#MiamiRealEstateLawyer

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.

Condo & HOA Disputes

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

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Condominiums offer a long list of benefits to those who opt to reside in them. Condominium unit owners have the advantage of owning property without the hassle of property maintenance, repairs, and security concerns. Condos are very popular in the city for practical purposes and many times can be cheaper than a single-family home. It is no wonder why there is a high-rise residential structure being constructed or about to open soon in almost any prime location in the Palm Beach, Miami, and Broward areas.

Construction Disputes & The Doctrine of Substantial Performance

Published on: October 7, 2013 | by ESQ.title

By: Dan Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

As the South Florida real estate market continues to heat up, construction disputes are once again becoming a common occurrence in Miami-Dade, Broward and Palm Beach County.

The Doctrine of Substantial Performance

While a party’s legal rights in a construction dispute are governed by the operative contract documents, they are also governed by the doctrine of substantial performance or substantial completion. Florida courts have defined substantial performance as that performance of a contract which, while not full performance, is so nearly equivalent to what was bargained for that it would be unreasonable to deny the contractor the full contract price subject to the client’s right to recover whatever damages they may have suffered because of the contractor’s failure to render full performance, i.e. complete the construction job.

According to Florida law, under the doctrine of substantial performance, the contractor has the right to recover the contract price from the client; however, the client also has the right to recover any damages caused by the contractor’s failure to render full performance. Sometimes, the offset damages that the client is entitled to because construction was not completed end up exceeding the contract price that the contractor is entitled to.

Standard Florida Real Estate Contract (Part 2 of 2)

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

By: Dan Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Here is Part 2 of the new FAR-BAR Contract blog post:

Buyer Closing Costs

Paragraph 9(b) offers a list of closing costs to be paid by the buyer. The owner’s title policy premium has been added as a bullet point because buyers have been paying this cost when 9(c)(iii) has been checked.

Under the contract options of paragraphs 9(c)(i) and (ii), the owner’s policy and charges will now also include a municipal lien search.

If paragraph 9(c)(iii) (the Miami-Dade or Broward County provision is selected) a municipal lien search has already been included.

Flood Zone and Elevation Certification

Paragraph 10(d) now includes a blank space where the parties can insert the amount of time a buyer has in which to terminate the contract for flood zone related reasons. If the blank line is not filled in, the time frame defaults to 20 days from the contract’s effective date

In addition, a disclosure has been added to Paragraph 10(d). In some cases, a buyer will have to pay actuarial rates for flood coverage that could be notably higher than the seller was paying. The disclosure explains this possibility and the type of buyers that could be affected by the change.

Finally, the disclosure now informs the buyer that a new elevation certificate may be necessary.

Standard Florida Real Estate Contract (Part 1 of 2)

Published on: September 14, 2013 | by ESQ.title

By: Dan Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

The Florida BAR and Florida Association of Realtors recently adopted a new standard real estate contract. Because the new “FAR-BAR” contract will control the majority of residential real estate transactions in Florida, it is important to understand what amendments were made. The following is not an exhaustive list of differences between the old and new FAR-BAR contract, but summarizes some of the major changes:

Personal Property

The Check Boxes in Paragraph 1(d) were removed. To simplify the contract three items were added to the list of items transferred by the seller at the time of sale: (1) refrigerators, (2) smoke detectors; and (3) storm shutters. If the buyer and seller want to include additional items of personal property to be transferred to the buyer those items can be inserted at the bottom of Paragraph 1(d).

Is a Verbal Option to Purchase Real Estate in Florida Enforceable?

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

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Consider a scenario where you have been leasing a residential property in Miami on a month-to-month basis for a little over a year but would like the eventual opportunity to purchase the property. Over the course of several lengthy conversations between you (the tenant) and the property owner (the landlord), the landlord ultimately agrees to give you the exclusive option to purchase the property once you resolve some old credit issues associated with a prior foreclosure. After your landlord gives you at least two verbal assurances in one week alone that you have an option to purchase the property and you shake hands on the agreement, you believe that the “deal is done.” However, after searching on Zillow one week later, you discover that your landlord has listed your property for sale with a broker. You immediately contact the listing broker and are told that the property is now under contract for sale to someone else and that you have one month to leave.

What are your legal rights in this situation? Can you sue your landlord to enforce the verbal option agreement that you accepted? Do you really only have one month left before you have to leave when you have lived at the property for over a year? Sadly, the answer to all of these questions is that you have no right to purchase the property or legal recourse against your landlord. To make matters worse, it’s also true that you have no legal right to stay in the property for anything longer than the thirty days that the landlord provided. Here is why, and here is how to prevent this tragic situation from playing out in the first place: