that the square footage measurement of a condo, office space or any other portion of a building is a can of worms.
Measuring a whole building is relatively easy. Most zoning codes require that you measure from outside face of finish (though some go stud to stud).
Measuring the inside, well do you go from face of stud, finish face of wall or (how most novices measure) from base board to baseboard. Seems trivial but the differences add up to much more than you might imagine.
Then, how do you account for the walls that separate units? Or separate the unit from a public hallway? Do you measure from the center or from the inside face of stud or the face of finish? What do you do about columns, and chases that are completely within a unit? There are lots of these? Are they part of the square footage or not?
The commercial real estate market has long used a measuring system for leased commercial space (where the rent really and truly is dependant on the square footage) called BOMA (Building Owners and Managers Association) net rentable. It's a standard that has been worked on and worked on and worked on but it still doesn't really work and leads to huge squabbles. So usually a commercial lease will include a clause that says that the lessor and lessee just agree that the BOMA area is x square feet and leave it at that.
A big problem with the BOMA standard is that it takes a long time to compute. For example, where there is a window the measurement goes to the inside face of glass (i.e. includes the space of the sill) which means there are a lot of ins and outs. Still, it's the only standard the industry has so perhaps we should give it a try.
Posted by: Susapix at September 22, 2006 8:54 PM
Re measurements by appraisers: These are done very quickly and for the most part are also approximations. They will often be substantially less than the square footage figures required for getting a building permit. And believe me, when it comes to getting a building permit no one inflates their square footages!
Posted by: susapix at September 22, 2006 9:03 PM
"Measuring the inside, well do you go from face of stud, finish face of wall or (how most novices measure) from base board to baseboard."
Novices? From baseboard to baseboard seems like the most logical way to measure the number of useable square feet. I'm sure that seems like a joke to you, but if I want to know how much usable square feet there are, this would be how I'd measure it.
Posted by: Anonymous at September 23, 2006 12:14 AM
So what would happen if a developer hired a licensed appraiser to measure all "finished" units in a new buildng? And then advertise the fact that "the square footage of the units in this brand spanking new building has been officially measured by the [COMPANY NAME HERE] company, and we'll show you the records of their efforts any time you want."
Seems to make sense. On the surface, it sounds like at least the developer is trying to be as open as possible. I guess since something like this has not happened they haven't thought about this angle (which I find hard to believe since I'm no marketing genius) or there's some legal ramifications...
Posted by: Anonymous at September 23, 2006 7:55 AM
Baseboard to baseboard doesn't work because it doesn't include window seats, kitchen appliances, kitchen islands etc. Catalano hires a floor company to come in and measure, giving him the smallest measurement possible (ie floor space). Developers and architects use the largest measurement possible (ie the area inside the common walls) which would include interior wall space.
Let me pose this question:
if a unit has a window sill setback that is 3' off the ground and is 2' deep (leaving a hieght of 5' of open space above the sill setback) where people put books, televisions or decorative pillows, is that counted as square footage?
Developers say yes, Catalanos floor guy says no because you can't step on it. If 4 rooms have that condition, you can be talking about 60 - 100 square feet of space.
No one should think that a class-action lawer really cares about the "legal way" to measure: there isn't one for residential. He only cares about a credible way to measure as little space as possible. This riles up the masses and gives him a better shot at trying to get some cash out of a developer to go away.
Posted by: Anonymous at September 23, 2006 8:55 AM
If Mr. Catalano has hired "independent" companies to measure square footage, has anyone ever asked to review that information, as well as the company?
Posted by: Anonymous at September 23, 2006 10:05 AM