Florida Real Estate Lawyers Blog

Thinking of Investing in South Florida Real Estate? Better Start Recruiting Your Real Estate “Dream Team.”

Published on: August 25, 2013 | by ESQ.title

By: Alejandro E. Jordan, Esq.

Thinking of investing in real estate in South Florida? Recently published data by the Miami Association of Realtors and Greater Fort Lauderdale Association of Realtors confirms that real estate prices in Miami and Broward County are beginning to take off. However, while purchasing investment property can be highly rewarding, it may also result in extreme losses. The most successful investors understand this principle and surround themselves with the right professionals from the beginning to mitigate the inherent risk.

It is no secret that successful real estate investors don’t do it all on their own. That task would be impossible considering that the best real estate portfolios typically contain a mixture of residential, commercial, single family, mixed use, retail, industrial and multi-family investment properties. Even if you haven’t made your first investment property purchase yet, having the right team on your side is invaluable, especially in competitive markets like Pine Crest, Coconut Grove, Brickell, Miami, Coral Gables, Miami Beach, and Bal Harbour.

Deal-Maker vs. Deal-Breaker: What is a Real Estate Lawyer’s Role in Real Estate Deals?

Published on: August 19, 2013 | by ESQ.title

By: Alejandro E. Jordan, Esq.

Attorneys working on complex real estate deals frequently forget that they are being employed to advance their client’s business objectives, not destroy them with a litany of complications, caveats, and “what-ifs”. After all, at the end of the day, clients employ their attorneys to be deal-makers, not deal breakers.

The difference between the two types of attorneys frequently boils down to their training, experience, and business acumen on the challenging deals that pay the premium dividends. Of course, real estate lawyers must advise their clients on the downsides of a particular deal, but the decision must remain with the client at all times. Even though it is the client’s investment that’s at play (and not the lawyer’s), many lawyers like to “play client” rather than offering guidance and then letting the “real” client decide whether the deal should go forward.

Florida “As Is” Real Estate Contracts

Published on: August 12, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

As the real estate market in South Florida continues to heat up, more homeowners will undoubtedly list their homes for sale in Miami-Dade and Broward County. An important issue that all prospective homebuyers should investigate is what, if any, encumbrances are on the property being sold. Encumbrances are loosely defined as any claims, liabilities, violations, or problems that lessen a property’s value or restrict its marketability. For instance, perhaps the property is located in an uninsurable flood zone, violates height restrictions, or has an illegal mother in law suite that violates the city or county code. Unfortunately, the prospective purchaser may not notice any of these problems at the initial or even subsequent visits to the property, and so they may not be able to include those problems as desired repairs in the initial offer.

Fortunately, the standard Florida Realtors/Florida Bar approved contract provides the prospective purchaser with the right to inspect the property for a limited amount of time and back out if he or she finds too much to be wrong with the property. The default inspection period of time is 15 calendar days unless the parties agree otherwise. The property inspection clause provides the purchaser with the opportunity to retain a real estate lawyer in order to perform the necessary due diligence on the property to evaluate the situation. If the prospective purchaser finds problems, the property inspection clause gives the prospective buyer the right to terminate the contract without losing their deposit. Of course, the buyer also has the right to demand that the seller reduce the sales price to allow the prospective buyer to repair the property themselves. If the seller refuses to amend the contract, the purchaser can then choose to exercise his or her right to back out of the contract.

Miami Dade Judges Expediting Residential Foreclosure Cases

Published on: August 4, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

According to just released statistics, judges in Miami-Dade County have been processing residential foreclosure cases twice as fast as judges in Broward County. While Miami-Dade has South Florida’s largest number of foreclosures, the latest plan in place in Miami-Dade calls for all residential foreclosure cases to be cleared by 2016. Paving the way for the fast foreclosure processing times are a set of newly hired magistrate judges and increased funding from the state in the tune of $25 million dollars.

Broward County is also stepping up its efforts to clear the foreclosure backlog. With the newly freed up money from the Florida Legislature, Broward County is in the process of funding the equivalent of three senior judges, two additional general magistrates, 18 case managers and six secretaries, all of whom will be devoted to processing foreclosure cases for the next year and half.

According to the forecasts, Florida will face 680,000 new foreclosure cases between now and 2016. The majority of these foreclosure cases will be filed in Miami-Dade, Broward County, and Palm Beach County. Obviously, the number of foreclosure cases in these counties is already staggering. For instance, in Broward County alone, there are over 40,000 cases being prosecuted by lenders. Whereas in Miami-Dade, there is a current estimated backlog of 48,000 cases. With numbers like these, Palm Beach County’s estimated 9,000 residential foreclosure cases looks miniscule, however, those cases definitely take a toll on a county that was previously unaccustomed to massive case loads.

The Use of a Lis Pendens to Collect a Debt in Florida

Published on: August 1, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

Oftentimes, creditors seeking to collect money judgments in Miami-Dade or Broward County will file a lis pendens in the public records against real property (i.e. real estate) owned by the debtor. A “lis pendens” is a written notice that a lawsuit has been filed which concerns title to real property or some interest in that real property. A lis pendens is often referred to as a “cloud on title” and will prevent the homeowner from selling or obtaining refinancing on their property until the lis pendens is removed. Other than providing notice to the public, one of the other practical effects of filing the lis pendens is that the debtor feels pressure to pay of their debt.

However, the filing of a lis pendens is not always appropriate and can give rise to an action for damages and attorneys’ fees under certain scenarios. For example, in cases where a creditor is seeking to collect a debt where there is no nexus (i.e. connection) between the real property that the lis pendens describes and the original dispute between the creditor and the debtor, the creditor is expressly forbidden from filing a lis pendens. An example of a situation where there typically is no nexus or connection between the lawsuit and a lis pendens would be where an “unsecured” creditor – such as a credit card debt collection company – files a lawsuit against a Florida homeowner and records a lis pendens in the public records. In such a case, the creditor would be held liable for any damages that the lis pendens causes and would also be required to pay any of the property owner’s attorneys’ fees which he or she incurred in removing the lis pendens.

Thus, when the primary purpose of a lawsuit is to recover money damages and the action does not directly affect the title to or the right of possession of real property, the filing of a notice of lis pendens is not authorized. Thus, a lis pendens is not an appropriate instrument for use in promoting recoveries in actions for money judgments. In the event that a creditor files an unauthorized lis pendens and the lis pendens causes the property owner damages, the property owner is entitled to have the lis pendens removed and can sue the creditor for damages.

What Is a Florida Realtor’s Responsibility To Their Client?

Published on: July 28, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

A rarely investigated subject by most buyers and sellers of residential real estate in South Florida is what role their realtor is playing in the transaction. By Florida Statute, there are three different roles that a realtor may play in a real estate deal. Whether you are buying or selling home, it is important to understand what capacity your realtor is acting in.

In Florida, a realtor may act as a single agent, a transaction broker, or maintain a “no representation status”. Most realtors in Miami-Dade and Broward County are acting as transaction brokers. In fact, and while it may come as a surprise, it is presumed that your realtor is acting as a transaction broker unless agreed to in writing otherwise. A transaction broker is in essence working to close the transaction and is not in a fiduciary relationship with their client. “Fiduciary” means that the broker is “in a relationship of trust and confidence” with the buyer or seller, has the duty of loyalty, confidentiality, obedience, full disclosure, and accounting, and also the duty to use skill, care, and diligence.

Realtors Acting As A Transaction Broker

Pursuant to statute, a transaction broker provides “limited representation to a buyer, a seller, or both … but does not represent either in a fiduciary capacity or as a single agent.” The transaction broker is working as a facilitator between the buyer and seller to close the transaction and does not owe an undivided loyalty to either party. Nonetheless, the transaction broker must, among other things, account for all funds, use skill, care, and diligence in the transaction, deal honestly and fairly with the parties, and disclose all known facts that materially affect the value of residential property that are not readily observable to the buyer. In addition, the transaction broker is prohibited from disclosing either party’s true “bottom line” regarding price negotiations or financing terms, the motivation of either party, and other matters that either party requests be kept confidential.

Abandoned Property and Florida Landlord Tenant Law

Published on: July 26, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

A commercial landlord recently questioned what her rights were with respect to property that a former tenant had left behind in a commercial rental unit. She wanted to know what to do with the abandoned property and whether she could let other people take it out of the unit or whether the abandoned property could be simply thrown away.

According to Florida Statute Section 715.104 before taking any action a landlord must provide written notice to the former tenant and any other parties that the landlord suspects may own the property that was left behind.

The written notice needs to identify the property with specificity and advise the former tenant that they must pick up the property within 10 days (if the notice is personally delivered) or within 15 days (if the notice is sent by mail) or the property will be sold or thrown-out.

Florida Foreclosure Law Will Have Serious Consequences for Homeowners in Miami-Dade and Broward County

Published on: July 21, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

In an effort to alleviate the foreclosure crisis, Florida’s Legislature recently passed a foreclosure bill (House Bill 87) that will significantly impact Miami-Dade and Broward County homeowners facing foreclosure. From a homeowner’s perspective, the biggest problem with Florida’s latest foreclosure law is that it speeds up the foreclosure process by requiring the homeowner to prove to the Court in an “order to show cause hearing” that the foreclosure should be stopped. On the other hand, the biggest relief to the homeowner is that the Bank will only have one year to pursue a deficiency judgment (i.e. the difference between what the homeowner owes on the loan and what the home sells for at a foreclosure sale). Other important aspects of Florida’s latest foreclosure law, which all homeowners facing foreclosure in Miami and Broward County should know about, include:

The Positives

Foreclosure Deficiency Judgments: The time frame for the Bank to pursue a deficiency judgment against the homeowner has been drastically shortened from five (5) years to one (1) year. That means that the Bank only has one year to pursue a collection action against the homeowner for the amount that the Homeowner actually owed on the loan and what the house ultimately sold for in the foreclosure sale. If the Bank does not initiate a collection action against the Homeowner within one year, the Bank loses the right to collect the deficiency judgment.

Tightened Paperwork Requirements: Banks are now required to initially identify in their foreclosure complaint whether they are in possession of the mortgage note and/or their factual basis for bringing a foreclosure action without being in possession of the mortgage note. If the Bank is in possession of the promissory note, the Bank must file a copy of the promissory note with the foreclosure complaint. If the Bank fails to file the promissory note with the foreclosure complaint then there may be grounds to file a motion to dismiss the foreclosure lawsuit.