Property Markets Group sued the condo association at the Elser Hotel & Residences, marking the latest dispute between them over control of the downtown Miami condo-hotel.
Last week, an affiliate of Miami-based PMG sued 398 NE 5th Street Condominium Association, the property management firm RealManage and Steve Hardee, alleging the association has been running a fraudulent scheme to take unit owners’ fees that are owed to PMG.
PMG’s complaint was filed just days after the condo association sued the developer over the parking garage operations at the mixed-use tower, and months after the developer and the association settled a lawsuit.
PMG, led by Kevin Maloney, Ryan Shear and Dan Kaplan, completed the 49-story high-rise at 398 Northeast Fifth Street in 2022. The short-term rental friendly condo building has 646 units and was originally planned as rentals. It also includes a garage, office space and a church.
PMG claims the association has seized total control of the funds, leaving the developer unable to cover operating costs for the property’s commercial spaces. The lawsuit accuses Hardee, the board president, of instructing Highgate Hotels to not release roughly $773,000 in hotel management fees to the developer without written approval from the association.
The association and RealManage allegedly refused to invoice unit owners the correct amount of about $350,000 per quarter, instead billing the 2025 rate, according to the complaint. Through RealManage, the association has continued to send “confusing, deficient, and incomplete records” and “has never sent records showing what RealManage has actually collected” from each unit owner, the lawsuit alleges.
Attorneys for the condo association, RealManage and Hardee did not immediately respond to requests for comment.
The PMG affiliate notified the association on June 5 that it would be exercising its rights to collect assessments directly from the unit owners, which it states it is able to do under the condo declarations and the settlement.
On July 3, the condo association told unit owners to ignore a notice from Black Briar Management, PMG’s property management firm, directing owners to use its payment portal.
On July 24, the condo association sued the PMG affiliate, alleging breach of contract.
The association alleges that as part of the November 2025 settlement agreement, the developer received the right to all revenues generated by the parking garage, and that the developer agreed to install a license plate recognition system at its own expense and agreed to submit any parking operator to the association for approval. By hiring Metropolis to install the license plate recognition system, the PMG affiliate breached its agreement with the association, the condo association alleges.
The PMG affiliate, referred to as the commercial property owner, or CPO, in the lawsuit, has held onto all the garage revenues since the settlement agreement, while the unit owners bore the garage’s full operating costs, according to the condo association’s lawsuit.
The complaint takes issue with the settlement agreement, which grants PMG the garage revenues “while remaining silent as to any modification of the pre-existing expense allocation, creating an ambiguity” that requires the court to weigh in.
The developer’s attorney, Josh Rubens of the law firm Kluger Kaplan, said in a statement that the PMG affiliate “strongly disputes the claims” brought by the condo association regarding the parking operator.
PMG said it “looks forward to pursuing its claims” for conversion and fraud of the commercial parcel’s dues, and theft of the hotel management revenues, Reubens wrote.
The PMG affiliate sued the association on July 31, a week after the condo association filed its lawsuit over the garage. Two days later, the PMG affiliate filed a second lawsuit to get back storage space in the garage that it had leased to the association. The second suit alleges that the association requested to lease a 6,870-square-foot storage unit at the top level of the garage for $5,000 a month beginning in February. But the association didn’t sign the agreement or pay fees for the months since then, and owes $35,000, according to the complaint.
The condo association first sued the developer in early 2025 over the language in the amended condo declaration related to voting rights and leasing and rental restrictions. That lawsuit was dismissed with prejudice, meaning the association cannot refile it. That complaint resulted in a settlement agreement between the developer and association.
The delicate balance of power between unit owners and developers (or the owners of the commercial spaces) has sparked bitter disputes across a number of South Florida condo-hotels. Last year, the Florida legislature codified commercial lot owners’ greater power in state law, but this year approved legislation that partially clawed back those changes by scrapping its applicability to existing condo-hotels.
The Elser is next to the sales center for the planned Delano Residences Miami supertall and a block away from the Waldorf Astoria Hotel & Residences Miami, also a supertall, which is under construction. PMG is developing both projects.
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