Judge rejects lawsuit alleging condo buyers were misled

A class-action lawsuit brought by some condominium owners against the developers of the Murano building at 21st and Market Streets has been dismissed by a Common Pleas Court judge.

The suit, filed in August by 51 early buyers of units at the 43-story Murano, accused the developer, Los Angeles-based Thomas Properties, as well as real estate agents and others, of misstating the levels of sales between 2005 and August 2009, after 40 more condos were sold at auction.

Common Pleas Judge Allan Tereshko dismissed the suit Friday "with prejudice," according to court documents filed this week, meaning that the suit cannot be refiled.

Andrew Chirls, the condo owners' attorney, said Tuesday that no decision had been made about an appeal.

Reasons for dismissal of the condo owners' suit, which was amended after preliminary objections were filed, included:

Misjoinder of the causes of action, meaning that parties or legal claims were included in a single lawsuit contrary to statute.

The parol-evidence rule, which permits the judge or jury in a contract dispute to look only at the written contract and not at any previous discussions or agreements between the parties.

The economic-loss doctrine. Rulings in many states have barred a buyer's claims for intentional misrepresentation in connection with a residential real estate purchase.

In the suit, the 51 early buyers had accused the developer and its agents of conveying false impressions about sales at the 302-unit high-rise.

In a condominium building, the value of the units depends partly on total sales. Sales numbers also determine bankers' willingness to lend money to would-be buyers.

In June 2009, when Thomas Properties hired Accelerated Marketing of Boston to auction 40 Murano units, the developer had sold 112 and had 12 under agreement.

Since the building opened in mid-2008, just as the real estate downturn was taking hold, 178 units had not sold. The auction was designed to accelerate sales in a Center City market then swimming in about 2,000 still-available new condos.

The 40 auctioned units were sold at prices more in line with the realities of the current market, which has experienced a 7 percent decline in single-family-home values since the housing boom ended in August 2007.

A comparison of per-square-foot prices for Murano units that closed in mid-2010 with those that closed in 2008 shows reductions of about $100 per square foot in some cases.

On Tuesday, the city Office of Property Assessment's website showed that 221 of the building's 302 units had gone to settlement.

According to recent advertising, prices at the Murano range from $449,000 for a one-bedroom unit to about $1.7 million for a three-bedroom condo.