Miami Lawyer Blog

AARON RESNICK'S TOP TEN THINGS TO KNOW WHEN BUYING A CONDOMINIUM

Condo financing can be challenging these days. Before selecting your new home, save yourself some time and frustration by checking with the HOA against this list of criteria to make sure the loan you want is available:
1. Is the condo complex FHA approved? This means the project is listed on the FHA approved list and has recently been recertified to meet current FHA guidelines. The project still needs to meet items 2 - 10 on this list in order to qualify for FHA.
2. What is the owner occupancy ratio in the project? This is determined by finding out how many total units there are, how many are owner occupied, and how many are rented. FHA requires 50% owner occupancy. Fannie Mae and Freddie Mac require 51%. Some conventional financing allows for owner occupied buyers only with at least 10% down when these ratios cannot be met.
3. How many owners are more than 30 days late on HOA dues? FHA and conventional financing requires no more than 15% of the owners be late or the project is considered non warrantable.
4. Does any one person or entity own more than 10% of the project? This can be an issue in small complexes when someone owns more than one unit or has combined two units into one.
5. How much of the building is mixed use? Many newer projects in Boulder and metro Denver have a mixed‐use component. While it's great for urban planning, it can be challenging for financing. If more than 25% of the total square footage is used for commercial or business, the project is ineligible for conventional or FHA financing. Some smart developers have phased their projects in such a way that they avoid this issue so always be sure to check.
6. Is the HOA in a lawsuit? While this isn't a prevalent problem, it does come up. If the HOA is in any kind of lawsuit with owners or contractors or anyone else, FHA and conventional financing will not be available until the lawsuit is settled.
7. Does the HOA annual budget include 10% in reserves? Most well‐run HOAs have a reserve built into their annual operating budget but it is important to make sure.
8. Does the HOA have $1 million liability coverage? This is a minimum industry standard.
9. If the project is over 20 units, does it have fidelity bond coverage? Another new industry standard for larger complexes to protect against mismanagement of HOA funds.
10. If the project is FHA approved, have they allocated funds for FHA re‐approval every 2 years? FHA now requires every project be recertified every 2 years. It's a good idea to make sure the HOA has the resources allocated in the budget for this new additional cost. Especially if the condo price point is in lower end of the spectrum, you
will be better prepared for resale by making sure the condo you buy will be easy to finance for a new buyer when you're ready to sell and move up.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

CATACLYSMIC RULING IN FAVOR OF PURCHASERS OF NEW CONSTRUCTION CONDOMINIUM DEPOSITS ISSUED BY THIRD DCA ENTITLING CERTAIN BUYERS TO FULL REFUND OF THEIR ESCROW DEPOSITS

Miami, Florida - September 7, 2011 - Florida's Third District Court of Appeals rendered an opinion today in one of the most significant legal decisions in Florida related preconstruction condominium deposit recovery cases. Attorney Aaron Resnick, one of the first condominium deposit recovery attorneys in Florida, has referred to the ruling as "potentially cataclysmic" for developers. According to Resnick, the Third District Court of Appeals ruled that if a developer did not strictly comply with Florida Statute § 718.202 by failing to use two separate escrow accounts for a buyer's purchase deposits, then a buyer could recover their entire deposit as well as their attorneys' fees and costs from the developer. The decision involved two consolidated condominium deposit cases against North Carillon, LLC and First American Title Insurance Company.

The Court held that the title insurance company did not have liability to the purchasers even if they funds were held in violation of the statute. The United States District Court for the Southern District of Florida rendered a similar ruling in 2009, Double AA International Investment Group, Inc. v. Swire Pacific Holdings, Inc., 674 F. Supp. 2d. 1344 (S.D. Fla. 2009), aff'd in part, vacated in part, 637 F.3d 1169 (11th Cir. 2011). That ruling was adopted by the Third District Court of Appeals. After the Double AA ruling, the Florida Legislature, after heavy lobbying by condominium developers, amended Florida Statute § 718.202 with the intention of undermining the Double AA decision and to clarify the statute so that the two escrow account requirement was not mandatory under the law.

The Third District Court of Appeals ruled that this amendment could not be applied retroactively to impair a purchaser's statutory right to void the contract if the statute was not complied with. The Third District Court of Appeals specifically concluded that if it were applied retroactively it "would impermissibly impair each buyer's pre-amendment contract rights."

Resnick notes that the developer in the case can still move for a rehearing of the decision and could attempt to appeal it to the Supreme Court of Florida. However, in the interim, Resnick articulated the law has shifted clearly in the favor of consumers on this issue and the doors may have been opened for persons who thought they had lost everything to seek full recovery of their deposits. As Resnick noted, "the Third District has ruled conclusively that buyers, pre the 2010 amendment, were entitled to have their first 10% deposit in an escrow account separate and distinct from the special escrow account for that buyer's 'in excess of 10 percent'".

Visit www.thefirmmiami.com or www.recovermydeposit.com today to receive information on the Law Offices of Aaron Resnick, P.A. and Recover My Deposit.
For more questions about this release please contact info@thefirmmiami.com or call 305.672.-7495.

CATACLYSMIC RULING IN FAVOR OF PURCHASERS OF NEW CONSTRUCTION CONDOMINIUM DEPOSITS ISSUED BY THIRD DCA ENTITLING CERTAIN BUYERS TO FULL REFUND OF THEIR ESCROW DEPOSITS

Miami, Florida - September 7, 2011 - Florida's Third District Court of Appeals rendered an opinion today in one of the most significant legal decisions in Florida related preconstruction condominium deposit recovery cases. Attorney Aaron Resnick, one of the first condominium deposit recovery attorneys in Florida, has referred to the ruling as "potentially cataclysmic" for developers. According to Resnick, the Third District Court of Appeals ruled that if a developer did not strictly comply with Florida Statute § 718.202 by failing to use two separate escrow accounts for a buyer's purchase deposits, then a buyer could recover their entire deposit as well as their attorneys' fees and costs from the developer. The decision involved two consolidated condominium deposit cases against North Carillon, LLC and First American Title Insurance Company.

The Court held that the title insurance company did not have liability to the purchasers even if they funds were held in violation of the statute. The United States District Court for the Southern District of Florida rendered a similar ruling in 2009, Double AA International Investment Group, Inc. v. Swire Pacific Holdings, Inc., 674 F. Supp. 2d. 1344 (S.D. Fla. 2009), aff'd in part, vacated in part, 637 F.3d 1169 (11th Cir. 2011). That ruling was adopted by the Third District Court of Appeals. After the Double AA ruling, the Florida Legislature, after heavy lobbying by condominium developers, amended Florida Statute § 718.202 with the intention of undermining the Double AA decision and to clarify the statute so that the two escrow account requirement was not mandatory under the law.

The Third District Court of Appeals ruled that this amendment could not be applied retroactively to impair a purchaser's statutory right to void the contract if the statute was not complied with. The Third District Court of Appeals specifically concluded that if it were applied retroactively it "would impermissibly impair each buyer's pre-amendment contract rights."

Resnick notes that the developer in the case can still move for a rehearing of the decision and could attempt to appeal it to the Supreme Court of Florida. However, in the interim, Resnick articulated the law has shifted clearly in the favor of consumers on this issue and the doors may have been opened for persons who thought they had lost everything to seek full recovery of their deposits. As Resnick noted, "the Third District has ruled conclusively that buyers, pre the 2010 amendment, were entitled to have their first 10% deposit in an escrow account separate and distinct from the special escrow account for that buyer's 'in excess of 10 percent'".

Visit www.thefirmmiami.com or www.recovermydeposit.com today to receive information on the Law Offices of Aaron Resnick, P.A. and Recover My Deposit.
For more questions about this release please contact info@thefirmmiami.com or call 305.672.-7495.

A new bill that was recently proposed by Florida lawmakers and is set to go to the Governors desk could change how developers in Florida will apply for permits to build. Supporters of the bill insist Florida has placed far to difficult requirements on contractors trying to develop the state.

House Bill 993 will change the way new developments proceed by putting new, harsher requirements on groups who challenge proposed developments. Environmentalists are worried the bill will make it more difficult to protect the environment from detrimental building. Previously, contractors were required to prove why their proposed building would not harm the proposed building area, but if the proposed bill passes that will change drastically. Instead, groups who oppose developers' plans will be required to prove how the proposed development is harmful. This change in the burden of proof could make it far easier for builders to get approval for their plans.

The proposed law could make it very difficult to challenge contractors and developers, which has local environmentalists worried about the effect on Florida's water supplies. Most are appalled by the bill. Supporters of the bill insist the bill is not about damaging the environment, but increasing building in Florida and making it easier for developers to bring much needed constructions jobs back to the State. They insist that out of state developers avoid Florida because they have grown weary of spending long periods of time locked in court battles with environmentalists who do not live any where near the proposed developments. Developers welcome the bill, saying the previous laws were set up in a way that put them at a disadvantage in court.

Critics and Florida conservationist and environmentalists see the bill as a free for all attack on the environment and already fragile water quality in the state. Local leaders who oppose the bill cite concerns over the nearly 85,000 acres located in Lee county that are at risk of being developed. In fact, a southern Florida judge is already so critical of the current water quality of the state he said he is considering asking the federal government to step in and enforce water quality laws that are already in place.

If you are concerned with the legality of this bill or any other commercial law issue, contact a Miami commercial lawyer. Commercial law covers a wide range of issues involving business processes and the buying and selling of goods. If your company is being sued or if you believe your rights have been infringed upon, a Miami commercial lawyer can tell you if you have a viable case. Most Miami commercial lawyers will offer a free consultation to help you decide if you have a case.

Links:

Builders hail late legislation change, by MARY WOZNIAK, May 6th 2011

Condos are everywhere in Miami, and with the amount of condos in Miami that are present it sometimes becomes more than necessary to enforce issues that relate to condo law. What is Condo Law? There are many aspects to condo law, but for the sake of this blog, we are going to talk about the bylaws with in a condo community. Much like a HOA or homeowners association, condo law within a community is when the tenants within the community sign a contract that governs the condominium community.

Examples of What You Might Find in a Condominium Community Contract:
One of the most popular thins that will be on a contract governing the condo community will be the areas in which all tenants and condo owners use, for example the breezeways, lounge or pool area. These areas are know and "common areas" and because it is a common area, it is important that everyone takes care of the area and abides by certain rules to maintain order within these areas. Some of the rules you might find about these areas will be things about cleanliness, behavior and noise levels.

Noise levels are yet another extremely popular item you might find on a condominium community contract. Regardless of what the city of Miami may says about what time you can make noise, you will have to obey the rules of the community as well. For instance, if the city says that a certain level of noise is acceptable until 10pm in the evening and the Condo contract states that you must not make noise after 9pm, you will need to abide by the Condo specified time.

If you are looking to set up a contract for your condo community, it is extremely wise to consult with a condo law attorney in Miami that can help you make sure that you are writing the contract correctly, they can even write it for you to assure it is done properly. A condominium lawyer in Miami can help enforce these bylaws by sending notices to the residents of the community and by taking them to court when necessary. You can also use an attorney in Miami that specializes in condo law if you are accused or are being sued by a condominium community. At the very least you can utilize the free initial consultation that most condo law attorneys in Miami offer in order to better understand condominium community laws.