Articles Posted in Construction Law

Stuart Sobel 2013Partner Stuart Sobel has authored a number of guest columns that have appeared in the Daily Business Review and the National Law Journal during the last several years, and his latest article published in the July 3 edition of the Daily Business Review is drawing considerable attention by the South Florida legal community.

Stuart’s column echoed the newspaper’s main article for its Litigation Special Report about the decline in trials, especially jury trials, and its impact in our judicial system. He wrote:

About 99.7 percent of cases are resolved without a jury trial. While this may be a testament to other means of resolution, it drastically shrinks the universe of opportunity for trial experience.

Now as a generation of lawyers matures without the cauldron of the courtroom within which to galvanize their skills, many of today’s attorneys seek desperately to avoid trial — exacerbating the loss of experience.

And since our judges are most often selected from our bar of attorneys, those lawyers without trial experience become judges without trial experience. Trials conducted by these judges will become less dependable as an effective means for dispute resolution.

Ultimately, this will intensify the public’s negative perception of our justice system in general, and it will undermine the public’s confidence in the reliability of a trial as the ultimate means of dispute resolution in particular. Scary.

Stuart concludes:

Can we control the out-of-control discovery and over-lawyering of cases before trial so that budgets are not exhausted and litigants can actually afford the risk of trial?

Hourly lawyers and lawyers wary of malpractice tend to over-lawyer cases until they get close to trial. Then they hedge their bet and begin to persuade clients that trials are just too risky.

Perhaps, if we look to our own practices, we can instead do only what is really necessary to prepare to present a case in trial — and then present it.

In the process, we save clients money, gain trial experience and restore faith in the system. Just a thought.

Stuart is receiving a great deal of positive feedback and comments from South Florida attorneys and judges on his article, and we hope that the sentiments that he expressed help to bring some added perspective and insight on this critical issue.

Click here to read Stuart’s complete article.

dbr logo.jpg

Jeffrey Respler srhl-law.jpgThe firm’s lawsuits alleging major construction defects against the developer, general contractor, architect and engineers behind Miami’s Quantum on the Bay condominium towers were the subject of an article by the Daily Business Review that appeared in the June 16, 2014, edition of the newspaper. The lawsuits allege that the defendants’ work resulted in hundreds of defects, including stucco and HVAC problems as well as inadequate drainage that has led to severe flooding in the community’s fitness center and loading dock.

Firm Partner Jeffrey S. Respler is quoted in the article indicating that “[t]he unit owners want to have the property that should have been delivered to them. At the end of the day, we’re not looking for a windfall. We’re only looking to be made whole.”

The lawsuit names as defendants developer Terra ADI-International Bayshore LLC, builder Facchina-McGaughan LLC, architect Nichols Brosch Wurst Wolfe & Associates Inc., contractor Fred McGilvray Inc., and engineers Florida Engineering Services Inc., VSN Engineering Inc., Gopman Consulting Engineers Inc. and John J. Kirlin LLC, a Maryland-based firm that specializes in plumbing, heating, ventilation and air conditioning.

“The biggest problem is whenever there’s even a minor rain event, there’s flooding,” explains Respler in the report. “Every single day, the association people have to go out and pump the drainage wells in this luxury development. If not, there’s flooding – even when there’s no rain.”

The article describes how sandbags are being used at the property to keep water out of a service area during storms, and residents have been forced to have repairs made to swamped elevators.

Respler concludes: “The parties who we know are responsible are pointing fingers at each other. We are just the end users. We weren’t there when it was being built. The bottom-line fix is we’re probably going to have to move the drains to the front of the property. The speculation is the building was built too low.”

Click here to read the complete article in the DBR’s website (registration required).

dbr logo.jpg

3rd-district-court-of-appeal-1In December, firm partners Helio De La Torre and Laura M. Manning-Hudson, together with of-counsel attorney H. Hugh McConnell, prevailed in their appeal on behalf of the developer of the 28-story Courvoisier Courts condominium tower on Miami’s Brickell Key before the Third District Court of Appeal. The appellate court found that the lower court erred when it entered a Final Judgment requiring the developer to relinquish to the association all of the parking spaces and storage areas that it assigned to an unsold penthouse prior to turning over control of the property to the association.

The appellate court’s decision in the case of Courvoisier Courts, LLC v. Courvoisier Courts Condominium Association, Inc. hinged on the association’s declaration of condominium, which states that the association would receive all parking spaces and storage areas that are left unassigned after the developer has sold all of its units. The panel found that the parking and storage spaces in question did not become the property of the association upon turnover, and the developer retained the right to assign the exclusive use of these limited common elements until such time as it had sold all of its units.

dbr logo.jpgA report on the ruling from the Daily Business Review on December 27, 2012 quoted De La Torre indicating that “The lower court ruling said basically that all of the assignments made since the turnover were invalid. [The appellate decision] means we get our parking spaces back, [and] it’s a very significant opinion.” He, Manning-Hudson and McConnell believe that the trial court’s interpretation of the condominium’s declaration in this case could have set a challenging precedent for condominium developers in Florida.

Click here to read the Third District Court of Appeal’s opinion for the case.

A recent appellate ruling has important ramifications for developers as they navigate the issues of the delivery of condominium units after the completion of construction.

In the case of Tranquil Harbour Development, LLC v. BBT, LLC,the developer obtained a certificate of occupancy for a condominium unit but did not record the declaration of condominium with a surveyor’s certificate of substantial completion until several months later. The contract for the sale of the unit in question contained a covenant that the developer would complete the unit within two years. However, the delay between the receipt of the certificate of occupancy and the recording of the declaration caused the developer to pass the two-year mark.

This delay proved to be very costly for the developer. When the buyer refused to close based on a breach of the covenant to deliver within two years, the developer argued that the date of the issuance of the certificate of occupancy should determine that it had met its obligation. firstdca.jpg Unfortunately for the developer, the First District Court of Appeal found that under Section 718.104, Florida Statutes, the surveyor’s certificate of substantial completion had to be recorded for the unit to be conveyed to a buyer. Until it was recorded, the unit was not eligible for delivery, and therefore the developer had not met its two-year delivery obligation.

With so many condominium unit sales being contested in the aftermath of the meltdown in the real estate market in South Florida, this case illustrates the importance for developers to work closely with experienced legal counsel to ensure that all of the required notices, certificates and documentation are filed and recorded on a timely basis in accordance with Florida law.

Florida’s lien law was revised this year to clarify the right of a contractor to lien the interest of a landlord when the landlord’s tenant contracts for improvements. Under the previous version of Section 713.10, Florida Statutes, a landlord was able to avoid having its real property interest liened if it followed certain recording requirements. If there was a concern with a particular lease, a landlord could record a short form of the respective lease. If the lease prohibited a lien attaching to the landlord’s interest, the landlord then would be protected. If the landlord was preparing to lease several spaces in one building, the landlord could record one notice covering the entire building. The landlord again would be protected so long as the specific lease language prohibiting liability was included in the notice and the landlord represented in the recorded notice that all leases at the property contained this prohibition.

Under the 2011 changes to the statute, the recording of the notice or short form of the lease must occur before a notice of commencement is recorded. If a contractor has any concerns that its lien would not be permitted, under the revised statute, the contractor may serve written demand on the landlord for a copy of the lease provision which prohibits the liening of the landlord’s interest. If the landlord does not provide the requested provision within thirty days, or if the landlord provides a false or fraudulent copy of the lease provision, it loses the statutory protection so long as the contractor has complied with the statute and has no actual notice that the landlord’s interest was not subject to lien.

4th DCA photo.jpgA recent Florida case before the Fourth District Court of Appeal highlights the protection afforded to a landlord who followed the recording requirements prior to the 2011 statutory revisions. In MHB Construction Services, L.L.C. v. RM-NA HB Waterway Shoppes, L.L.C., the landlord had properly recorded a notice prohibiting a lien against its interest. Two years later, the landlord entered into a lease with a tenant, who thereafter contracted for improvements to be made to the leased space. Before the contractor began work, the landlord recorded a notice of commencement.

The contractor argued that the recording of the notice of commencement nullified the landlord’s protection under the notice of lien prohibition. The court disagreed, finding that the purpose of the notice of commencement was to provide proper information of record so that the lienor could complete a notice to owner. The court also refuted the contractor’s arguments that a lien could attach to the landlord’s interest because the tenant improvements were required and funded by the landlord. The court noted that not only did the lease not require the improvements, but it required the tenant to obtain the landlord’s consent before any improvements were made. In addition, although the landlord contributed a tenant improvement allowance toward the cost of construction, the allowance was less than ten percent of the entire construction budget and was contingent on the tenant obtaining a final release of lien from the contractor. Given these facts and the recorded notice of lien prohibition, the court determined that the contractor could not lien the landlord’s interest. For the general contractor’s perspective on this decision, click here to read Nicholas Siegfried’s article on the significance of the ruling in our construction law blog.

If you own a property against which you recorded a notice of lien prohibition prior to the 2011 statutory revisions, at least one jurisdiction has recognized that you remain protected under the statute. Our real estate and construction lawyers work closely with our clients to enable them to protect their properties against improper liens and claims, and we encourage commercial real estate owners and managers to contact us with any questions regarding the safeguarding of their properties.