Law Offices of Eric L.
Bronfeld, P.A.
PO Box 22506 Fort
Lauderdale, Florida 33335
954-527-1512(South Florida Area)
1-877-527-1512 (Toll Free outside South Florida)
info@depositrecoveryservices.comhttp://www.depositrecoveryservices.com/The Real Estate Attorneys at
Deposit Recovery Services concentrate and are experienced in New and
Preconstruction Law and are working hard to achieve productive relationships between Purchasers and Developers. Attorneys from
Deposit Recovery Services have been successful resolving Contract Disputes between our clients and well funded Real Estate Development companies like those mentioned in a recent
New York Times article.
Following are excerpts from a recent article regarding some
Florida Condominium cases. The article is from the
Daily Business Review , January 17, 2008 edition and was written by
Polyana da Costa .
"Is there a way out? That's a question many buyers under contract to purchase condominium units in
South Florida asked their
attorneys as closing time approached."
"In an overwhelming number of cases,
attorneys said yes to their clients and filed suits against the
developers, but now the question is — will that work? "
"Few
court orders — that might serve as
precedent to other cases after the
appeal process — have come out since a wave of
lawsuits alleging breach of
contract for many different reasons were filed.Out of three recent judgments in
Florida, one favored the developer and two others favored the
buyers:"
"•
D&T Properties v. Marina Grande Associates Ltd. — Palm Beach Circuit Judge Jonathan Gerber issued a final judgment after a
nonjury trial in July stating the buyer was not entitled to cancel the contract based on an increase in condo assessments because the buyer could afford the increases. The case is being appealed in the
4th District Court of Appeal."
"•
Pugliese v. Pukka Development — U.S. Magistrate Judge Frank Lynch Jr. issued a summary judgment in October that found the buyer was entitled to be refunded the deposit because the project was not exempt from the
federal Interstate Land Sales Full Disclosure Act. "
"•
Meridian Ventures LLC v. One North Ocean LLC — U.S. District Court Judge Daniel T.K. Hurley in December issued a
summary judgment favoring the buyer in a similar case. Projects with fewer than 100 units were believed to be exempt from the
federal act. The federal court found the two projects were exempt from some but not all provisions in the act. "
"The two cases favoring buyers also are being appealed and have raised concerns among some attorneys and developers."
An attorney who represents
developers, wrote on a
Web site in October "that the Pukka case was significant and was being aggressively appealed."
"If the Pukka order is upheld by the federal appeals court, it likely will have a significant impact on the ability to enforce contracts presently utilizing the One Hundred Lot exemption," said the attorney. The
developer attorney went on to explain in an interview "Pukka decision was contrary to existing Florida case law and the opinion of the director of the
Department of Housing and Urban Development." The attorney's
law firm has won many summary judgment hearings and motions on behalf of developers.
According to the article from the
Daily Business Review , January 17, 2008 edition, "Although the cases being decided will help shape future decisions, it's too early to tell the outcome of hundreds of other lawsuits."
The
Daily Business Review continued on to explain that according to a partner with a
Miami law firm. "Most likely,
buyers will have a difficult time trying to win
condo cases." The
law partner explained, "Most
contracts are very one-sided
contracts, They were written for
developers and are there to protect developers. While some buildings may have special circumstances, in general it is very difficult to litigate this issue." The partner has "received several phone calls from
buyers wanting out of their contracts, but in most instances he does not take the case" The partner explained, "I don't want to take a case and make them pay if I know they won't win," A
Fort Lauderdale attorney, agreed and said "there is room for negotiation with developers." according to the
Daily Business Review , January 17, 2008 edition, "Rather than taking the cases to
court, [the
Fort Lauderdale attorney] has recently helped some buyers work out
settlement agreements with developers. The
agreements can't be disclosed, but [the
Fort Lauderdale attorney] said they involved buyers accepting
refunds less than the
full deposit or
developers agreeing to give the
buyer a
discount on the
unit." According to the [
Fort Lauderdale attorney], "It's a case-by-case basis, but I advised them to
settle based on my review of the
complaint, an estimation of what it would cost to
litigate and the amount of the deposit."
The article from the
Daily Business Review , January 17, 2008 edition by
Polyana da Costa explained, "
Lenders also have gotten in the way of
developers and
buyers who want to settle." An
Aventura attorney who has filed dozens of lawsuits on a contingency basis for
condo contract holders against
developers explained, "I have talked to a major
developer who wants to go to
mediation, and the
contract requires mediation before a
suit is filed, but the [
Aventura attorney] said he can't
negotiate because of the
lender," "
Lenders have assignment rights to contracts as they have rights to the real estate," the [
Aventura attorney] said. "They can't do anything without the
lenders' approval, and from what I've heard the
lenders are not giving them the cooperation they need to deal with this market,"
The [
Aventura attorney] appears to be optimistic about condo lawsuit outcomes, the [
Aventura attorney]
explained, "Developers' contracts are indeed written in language that favors the developer, but in many cases "developers overreached in trying to protect themselves so much that they created unenforceable contracts." the [
Aventura attorney] "calls them illusory contracts, meaning the developer used overreaching language and put in a provision that said they could change anything they wanted including square footage, finishes, colors, anything," The
Daily Business Review , January 17, 2008 written by
Polyana da Costa claims, "Leading luxury condo builder
Related Group used a contract like that in most if not all of its
South Florida developments." Based on the [
Aventura attorney's] review of dozens of local contracts, the [
Aventura attorney]said "other developers have used the same contract in their developments."
The
Daily Business Review article went on to explain, "other
attorneys who did not want to be identified said some projects are known to have "bad"
contracts and "good"
contracts. The "good"
contracts, in the eyes of
attorneys, were well-written to protect the
developer without overreaching and make it difficult for a
buyer to get out. Among them are the
Edgewater, a 307-unit development in
West Palm Beach;
Vintage at Lighthouse Point, a townhouse community by
WCI Communities;
Orchid Grove, a
development in
Pompano Beach by
Tarragon; and the
Paradiso condo in
Miami Beach."
The
Daily Business Review article stated:
"
Attorneys say they are being selective despite the large number of
lawsuits being filed."
"Among the most common claims used in contract cancellation lawsuits are:
•
Material and adverse changes — buyers can cancel contracts when "material and adverse changes" were made to condo documents filed with the state. It's up to the courts to decide whether a change was "adverse."
Lawsuits claim changes that vary from square footage to
condo association fee increases. In the
Marina Grande ruling, the judge found the change was not adverse to the buyer because the buyer could afford to pay.
•
Interstate Land Sales Act — A 1968
federal law to protect land buyers. The law has been applied to condos and has several provisions including fraud related to misrepresentations in the contract, a requirement to give the
buyer 20 days written notice in case the buyer is in default and a requirement to file certain property documents before construction.
Developers are exempt from the act under certain circumstances, including a commitment to deliver a unit within two years. "
The excerpts from this article are from the
Daily Business Review , January 17, 2008 edition and was written by
Polyana da Costa.
The Real Estate Attorneys at
Deposit Recovery Services concentrate and are experienced in New and
Preconstruction Law and are working hard to achieve productive relationships between Purchasers and Developers. Attorneys from
Deposit Recovery Services have been successful resolving Contract Disputes between our clients and well funded Real Estate Development companies like those mentioned in a recent
New York Times article.
Law Offices of Eric L.
Bronfeld, P.A.
PO Box 22506
Fort
Lauderdale, Florida 33335
954-527-1512(South Florida Area)
1-877-527-1512 (Toll Free outside South Florida)
info@depositrecoveryservices.comhttp://www.depositrecoveryservices.com/DISCLAIMER: This website and its contents do not constitute legal advice and are not intended to create any type of attorney-client relationship. This blog is for informational purposes only. Online readers should not act upon this information without seeking professional counsel. Do not send us confidential information until you speak with one of our attorneys and get authorization to send that information to us. Thank you.
Labels: deposit recovery, florida condominium attorney, litigation, miami, miami condo contract, real estate developer lawsuit
