Senate Bill 1520 was signed by Governor Rick Scott on June 16, 2017. The following is a summary of the bill, which will take effect on July 1, 2017:

SB 1520 amends 718.117, Florida Statutes, regarding the optional termination of condominiums, making it more difficult for a Plan of Termination to be passed without full consent of the unit owners.  The changes to the law reduce the amount of unit owners required to reject a plan, postpone the time until another plan can be voted on, and requires that the plan be approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation (“Division”) based on factual and public policy reasons. Further, it guarantees that an optional termination will not result in a unit owner receiving less than his or her purchase price of the unit.

Changes to 718.117(1), (3) and addition of (21):

Applicability

  • The statute contains language indicating it is controlling over language in a condominium’s declaration and applies to all condominiums in the state in existence on or after July 1, 2007. The phrase: “Unless the declaration provides for a lower percentage” has been stricken indicating that the threshold established in the statute is the minimum vote required for optional termination.

Optional Termination

  • Prior to the effective date of the amendment, in order to approve a plan of termination, 80% of unit owners must approve the plan, and no more than 10% of unit owners can object. The changes to the statute now require an 80% unit owner vote approving a plan of termination; with less than 5% objecting. Additionally, the changes to the statute now provide that once the plan of termination passes a unit owner vote, it would then need to be approved by the Division.
  • The Division will have 45 days to review the Plan of Termination and notify the association of any deficiencies, or if it is rejected. If the Division does not respond within 45 days, the plan is deemed accepted.  Under the new law, plans of termination will now need to include factual circumstances that show that the plan complies with Section 718.117, Florida Statutes, and supports the public policies of the section, which are listed below.
  • If a plan of termination is rejected by 5% or more of the total voting interests of the condominium, then a new plan may not be considered for 24 months, as opposed to the current period of 18 months.
  • Under the current law, a condominium owner who purchased a unit from the developer must be made “whole” upon termination. In other words, the plan of termination could not provide for paying the unit owner less than the original purchase price. SB 1520 removes the language that restricts this requirement only to the original unit owner, meaning that an owner who purchased a resale condominium would also be entitled to receive a minimum of the purchase price upon optional termination. The bill applies this section to all unit owners, not just the ones who object to the plan.

Public Policy Reasons the DBPR Evaluates During Review for Optional Termination

  • Ensure continued maintenance, management, and repair of stormwater management systems, conservation areas, and conservation easements; or avoiding the costs and responsibilities of maintenance, management, and repair from falling on the shoulders of the taxpayers.
  • Prevent covenants from impairing the continued productive use of the property.
  • Protect state residents from health and safety hazards.
  • Provide fair treatment and just compensation for individuals, and preserve property values.
  • Protect homestead property and homestead property rights.

For a complete reading of the adopted legislation, please refer to the text of the bills available on the websites for the Florida Senate (www.flsenate.gov) and Florida House of Representatives (www.myfloridahouse.gov).

Steve-Siegfried-2013-srhl-lawSteven M. Siegfried, our firm’s founder who launched the practice 40 years ago in 1977, was the subject of a “Profiles in Law” article published by the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which appears in today’s edition of the newspaper, chronicles his career and highlights his achievements as a construction law specialist, professor and writer for the last four decades.

The profile article, written by DBR reporter Samantha Joseph, reads:

Steven M. Siegfried wrote the book on construction law. The literal book. The one the American Bar Association published in 1987 as an early nod to a then-fledgling practice area.

His work, “Introduction to Construction Law,” became a standard reference for real estate and construction lawyers across Florida for the past three decades. Over several incarnations, it helped establish the Siegfried Rivera Hyman Lerner De La Torre Mars & Sobel partner as a foremost authority on a specialty he’s long championed.

The article notes that Steve’s other publications focus on construction lien law, construction defects, condominium warranty claims and the statute of limitations, culminating with his authoring of “Florida Construction Law” by Aspen Publishers in 2001.

dbr-logo-1-300x57It states that his concentration on construction and community association law began in 1976, when he foresaw that the real estate sector would become a pillar of the region’s economy that would require highly specialized practitioners.  The article notes that his firm “will celebrate its 40th anniversary this year. It employs 46 attorneys concentrating on real estate, construction, community associations, and property insurance . . . from offices in Miami-Dade, Broward and Palm Beach counties.”

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This year our firm is celebrating the 40th anniversary of its founding.  In 1977, Steven M. Siegfried had the vision to bring great lawyers and supporting staff together to focus on every aspect of Florida’s burgeoning construction, community association and real estate industries.

As Florida has grown, so too has SRHL.  Maintaining our focus, we are now 46 attorneys in our three South Florida offices.  As required by the evolution of the industries in which our clients excel, we have incorporated expertise in insurance, creditors’ rights, and the commercial transactions and disputes that relate to these core competencies.  We also have developed an expertise in aircraft transactional work.

As we reflect on our 40 years of service in these vital industries, we take pride in having played significant roles in some of the most important and challenging projects throughout South Florida and the nation.  We look forward to furthering our role as one of the most trusted sources for legal counsel and representation in these fields in the years to come.

bmclarkFirm partner B. Michael Clark, Jr. authored a guest column that appeared as a “Board of Contributors” feature in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which was titled “Court Upholds Concurrent Cause Doctrine in Win for Property Policyholders,” focused on the positive ramifications for Florida commercial and residential insurance policyholders of the state Supreme Court’s recent decision in the case of Sebo v. American Home Assurance.  Michael’s article reads:

The recent Supreme Court of Florida decision in Sebo v. American Home Assurance rejecting the “efficient proximate cause doctrine” in favor of the “concurrent cause doctrine” for property insurance claims represents a significant win for residential and commercial policyholders.

The state’s highest court has determined that the appropriate theory of recovery for claims in which two or more perils contribute to a loss but at least one of the perils is excluded from coverage is the concurrent cause doctrine. Under the rejected efficient proximate cause theory, when multiple perils cause a loss, it is the efficient cause — the one that sets the other in motion — to which the loss is attributed.

For the insurance industry, the efficient proximate cause doctrine has always been preferred. If the carriers are able to demonstrate that the efficient cause behind a loss is excluded from coverage under the policy, then the entire claim may be denied.

dbr-logo-thumb-400x76-51605-300x57Sebo makes the concurrent cause doctrine the legal standard to be applied for property insurance claims in Florida. Now insurers must cover a loss even if the covered peril is the secondary cause of the loss, which was concurrent with but not the primary or efficient cause.

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sodessbmclarkThe firm’s B. Michael Clark, Jr. and Susan C. Odess wrote an article that appeared as the “My View” guest column in today’s Business Monday section of the Miami Herald.  The article, which was titled “Insurers Make Mockery of Work Product Privilege Laws,” focused on the abuse by insurance companies of the state’s untenable work product privilege laws shielding their entire “claim file” from discovery in litigation.  The article reads:

A series of misinterpreted and sometimes contradictory court rulings during the last decade have created a situation in which the state courts and federal courts in Florida disagree on whether insurance carriers’ claim files are subject to discovery by plaintiffs in first-party property litigation. As a result, insurers are now afforded greater work product protection than any others in Florida’s state courts by being allowed to shield important reports, estimates, communications and photographs that would be subject to discovery in the state’s federal courts as well as in many of the other courts in the country.

The work product doctrine, which is incorporated into both the Federal and Florida Rules of Civil Procedure, is intended to shield from discovery documents and communications that are created in anticipation of litigation. It has been extended by Florida’s state courts to include all insurance company reports, communications, correspondence and routine claims investigation documents simply because the companies deem these materials to be part of their claim file, regardless of the fact that these documents were not generated in anticipation of litigation but rather during the routine course of claim investigation.

This has created a de facto new “insurer claim file” privilege that exists solely to enable insurers to exempt relevant documents from discovery, and it has quickly become the most confusing and arbitrarily enforced privilege in the state’s legal system. Insurers routinely invoke this privilege to avoid divulging everything except for copies of the actual policy and any written communications they had previously sent to the policyholder.

miamiheraldlogojpegIt seems preposterous to identify all pre-loss reports, photographs and emails starting from the moment when an insurer first issued a policy to have been generated in preparation for litigation. Yet somehow the state courts in Florida have (mis)interpreted several rulings and created an all-encompassing work product immunity for everything that insurers deem to be a part of their sacred claim file, regardless of whether litigation was actually being contemplated.

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The recent news from KLX Aerospace Solutions, the world’s leading distributor and service provider of aerospace fasteners and consumables, of its build-to-suit lease for its new global headquarters and distribution hub totaling more than 500,000 square-feet in Medley drew a great deal of attention in the aviation and real estate industries.

The lease represents the relocation and expansion of the company’s local facilities, and it helps to solidify South Florida’s stature as one of the world’s fastest-growing logistics, trade and air transport hubs.

klx1The company will add 100 jobs to its existing 600 as it expands from its existing Doral headquarters (see photo) to the newly built facility.  The building will be located at the intersection of NW 107 Street and 97 Avenue between Florida’s Turnpike and I-75 in Countyline Corporate Park.  It will include two floors of office space with the ability to expand as well as a state-of-the-art storage and distribution area.  KLX is one of many major players in the aviation industry with a presence in the Miami and Doral area, including Lockheed Martin and World Fuel Services.

Our firm’s other real estate attorneys and I congratulate KLX and all of the professionals who played a role in making this major aviation sector real estate deal come to fruition.  Click here to read the company’s press release on the new lease.

Oscar R. Rivera

Oscar R. Rivera

The Daily Business Review, South Florida’s only business daily and official court newspaper, chronicles in its weekly “Dealmakers” column the work of South Florida professionals in putting together and finalizing many of the area’s largest real estate transactions.  The firm’s Oscar R. Rivera and David B. Halberstein were the featured Dealmakers in this week’s column, which appeared in today’s edition of the newspaper.  The article, which is titled “Attorneys for Buyer Closed $74M Office Deal with Bonus Acre to Develop,” focused on their work in representing the buyer of the Doral Costa office park in a $73.75 million acquisition.  It reads:

David B. Halberstein

David B. Halberstein

The reasons an affiliate of Triarch Investment Group wanted to acquire the 17.8-acre Doral Costa Office Park are clear.

The three Class A office buildings are 96 percent leased in a strong submarket. Tenants include Allstate Corp., HSBC Bank and Samsung. The property has nearly an acre of developable land.

“The Doral area is a very attractive area. Developable land in the heart of an office complex was very attractive to this buyer group,” said Oscar Rivera, a shareholder with Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, who along with associate David Halberstein represented buyer Doral Costa Capital LLC.

“These buildings are anchored by a significant and well-established group of tenants,” Rivera added. “It was a very solid investment for the buyer group.”

But completing the $73.75 million transaction with the seller, an affiliate of Boston-based TA Associates Realty, required fast work.

dbr logo-thumb-240x45-55816“It was essentially two months from contract to closing with less than 30 days for due diligence,” Halberstein said.

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I am proud to be participating in the International Council of Shopping Centers (ICSC) RECon event, which will be taking place at the Las Vegas Convention Center & Westgate Hotel May 22-25, 2016.  This four-day educational program is the largest retail real estate exhibition and conference in the world, with more than 36,000 industry executives, retailers, financial companies, and product and service suppliers in attendance each year.

On Tuesday, May 24, I will be presenting the session titled “The Economics of a Lease: Developers and Retailers Perspectives,” which will cover the strategies and tactics of negotiating monetary provisions, including minimum and percentage rent clauses, security deposits, operating costs, real estate taxes and T/I payments.  icsclogo2015Participants will be led through an analysis of key elements of each of the lease provisions.  The session is scheduled to take place from 9 to 10:30 a.m.  Click here for additional program details.

Founded in 1957, ICSC is the global trade association of the shopping center industry with more than 60,000 members in the U.S., Canada and over 90 other countries.

 

The firm’s David Halberstein was quoted this week in reports by the Daily Business Review, South Florida Business Journal and The Real Deal about his work together with partner Oscar Rivera in representing Doral Costa Capital LLC (an affiliate of Aventura-based Triarch Investment Group Inc.) in its acquisition of three Doral office buildings for $73.75 million (approximately $259 per sq. ft.)

The buildings in the 17.8-acre Doral Costa office park house such major national tenants as Allstate Corp., HSBC Bank and Samsung, and they are approximately 96 percent leased.  They comprise a three-floor, 132,704-square-foot building at 9800 NW 41st St.; a four-story, 133,117-square-foot property at 9850 NW 41st St.; and a three-floor, 19,739-square-foot building at 4090 NW 97th Ave.  Two of the buildings were completed in 2001 and the third in 2006.  The site also includes about 0.8 of an acre of vacant land.

In a statement about the acquisition to a reporter, David wrote:

DavidHalberstein1-200x300“There was not a lot of time for due diligence with this transaction. It was essentially two months from contract to closing, less than a month of which was set aside for due diligence, and because we were financing a portion of this transaction there were a great deal of requirements that needed to be satisfied within the short time frame.

Adding to the challenges was the fact that some of the tenants have build-outs of their spaces currently in progress, so there were notices of commencement and other issues that needed to be dealt with prior to the closing. Fortunately, Oscar Rivera and I had the luxury of working with a brilliant group of people on this deal, so we were all able to pull together to clear all of the hurdles and cross the finish line.

We were dealing with a very tight window of time, which is becoming increasingly common these days for large commercial real estate transactions, especially in South Florida, so the deal is emblematic of the importance of a thorough yet expedited due diligence process.”

Our firm congratulates David on being featured in the media coverage of this major real estate acquisition.  Click here to read these reports in the Daily Business Review (registration required), South Florida Business Journal and The Real Deal.

dbrlogosouth-florida-business-journalRDeal

 

 

 

 

 

I am proud to be participating in the International Council of Shopping Centers (ICSC) University of Shopping Centers event, which will be taking place on the campus of the Wharton School at the University of Pennsylvania on March 7-9, 2016.  This three-day educational program will enable attendees to gain a higher level of knowledge of the retail real estate industry by learning directly from experienced professionals.

On Tuesday, March 8, I will lead the course titled “Economics of a Lease: Developers and Retailers Perspectives,” which will cover the strategies and tactics of negotiating monetary provisions, including minimum and percentage rent clauses, security deposits, operating costs, real estate taxes and merchants/marketing fund payments. The course is scheduled to take place from 2 to 5 p.m. Please click here for additional program details.icsclogo2015

Founded in 1957, ICSC is the global trade association of the shopping center industry with more than 60,000 members in the U.S., Canada and over 90 other countries.