The anonymous South Florida Lawyers Blog recently posted an article on one of the so-called “deposit recovery services” which have sprouted up in recent months among South Florida law firms and lawyers looking to “cash in” on the wave of condo purchasers seeking to cancel their contracts and get their deposits refunded. My view of this trend is that condo buyers must take the time to research and choose a lawyer wisely, if they are going to retain a lawyer at all. The following points are worth keeping in mind:
1. There is really no such thing as a deposit recovery “service” these days. That makes it sound like a buyer can simply pay money to an attorney, who will then go through some straightforward, routine procedure to get the buyer his or her deposit back (for example, analogous to a title insurance “service”). In truth, there is a great deal of condo contract litigation happening right now because the vast majority of developers, in my experience, are not refunding deposits without the buyer filing a lawsuit — no matter how meritorious the buyer’s claims are.
2. Litigation is the heart and soul of the adversarial process which characterizes the American legal system. Litigation essentially means war, within the confines of the judicial system, between developers and buyers. If you have made the decision to go to war, you need to arm yourself appropriately. For condo buyers looking to recover deposit money in the current real estate market, that means hiring an effective litigator. Buyers should be wary of those who simply tout themselves as offering a deposit recovery “service.”
3. Indeed, my experience is that some lawyers who made a lot of money in South Florida as real estate transactional attorneys for condo purchases when times were good are now trying to grab the business of representing buyers seeking to cancel their contracts. Unfortunately, transactional work and litigation are two very different skill sets. A transactional specialist may not be terribly effective in persuading a court that a contract should be cancelled.
4. Ultimately, a poor choice of lawyer can mean throwing good money after bad. A buyer who is not going to make an informed decision on which lawyer to retain is probably better off simply walking away from the deposit and hiring no lawyer at all. For example, paying a lawyer to simply write and file a complaint without doing anything further is usually a waste of money. It pays to do your research.
To date, this blog has largely focused on current key and developing issues in the law governing Florida condominium contracts. In the coming days, I intend to post some more practical pointers for those who are gearing up for a potential cancellation fight, so please stay tuned.
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. He practices in all areas of business litigation, with a significant portion of his practice devoted to issues arising under condominium purchase agreements. He can be reached at 305-789-0072 or firstname.lastname@example.org