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Florida Real Estate Case Law Updates

Published on: May 13, 2015 | by ESQ.title

By Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

CORRECTING A FORECLOSURE JUDGMENT

The Court considered whether Florida’s Rule of Civil Procedure allowing for corrections of “clerical mistakes,” encompasses authorization to supplement a final deficiency judgment by clarifying the party defendants’ status in the litigation almost three years after the entry of the initial judgment. See Fla. R. Civ. P. 1.540(a). The District Court of Appeal held that rule governing relief from a judgment, decree, or order on the basis of a clerical mistake did not extend to allow the Circuit Court to supplement its initial deficiency judgment in order to more definitively address the litigation status of the three party defendants.

OBJECTION TO FORECLOSURE SALE NOTICES

Debtor filed objection to foreclosure sale of property. The Court held that the Debtor’s perfunctory objection to the judicial sale did not make any claims of deficiency regarding the sale’s unfairness or irregularity. As such, Lyons’s objection was legally insufficient as a matter of law and the trial court necessarily abused its discretion by setting aside the judicial sale on this basis. And while there was a hearing held on the objection, the trial court did not make any findings in its order or state its reasoning for setting aside the sale. Similarly, there is nothing contained in the record to indicate that the sale suffered any deficiency or irregularity requiring it to be set aside. Without such a basis, the trial court abused its discretion when it set aside the sale.

What Is a Reasonable Amount of Time To Be Bound by a Florida Non-Compete Agreement?

Published on: March 31, 2015 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

In determining the reasonableness in time of a postterm restrictive covenant (a.k.a. a non compete agreement) not predicated upon the protection of trade secrets, a court must apply the following rebuttable presumptions:

In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of: (1) the assets of a business or professional practice; (2) the shares of a corporation; (3) a partnership interest; (4) a limited liability company membership; or (5) an equity interest, of any other type, in a business or professional practice, a court must presume reasonable in time any restraint six months or less in duration and must presume unreasonable in time any restraint more than two years in duration

What are the Risks of Purchasing a Tax Deed in Florida?

Published on: January 21, 2015 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

It’s important to know that when you purchase a tax deed in Florida, that the title to the property is not immediately insurable and is not considered legally marketable. In fact, if a tax deed has been of record for fewer than 20 years, subsequent purchasers, lenders, and title insurers will not consider the title marketable and will require the tax deed holder to obtain a judgment quieting title in the holder before relying on the tax title. Thus, tax deed properties that are acquired without further legal action are essentially worthless unless you plan to rent or live in the property for the next twenty years before selling it.

Quiet Title Actions

Tax deed purchasers who don’t wish to wait 20 years to sell their newly acquired property must file a quiet title action to obtain marketable, insurable title. The purpose of a quiet title action is to forever bar prior owners, mortgage and lien holders from asserting any interest in the real property.

Because a quiet title action stops redemption periods and eliminates potential claims of lien, once the quiet title action is complete and the 30-day appeal period expires, you’ll be able to sell the property, offer marketable, insurable title to a prospective purchaser or obtain title insurance for yourself. In short, a successful quiet title action will allow a title insurance company to write a policy insuring title to the property.

Crafting an Enforceable Noncompete Agreement

Published on: October 28, 2014 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Courts have traditionally viewed noncompete agreements with disfavor, believing that the agreements contravene public policy. The agreements were seen as unfair restraints on trade and in response, the common law prohibited the use of such agreements. In time, the restrictions on such agreements lessened. Nevertheless, the common law has generally restricted their use for any purpose other than for legitimate business purposes. To ensure the purpose is legitimate, the law requires that a valid noncompete agreement meet a reasonableness requirement.

The reasonableness requirement is designed to balance the interests of all entities affected by the noncompete agreement: the employer, the employee, and society as a whole. Each entity has an interest to be protected. The employee wishes to preserve his mobility; the employer wishes to protect itself from unfair competition; and society wishes to balance with a system that provides incentives for the development and training of employees. With such varied interests at hand, the successfully drafted noncompete agreement must be sculpted carefully as to satisfy all three parties.

Partition of Florida Real Estate

Published on: October 5, 2014 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Joint property ownership is a partnership at its core. Partnerships are great tools to save money, promote economies of scale, and better utilize resources. However, in situations where more than one party owns property, decision-making may become cumbersome, partners may not always get along, or they may have different interests which don’t reconcile with each other. Oftentimes, these problems can be resolved without court intervention, but when they cannot, partition of real estate may be the best solution. The following is a general overview of the Florida partition process.

Partition Requirements

Under F.S. 64.041, a complaint for partition must allege:

a description of the lands of which partition is demanded;

the names and places of residence of the owners, joint tenants, tenants in common, coparceners, or other persons interested in the lands;

the quantity of the interests held by each; and

any other matters as are necessary to enable the court to adjudicate the rights and interests of the parties.

Partition Sales

A partition sale is a secondary measure used only when the property cannot be divided.

Under F.S. 64.061(4), on the motion of any party, property may be sold in lieu of partition if either of the following conditions is satisfied:

There is an uncontested allegation in a pleading that the property is indivisible and not subject to partition without prejudice to the owners.

A judgment of partition is entered and the court is satisfied that allegations of indivisibility are correct.

If one of these requirements is met, the court may appoint a special magistrate or the clerk to sell the property. The sale may be either private or public.

Understanding Florida’s Commercial Real Estate Sales Commission Lien Act

Published on: March 17, 2014 | by ESQ.title

By: Dan Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Pursuant to Florida’s Commercial Real Estate Sales Commission Lien Act, a commercial broker has a lien upon the owner’s net proceeds from the sale of commercial real estate for any commission earned by the broker under a written broker’s agreement.

According to the Act, the lien upon the owner’s net proceeds for a broker’s commission is a lien upon personal property, it attaches to the owner’s net proceeds only, and it does create a lien right against the real estate that is being sold.

As such, the broker cannot record a lis pendens against the real estate that was sold in order to force the seller to pay the broker’s commission. Instead, the Act provides that a commercial broker may give both notice to the closing agent and record notice of the commission due in the public records of the county where the land is located, and gain a lien on the net proceeds of the seller

Practice Tip to Residential Brokers: Residential real estate brokers have no lien rights either statutorily or at common law. They are, in fact, prohibited from placing liens for commissions in the public records.

Are You Entitled to Receive a Real Estate Commission?

Published on: March 9, 2014 | by ESQ.title

Daniel Pascale

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

As the amount of South Florida real estate transactions continue to reach new records, real estate brokers and agents find themselves in more and more commission disagreements. As such, we thought it would be a good idea to post a new article on the doctrine of procuring cause.

The Doctrine of Procuring Cause

Procuring cause refers to a broker’s efforts to match a ready willing and able purchaser with a seller and for a sale to take place as a result of the broker’s continuous negotiation and/or involvement. Stated differently, to be the procuring cause of a sale or lease of real estate, a broker or agent must have brought the parties together and effected the sale or lease assignment as a result of continuous negotiations inaugurated by the broker. Whether a real estate broker or agent is the procuring cause of a sale must be factually determined on a case-by-case basis. Many factors can impact a determination of procuring cause, but no one factor is by itself determinative.

Is Your Real Estate Transaction Subject to FIRPTA Tax Withholding?

Published on: February 19, 2014 | by ESQ.title

By Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

What is FIRPTA?

The Foreign Investment in U.S. Real Property Tax Act of 1980 (“FIRPTA”) was enacted to ensure that foreign investors are taxed on the gains from the disposition of their U.S. real property investments. Pursuant to FIRPTA, a buyer (whether domestic or foreign) purchasing U.S. real property interests from a foreign person must withhold 10 percent of the amount realized from the sale (i.e., the entire purchase price, not just the gain). FIRPTA applies to both residential and commercial real estate transactions.

In a FIRPTA transaction, the buyer (i.e. the transferee) is considered the withholding agent and has the responsibility to determine whether the seller (i.e. the transferor) is a foreign person; otherwise, if the seller is a foreign person and the appropriate amount is not withheld, the buyer will be held liable for the tax, and any and all penalties.

The IRS defines a foreign person as a nonresident alien individual, a foreign corporation that has not made an election under section 897(i) of the Internal Revenue Code to be treated as a domestic corporation, a foreign partnership, a foreign trust, or a foreign estate.

Florida Real Estate Case Law Updates

Published on: February 10, 2014 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Estate by entirety. A deed was to an undivided 98 percent interest and H and W, husband and wife, as to an undivided two percent interest, creates an estate by the entirety in the two percent interest even though that phrase was not used in the deed. Roberts-Dude v. JP Morgan Chase Bank, N.A., 498 B.R. 348 (S.D. Fla. 2013).

Prior judgment trumps homestead rights. A valid judgment lien which attached prior to acquisition of homestead rights is superior and enforceable. LaCalle v. Hauptman, 118 So.3d 239 (Fla. 3d DCA 2013).

Retaining trade fixtures. Where a lease is ambiguous as to which party is entitled to retain trade fixtures when the lease expires, the tenant is entitled to retain the trade fixtures. H. Allen Holmes, Inc. v. Jim Molter, Inc., 38 Fla. L. Weekly D2399 (Fla. 4th DCA 2013).

What are the Benefits of a Florida Land Trust?

Published on: January 30, 2014 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Florida Statute 689.071 creates an entity known as a Florida Land Trust. A Florida Land Trust is a device by which real estate is conveyed to a trustee under an arrangement reserving for the beneficiaries the full management and control of the property. The trustee executes deeds, mortgages, or otherwise deals with the property at the written direction of the beneficiaries. The beneficiaries collect, rent, improve and operate the property without holding legal title. Two instruments create the land trust arrangement. The “deed in trust” conveys the realty to the trustee. Contemporaneously with the deed in trust, a trust agreement is executed.

As discussed in our prior post (here), although the Florida Land Trust is a relatively unknown legal entity, it can offer a wide variety of benefits. Land trusts created under Florida Statute 689.071 are useful tools for many purposes, such as:

Privacy

By operation of law, the beneficial interests in a land trust remain entirely private. Thus, as long as the Trustee is also not the beneficiary of the land trust, the beneficiary(ies) will remain anonymous absent order of a court. Moreover, land trust agreements are not recorded in the public records. Thus, the specific provisions of the trust are never disclosed to the public.