Sunday’s Miami Herald offers a revealing look at Jorge Perez — Miami’s “condo king” — and the declining fortunes of his company, The Related Group, in the midst of the economic meltdown. Matthew Haggman’s piece zeroes in on Related’s massive and ambitious ICON Brickell project, a victim of terrible market timing, which has so far seen miniscule closing rates. It is striking that Perez, who readily draws comparisons between present times and the Great Depression, finds himself in a position structurally similar to that of the more “average” American real estate investor who may be underwater on a mortgage or two: that is, hoping for some mercy from his lenders.
Perez’s situation is a sure sign that these are unusually brutal times without easy solutions. This holds especially true for legal avenues of relief. Back in December 2007, I wrote that the swelling numbers of condo purchasers looking for legal representation in a falling market were well-advised to research attorneys carefully, and to retain a skilled litigator. That advice may be even more relevant today. In recent months, generally speaking, courts have taken a narrow view of one of the primary sources of protection for individual real estate buyers and investors at the time of sale, the federal Interstate Land Sales Full Disclosure Act (ILSA). And those cases in which buyers are more inclined to get favorable rulings tend to be relatively factually intensive, such as construction delay cases, where litigation discovery tools must be effectively deployed to prove that the causes of a delayed project were legally inexcusable. To sum it up, developers are hunkering down and battling for their survival. Challenging them in court requires litigation acumen and a fighting spirit. There are no “magic bullets.”
In my view, a recently filed lawsuit that has been making headlines in Seattle exemplifies the kind of “magic bullet” theories which are not getting much sympathy in court these days. As reported in The Seattle Times, the lawsuit was filed by several buyers of condos in a luxury high-rise, including an individual making $20,000-a-year who put down approximately $75,000 in deposit money on a $1.5 million unit. Part of what the lawsuit alleges, according to the article, is that there was deception insofar as the contract they all signed “was written in English, a language they didn’t understand.” Unfortunately, this is not an availing legal argument. It is hard to imagine a court — especially in the context of a high-dollar real estate transaction — excusing a contracting party from performance because the documents were written in an unfamiliar language.
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. His law firm, Beck & Lee Business Trial Lawyers in Miami, is dedicated to the practice of business and real estate litigation, as well as pursuing the rights and remedies of consumers and investors. A significant portion of Mr. Beck’s practice is devoted to issues arising under purchase contracts for real estate, including condominiums, condo-hotels, single-family homes, and commercial property. Mr. Beck is a member of the Florida and California Bars, and litigates in other U.S. jurisdictions in conjunction with qualified local counsel. He can be reached at 305-789-0072 or email@example.com