The Miami Herald reports on the newest flavor of lawsuit directly attributable to the South Florida condo market crisis: a developer suing real estate brokers to claw back commissions for condo units on which the buyers failed to close. According to the Herald, Miami condo titan Related Group filed at least 15 lawsuits in the past couple months against brokerages, seeking recovery of over $460,000 in commissions with respect to defaulted units at the Hallandale Beach Club Tower III.
This is certainly an aggressive move on Related’s part, although perhaps not a surprising move given that every last dollar counts under current condo market conditions. I would expect a wave of similar suits to follow with respect to other projects with high default rates, and as other developers take their cue from Related, feeding into the condo litigation tsunami which to date has largely consisted of buyers seeking recovery of their preconstruction deposits from developers.
From a legal standpoint, and solely going by the Herald article, it would seem that the key issues in the new actions filed by Related revolve around interpreting the terms of its agreements with the brokerages (which apparently state that commissions are not earned until the units close) and reconciling those agreements with industry custom (by which commissions were paid to the brokers after the initial deposits were paid). Like the salient issues in condo purchase agreement litigation which have been covered extensively in this blog, these are contentious issues and will likely spawn conflicting rulings in the coming months if a large volume of similar cases are indeed filed.
On another note, I want to extend my thanks to everyone who has been following the blog, and to the many readers who have taken the time to e-mail me with comments or questions recently, or have posted their comments directly to the blog itself. I greatly enjoy hearing from individuals all over the world — both laypersons and fellow attorneys — who have an interest in the various legal issues arising from the Florida condo market. I encourage readers to continue sending me questions and comments, as they help immensely with this blog’s mission of bringing some clarity or at least focus with respect to some of the current legal uncertainties buzzing in Florida courts. Also, please stay tuned in the coming weeks as I am presently working on a series of articles which will explore in greater depth some of the more pressing legal issues arising out of the federal Interstate Land Sales Full Dislcosure Act (ILSA) and the Florida condominium statute which have already been examined in this blog.
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. His law firm, Beck & Lee Business Trial Lawyers in Miami, is dedicated to the practice of business and real estate litigation. A significant portion of Mr. Beck’s practice is devoted to issues arising under condominium purchase agreements. He can be reached at 305-789-0072 or firstname.lastname@example.org