Florida Holding 4800, LLC (FH 4800) stands tall in a legal dispute against Property Consulting Group, Inc. (PCG). This lawsuit is centered around a claim for damages exceeding $15,000. FH 4800 is a corporation conscientiously organized under the laws of the State of Florida. It holds its principal business in Broward County, Florida, maintaining a dignified corporate entity. The defendant, PCG, shares similar corporate attributes, albeit the focus of the lawsuit.
Read the Summons and Complaints
The core of this case lies in the inspection of a commercial real estate property located at 4200 NW 16th Street, Lauderhill, Florida, henceforth referred to as the “Property.” In April 2013, the plaintiff considered purchasing the Property and subsequently employed PCG to perform a Property Condition Assessment and Phase 1 Environmental Site Assessment, also referred to as the “Inspection.”
A contract, attached herein as Exhibit A, was drafted stipulating the scope of work to be carried out by PCG (the “Proposed Scope”). The Proposed Scope involved determining the “efficiency of the Structural, Mechanical, and Electrical systems” and generating a report to address the sufficiency and estimated remaining life of these components. This report was intended to be used for due diligence purposes during the inspection period.
FH 4800 paid $4,000 to PCG for the execution of this Inspection, which took place on April 12, 2013. By April 23, 2013, PCG issued a report of their findings (the “Report”), attached hereto as Exhibit B. This Report claimed to be “based upon careful evaluation of the observed conditions” and was designed to guide FH 4800 in deciding whether to purchase the Property.
The Report contained a detailed evaluation of the Property, stating that it was based on observations made during the property “walk-through.” Various elements of the Property, including the substructure, superstructure, facade, and roofing were thoroughly evaluated. The Report claimed that “no significant structural problems with the building were noted” and that the “construction techniques and materials appear to be properly installed and adequate for the current and anticipated near-term use of the building.”
Moreover, the Report stated that “the roof is approximately twenty (20) years old and appeared to be in good overall condition with no signs of active leaks noted.” It predicted that the roof would have an estimated remaining useful life of approximately 5-10 years with continued proper maintenance. The Report went on to provide specific assurances that no substantive costs would be required for the roof for another 7 years.
With respect to the other areas of the Property, such as plumbing, heating, ventilation and air-conditioning, electrical, and elevators/escalators, the Report stated that these systems were in good condition. Specifically, the HVAC equipment, which ranged from 3-7 years old, was noted to be in good condition and expected to have a significant amount of remaining useful life.
Based on these representations and findings presented in the Report, FH 4800 purchased the Property in June 2013. However, the reality that unfolded was far from what was represented in the Report. FH 4800 soon started receiving reports from tenants about leaks associated with the roof and cooling problems with the HVAC system.
By March 2014, it was discovered that the true condition of the roof was not as indicated in the Report. A roofing contractor reported that the entire roof was in poor condition, did not have any additional useful life, and required a complete replacement. Moreover, the HVAC system was also reported to be in poor condition and required replacement. The issues associated with the roof and the HVAC system led to mold growth within the building, which in turn caused several tenants to vacate the Property.
Based on these events, FH 4800 has retained the law firm of Murdoch, Weires & Neuman to protect its rights. The claims against PCG include breach of contract and negligence in failing to discover the true condition of the roof. These are detailed in the counts I and II, respectively.
The Plaintiff, having purchased a property with multiple undisclosed structural issues, has lodged a lawsuit against PCG (the Defendant), alleging a breach of contract, negligence, and intentional misrepresentation during their conducted property inspection. The Plaintiff asserts that PCG failed to discover and report crucial defects in the property’s roof and HVAC system, thus causing them significant financial harm and loss of income.
As outlined in Count II, the Plaintiff alleges negligence against PCG. They claim that if the inspection was conducted as per the contract’s obligations, then it was performed negligently. PCG was expected to exercise reasonable care and diligence in performing the inspection, in line with the industry standards, which it allegedly failed to do. The Plaintiff contends that a property’s HVAC system is one of the essential components that a professional inspector should evaluate thoroughly. PCG represented itself as a qualified inspector of such items but failed in its duty of care.
The Plaintiff claims that PCG did not adequately inspect the chillers and HVAC system and failed to inquire about their repair and maintenance history. PCG also neglected to investigate any signs of improper operation or leaks in the system. The Plaintiff insists that all of their losses were a direct consequence of the Defendant’s negligence and recklessness.
In Count III, the Plaintiff brings forth an accusation of intentional misrepresentation or fraud against PCG. The Plaintiff argues that PCG intentionally created ambiguity within its report with the phrase “if readily available” or “if provided”. This language, the Plaintiff claims, was intentionally designed to confuse them about the extent and thoroughness of the work performed and to create an illusion of a comprehensive inspection. This language was misleading and led the Plaintiff to believe that substantial efforts were made to evaluate the property properly.
For example, PCG claimed that it conducted substantial document reviews and thorough interviews, “if readily available”. The Defendant asserted it would review documents, including occupancy certificates, inspection records, and warranty information, among others. They also claimed they would conduct interviews with property managers or owners’ agents, but the Plaintiff alleges that these claims were false or misleading.
The Plaintiff accuses PCG of intentionally creating a lack of clarity in its report about what documents were reviewed, and who was interviewed, causing the Plaintiff to believe there was a solid foundation for the inspection’s findings. If these representations were true, they would have revealed the property’s true condition. The Plaintiff argues that PCG’s use of ambiguous language intended to confuse them, and indeed, it did.
According to the Plaintiff, they now understand that little, if any, information about the prior repair and maintenance history of the roof and HVAC system was reviewed, and few, if any, meaningful interviews were conducted. They believe they were led to purchase the property based on an inaccurate and intentionally deceptive report.
The Plaintiff demands judgment for damages against the Defendant for their failure to discover the roof and HVAC conditions and for their alleged intentional misrepresentation. They seek an amount in excess of the minimal jurisdictional limits of the court, to be determined at trial, and they also request attorney’s fees, interest, the costs of bringing this action, and any further relief that is just and proper.
This case underscores the vital importance of professional responsibility and transparency in property inspections, particularly given the significant financial implications for buyers. The Plaintiff alleges significant missteps by PCG in their professional duties, casting a spotlight on the need for stringent oversight and due diligence in the property inspection industry.