Update: More Florida Condo Contract Lawsuits Filed Which May Yield Important Developments In Condo Contract Law

Two recent news articles provide examples of the types of condo contract lawsuits which are currently filling up Florida’s courts, and which will undoubtedly contribute to the evolution of Florida state law of condo contracts in the coming months and years.

First is this article from Sarasota County, on the West Coast of Florida, which reports that a slew of complaints have been filed against the developers of Bel Mare at Riviera Dunes and the Palms at Riviera Dunes (both in Palmetto), and the Promenade at Riverwalk in Bradenton.  The common jist of these lawsuits appears to be that the projects have not been completed within two years, as promised in the purchase agreements.  And while the developers tried to qualify the promised two-year construction period to account for unforeseen circumstances, such qualification may not pass muster under the federal Interstate Land Sales Full Disclosure Act (ILSA).  I have written more generally on the interaction between ILSA and Florida state condo law here.

The second report is from West Palm Beach, where developer Merco Group is allegedly refusing to return $10 million worth of deposits even though the Palladio Terrace condominium remains unbuilt. At issue here is a provision of Florida law, 718.202(3), Florida Statutes (2007), which enables deposits in excess of 10 % of the purchase price to be used “in the actual construction and development of the condominium property . . .” As the buyers’ lawyer points out in the article, the developer can only access this money “when the construction of improvements has begun,” — so the fact that the project has apparently not yet broken dirt would seem to weigh heavily against the developer, even if the developer has been using the deposits in excess of 10% for planning costs such as architects and engineers. In any event, it will be interesting to monitor this lawsuit and see what case law, if any, emerges from it.

For other analyses which I have written on the always interesting and shifting area of Florida condo law, see here and here.

This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the author.

Mr. Beck has a law degree from Harvard Law School, and practices law in the courts of South Florida. A significant portion of his practice is devoted to condo contract issues. He can be reached at 305-789-0072 or jared@beckandlee.com



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