Articles Posted in Sales and Acquisitions

The firm’s Oscar R. Rivera contributed a guest column that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the recent decision by the First District Court of Appeal in the case of Thomas I. Bowman v. Jon Michael Barker et al. His article reads:

. . . Bowman purchased a home from Barker that was later discovered to have numerous defects. He filed a lawsuit alleging that Barker failed to disclose known defects in the house contrary to his duty under the law and fraudulently misrepresented the condition of the house. The suit also included other defendants and claimed that they contributed to the problems and caused damages related to their roles in repairing, remodeling, inspecting and selling the house.

The defendants denied being aware of any defects in the property at the time of the sale and moved for summary judgment, which was granted by the circuit court.

In reversing the lower court’s decision to issue a summary judgment for the defendants, the First District Court of Appeal found that the home buyer had demonstrated the existence of facts and inferences that should have allowed the case to go to trial.

These included evidence that the home sellers were experienced real estate investors in other house-flipping projects, and they had knowledge of the extremely poor initial condition of the house. In fact, they admitted that it was in such bad condition that they were able to buy it for little more than the value of the land.

The defendants also admitted to knowing about the need for substantial repairs that included structural damage and a failing foundation, which was later estimated at more than $50,000 to repair, and about the existence of prior additions and unpermitted work.

The appellate panel found that this evidence raised questions of fact about the home sellers’ knowledge and also undermined their credibility and the plausibility of their denying knowledge of the defects and the necessary repairs.

Oscar’s article concludes:

The home sellers testified that the repairs had been completed prior to closing, but the appellate court found that there was evidence indicating that the main defendant had admitted to making several false representations on the property disclosure form, which he said was due to pressure from his Realtor and his dislike for completing those forms. The opinion also found that there were conflicting accounts of what representations he made about whether the repairs had been completed.

The evidence also revealed that the remodeling contractor has a different view of the instructions given and the scope of work. The company’s representative claimed that he and his business partner were never made aware of any structural issues, nor were they asked to repair them.

The court also ruled that the fact that the house was sold as is did not make summary judgment appropriate as the duty to disclose known defects continues to exist for a home sold as is. The opinion found:

Despite selling this house as is, the sellers had a duty to disclose what they knew about its condition, and they undertook to make disclosures to appellant about the condition of the house. The record demonstrates triable issues of fact about what that condition was, what the sellers knew about it, what disclosures were made and whether those disclosures were accurate.

Our firm congratulates Oscar for sharing his thoughts on this ruling and its positive implications for home buyers in Florida with the readers of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).

Firm partner Oscar R. Rivera wrote an article that appeared in today’s edition of the Daily Business Review, South Florida’s only business daily and official court newspaper, about the recent decision by the Third District Court of Appeal in the case of Blue Lagoon Development v. Maury and Leon Medical Centers. His article reads:

A recent appellate ruling found that the trial court erred in validating a buyer’s termination of its contract for the $23.6 million purchase of a commercial parcel due to the seller’s alleged failure to obtain a zoning change by the date specified in the agreement.

. . . Blue Lagoon executed a purchase and sale agreement in late 2007 for the sale of a large commercial real estate tract in Miami to Leon Medical Centers for approximately $23.6 million. One of the conditions in the agreement was that Blue Lagoon would obtain a change in zoning from RU-2 to BU-2 by July 31, 2008, but the agreement did not contain a “time is of the essence” provision.

A zoning hearing based on Blue Lagoon’s application was conducted on July 16, 2008, the Citizens Zoning and Appeals Board approved the application, and a resolution approving the zoning change was certified by a deputy clerk of the Miami-Dade County Department of Building and Zoning on July 23, 2008. The resolution was not appealed during the subsequent 14-day appeal period that expired on Aug. 4.

Leon Medical Centers, which had closed on another commercial parcel for the same intended use on July 11, 2008, for approximately $11 million less than it had agreed to pay for the Blue Lagoon site, sent a termination letter to Blue Lagoon on July 31 exercising its right to terminate the contract because it maintained that Blue Lagoon did not obtain the requisite zoning by July 31, given the possibility of an appeal after that date. The company moved forward with the construction of the medical facility that it originally planned for the Blue Lagoon site on the new parcel.

Oscar’s article concludes:

Based on the date in which Blue Lagoon secured the zoning change, which was prior to the July 31 deadline, the absence of express contract language requiring that any appeal period must expire before the “outside date” of July 31, and the absence of a “time is of the essence” clause in the agreement, the Third District Court of Appeal concluded that the property was rezoned from RU-2 to BU-2 as stipulated under the agreement and reversed the lower court ruling.

The appellate panel based its ruling in part on the opinion by the Fourth DCA in a 2012 decision finding that “the mere designation of a particular date for performance of such a condition does not make that date the essence of the contract; time is not of the essence, even in an agreement setting forth a specific date for performance, absent a showing that reasonable delay would have constituted a material breach or that the party entitled to performance suffered a significant injury due to the delay in performance.”

Our firm congratulates Oscar for sharing his insight on this new appellate decision with the readers of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).

The firm’s Oscar Rivera recently represented the owner and developer of the 220 Alhambra Circle office tower in the sale of the property for $75 million to Mercantil Commercebank, the building’s largest tenant. His critical role in this transaction, which was in the works for nearly three years, was the subject of the lead “Dealmakers” feature in today’s Daily Business Review.

The article reads:

Attorney Oscar Rivera, head of the real estate practice at Siegfried Rivera, represented the seller.

“It was a challenging transaction simply because the building was not for sale,” he said. “[Building owner] Joe [Kracauer] has a great attachment to that building. It is in a trophy corner on the main drag in Coral Gables, and he was quite proud of what he had accomplished. His son Benjamin was one of the architects in that project, so there was an emotional factor. He really didn’t want to sell. And it took a lot of convincing over the years.”

Once that hurdle was surmounted, the two sides had to negotiate the value of the building, which was something of a complicated proposition. The seller argued for a high price given the leases the building commanded. The buyer countered that, were the bank to relocate, the nearly empty building would immediately face depressed leasing rates.

“We went back and forth a number of times and a number of occasions, and all sorts of strategies and ideas were tossed about: buying part of the building, buying part of the building now and part later, selling the entity instead. I don’t think any idea in terms of how to structure it wasn’t discussed,” Rivera said.

Quote: “We looked at all different parts of permutation and in the end a straight sale was the best option. It went full circle,” Rivera said.

Our firm congratulates Oscar on his efforts in bringing this transaction to fruition and having it catch the attention of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).