Last week I was honored to serve as one of the co-leaders of a workshop titled “I Think That? Unconscious Bias: How to Spot It and Become an Inclusive Leader” at the International Council of Shopping Centers annual US Shopping Center Law Conference in Orlando, Fla. The highly interactive workshop focused on biases that are […]
Co-tenancy clauses allow key retail tenants a reduction in rent if other key tenants or a certain number of other tenants leave a center. While not common for smaller retailers, they are more common for anchor tenants. Anchor stores and other key tenants draw significant traffic to centers, and they are often among the primary reasons other tenants select their location.
With all of the challenges plaguing some retailers, including store closings by such major national retailers as Macy’s, K-Mart, Sears, Sports Authority, Kohls and Toys-R-Us, landlords could face significant losses when their remaining tenants demand rent reductions based on their co-tenancy clauses.
Typical ongoing co-tenancy clause requirements state that if one or more specified co-tenants are no longer open and operating, the landlord has a set timeframe (typically 90 to 180 days) during which it must secure one or more comparable replacement tenants. If it fails to do so, the remaining tenants with ongoing co-tenancy clauses will pay alternate rent amounts until replacement tenants are operating. Ultimately, if no replacements are found for periods typically ranging from 12 to 18 months, the remaining tenants may have the right to terminate their leases.
The firm’s Susan C. Odess authored an article that appeared as a “My View” guest column in the Business Monday weekly supplement of today’s Miami Herald. The article, which is titled “Clients Must Use Insurer’s Contractor or Face $10k Cap,” focuses on a new rule from Citizen’s Property Insurance that limits claim payouts to $10,000 unless policyholders agree to use the insurer’s preselected contractors. The article reads:
Beginning in February, Citizens will be able to force commercial and residential property policyholders who file claims for all non-weather water losses to use the company’s preapproved contractor or agree to limit their total payout to $10,000. This arbitrary figure is artificially low, as many claims involving water losses often cost much more to repair.
It is no surprise that Citizens and other insurance carriers would seek to impose such a measure in order to keep their claim payouts as low as possible. By forcing policyholders to use carrier-preferred contractors, insurers would be able to negotiate deeply discounted rates from their selected vendors, which will always be incentivized to acquiesce to the insurance companies in order to maintain their preferred status.
Property owners with damages in excess of $10,000 will be unable to vet and select the contractor of their choice unless they are willing to pay the additional expenses. Those who have relationships with companies in the construction field will be unable to turn to their most trusted sources unless they agree to the $10,000 cap.
For the policyholders, the fact that the insurance company and the contractor’s goals for keeping costs as low as possible would be completely aligned will create a significant conflict of interest between them and the contractor. This naturally leads to issues involving shoddy work and construction, which could easily leave property owners with no other recourse but to resort to litigation.
Partner John Catalano, who joined the law firm earlier this summer, authored an article that appeared in today’s Miami Herald as a “My View” guest column in the newspaper’s “Business Monday” special section. The article, which was titled “New Florida Law Helps Businesses Protect Against Frivolous ADA Lawsuits,” focuses on important legislative changes aimed at enabling Florida businesses to diminish their potential exposure to ADA barrier-to-access lawsuits. John’s article reads:
Despite its net positive effect on the lives of millions of Floridians and visitors to the state, an unintended consequence [of the Americans with Disabilities Act] has been the proliferation of frivolous lawsuits aimed primarily at racking up attorney and expert-witness fees against Florida businesses and property owners.
These lawsuits are sometimes filed by lawyers who recruit clients to blanket entire city blocks of businesses with demand letters posing an ultimatum to either pay a quick settlement or face the threat of an ADA lawsuit. There are even allegations that some lawyers are using Google Earth to view sites without ever having a client actually visit them.
Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A. achieved a significant milestone this year, celebrating 40 years of providing quality legal service to the South Florida, Florida and national communities. As we enter the fifth decade together, we are thankful for the relationships which we have built here in our backyard and beyond. It’s because of these relationships — and the trust we have earned—that we’ve continued to grow and flourish over the years. As we look back at where we have been, we are excited about where we are headed.
We take pride in the personalized professionalism we offer our clients. We will continue to mentor and expand our team to ensure we offer that same level of service as our younger attorneys transition into new leadership roles. To commemorate our journey, we produced a short film explaining our plan to perpetuate our legacy throughout the 21st Century. Because we’ll still be here—you can trust us on that.
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):
- 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.
- 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).
Steven 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.
It 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.”
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.
Firm 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.
Sebo 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.
The 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.
It 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.
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.
The 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.