As I’ve posted here and here, it seems that new case law under the Interstate Land Sales Full Disclosure Act (ILSA) is being made in Florida courts on what might be a weekly basis, owing to the great surge of lawsuits brought by Florida condo purchasers looking to recover their preconstruction deposit money. Those involved in this type of litigation — or who are wondering what to do about a condo purchase agreement which they signed years ago and for which they paid a hefty deposit — know that it is easy to think of many of these lawsuits as a sheer “numbers game” involving numbers such as these: the closing/default rates at various large projects; the tally of condominiums appearing on various lender “blacklists” published by the likes of BankUnited, Washington Mutual, Popular Mortgage, and others; and the numerical citations to the various sections of ILSA and the Florida condominium statute under which many of the legal rights of purchasers arise.
Taking a step back from the “numbers,” even just momentarily, however, can afford a broader and potentially insightful picture of the situation on the ground concerning Miami condos. Realtor-guru Lucas Lechuga has a couple of posts up on his popular blog which are helpful in this respect. One of Lechuga’s posts links to several video clips which ran recently on MSNBC and CNBC and really do a fanstastic job of conveying visually just how transformative of Miami’s skyline the late condo boom has been. Watching the video really serves as a reminder that all that preconstruction deposit money has gone to truly expanding the shape of a city — even if many of those who put up the money will never close on the buildings which they helped to finance. In another of his posts, Lechuga observes sharply that “The Miami condo market is not a local market . . . it is global,” and notes that those who are best positioned to take advantage of current Miami condo market conditions tend to be foreign buyers with large amounts of cash on hand who can take ready advantage of the weak dollar. I agree wholeheartedly with this sentiment, but with the proviso that the Miami condo market has been a “global market” for quite some time. In fact, many foreign buyers are also among the poorly positioned, as I can vouch from my experience that numerous foreign buyers can be counted among the hordes of individuals who paid deposits for South Florida condominiums before the market went into free-fall. And in many of these cases, foreign buyers have effectively purchased for themselves a portion of American litigation insofar as they have joined in the numerous lawsuits seeking to obtain preconstruction deposit refunds from developers.
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 and other real estate purchase agreements. He can be reached at 305-789-0072 or firstname.lastname@example.org