Florida Real Estate - boyerlawfirmblog.com

Commercial Real Estate Transactions: Tips to Prevent Disputes

Here at Boyer Law Firm, we have represented brokers, agents, and purchasers of commercial property. It is common to have disagreements over real estate negotiations because disagreeing is part of the bargaining process. Sometimes the buyer disagrees about the purchase price with the seller. The other time, sellers disagree about whether they owe a broker a commission if the deal never closes. If the disagreement is material, then sometimes court action is appropriate to resolve disputes. Regardless of the disagreement, however, many of these issues could have been fixed before they happened.

Listed below are a few tips for ensuring a smooth transaction.

Get Everything in Writing

The number one mistake that clients make is not getting every aspect of the agreement in writing. It is essential to reduce all the terms of the agreement to writing specifically in the contract. Although the opposing party may insist on taking their word, you must get everything in writing and have them sign all documents. If you do not have a signed writing it will be a lot more difficult to enforce the term you would like to enforce. There are potential avenues to getting orally spoken terms into court as evidence to modify an existing contract; however, courts are reluctant to do so and it will be much easier to include the term in writing.

2. All Communications are likely Admissible in Court

Furthermore, many clients make the mistake of sending emails, texts, or voice messages without thinking twice about how it may affect them during litigation. Angry and bold texts may work against you in front of a jury if admissible as evidence during a trial. As a general rule, you should be hesitant to send anything that could hurt your case in court. Similarly, you should save any emails or texts that you receive in regard to a real estate transaction.

3. Make Sure Your Contract is Enforceable

You should consult an attorney if you have questions about the enforceability of your contract. Whether you are a listing agent, a seller, or a buyer, you should always have an experienced professional review any and all documents. Consulting an attorney before contract creation will significantly reduce the risks of future litigation arising from your real estate deal. Here at Boyer Law Firm, we have experienced attorneys who look forward to working with you. Please contact us today!

Commercial Real Estate & Foreign Investment

Commercial real estate can be a valuable investment which can provide good returns. Different types of owners can purchase Florida commercial real estate. Such owners include individuals, partners, married couples, LLCs, corporations and other types of businesses. If you are purchasing a property in Florida to rent out or to use for your business, then it may be a good idea to setup a Florida LLC or corporation in order to purchase the property. There are various advantages and disadvantages to doing so; however, regardless of the transaction the most important aspect of a real estate transaction is the drafting of the agreement.

The Foreign Investment in Real Property Tax Act & Potential Liability

If you are purchasing a Florida property, then it is important to know if the seller is a foreign seller. This is important because if you are a buyer purchasing a property from a foreign seller, then you will most likely be subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA).

In a FIRPTA real estate transaction, 10% of the sales price is withheld from the sellers’ proceeds by the IRS until their tax return is filed the following year. The reason behind FIRPTA is to ensure the foreign seller pays the taxes on the proceeds for the property. Before the enactment of FIRPTA, the federal government had no procedure to ensure payment of these taxes. This is because many foreign sellers of real estate had no further connections to the US other than their property.

It is ultimately the buyer’s responsibility to ensure proper conduct of the FIRPTA real estate transaction. If the buyer does not properly conduct the FIRPTA process, then the buyer may be liable for the unpaid taxes.

A licensed attorney can be very beneficial to any real estate transaction. Whether it is during the negotiation period or the executory period, an experienced attorney can significantly reduce the risks associated with purchasing commercial property. Please contact us if you have any questions regarding the purchase or sale of commercial property. We look forward to assisting you.

Protecting Your Contract with Contractors

Whenever you remodel or renovate your home, you likely will hire a contractor. A contractor is a person or company that signs a contract to provide materials or labor to perform a service. People use contractors for housing renovations, building construction, and other important services. Although we hope that your experience was exceptional, issues often arise when jobs are not completed by their contract date.

First, it is most important to make sure that you are hiring a licensed Florida contractor. Your home is one of the most important investments that you make in your entire life. Because of the increase in unlicensed contractors, you should always make sure to verify their license. This will protect you and your home. You can read more about avoiding scams in the construction industry here.

Second, if you need a job completed on time, you must make sure that it is in your contract. Most completion date issues start from the creation of the contract itself. It will be much more difficult to enforce a deadline for contracts that lack a “time is of the essence clause.”

A “time-is-of-the-essence” clause is necessary if you want to enforce a deadline.

Imagine you enter a services contract with a licensed Florida contractor. The contractor agrees to lay tile in your kitchen and install a new shower in your master bedroom. The contractor agrees to complete the job within 3 months. You agree to pay $20,000 at the end of the job (including labor and materials).

Is the contractor liable for a material breach of contract if after 3 months the contractor has not finished the job?

The answer likely depends on whether you had an express “time is of the essence” clause in your contract.

The contract should state an express condition of your payment that the contract must complete the project by the contract date. In addition, the contract should expressly state the completion date. Then, if the contractor fails to complete the work by the stated deadline, then that failure likely constitutes a material breach.

A material breach opens to the door to many potential remedies for you. For example, you may be entitled to hire another contractor to complete the work and reduce payment to the original contractor accordingly. You may also be able to sue the original contractor for consequential damages, like any foreseeable loss of income or additional expenses incurred because of the breach.

If you have concerns regarding your current or prospective contract with a contractor please contact us. Our experienced attorneys look forward to assisting you.

3 Reasons to Consult an Attorney for Florida Commercial Rentals

Florida commercial rental properties can be a lucrative primary or secondary source of income. Although rental properties can be very profitable, they require sound strategies to maximize their effectiveness. Not only should you consider the market for your rental property, you should also consider legal issues that could impair your profitability. Listed below are a few issues regarding commercial real estate that likely can be prevented if you consult an attorney.

1) Complexities of the Leasing Agreement

Leasing agreements can be very complex. Likewise, it is important to have a properly drafted leasing agreement. Leasing agreements protect both landlords and tenants. Because leasing agreements are contracts, they are subject to both contract and property law. Courts will construe poorly drafted leasing agreement against the drafter, which could potentially ruin profits for issues arising out of a poorly drafted leasing agreement.

In addition, courts recognize implied warranties regardless of their presence in the leasing agreement. Implied warranties are warranties that the court will always recognize because they protect both lessors and lessees. Court generally do not require these warranties to physically be in the lease.

2) Title Issues

Furthermore, if you or your broker did not perform a diligent title search when purchasing your property, you may be responsible for certain title defects in your deed. Easements, mortgages, and liens are just a few examples of encumbrances on property that can negatively affect title. For example, if your property is the servient parcel of an easement that was recorded in a public record that you or your broker did not discover during the executory period of the land-sale contract, your property may still be subject to that easement. This could mean that the easement holder could potentially continue using the easement on your property potentially subjecting you to litigation from a lessee for the breach of the covenant of quiet enjoyment.

3) Avoiding Mortgage Foreclosure

In addition, if you purchased property subject to a mortgage, (i.e. you purchased the property from a previous interest holder who did not satisfy their own mortgage on the property), a bank may foreclose on your property even though you make your payments on your own mortgage.

Our experienced attorneys have the knowledge to properly draft leasing agreements and assist you in any real estate transaction. If you have questions regarding any commercial property concerns that you may have please contact us.

Remedies for Breach of Land Sale Contract

When a party breaches a contract for the sale of a home or a lot, the non-breaching party is entitled to certain remedies for breach of land sale contract, including damages. In this case, damages would be the difference between the contract price and the market value of the land on the date of the breach, plus any incidental costs.

An example of an incidental cost to the buyer would be rent payments made elsewhere while waiting to move. For the seller, it might be the cost of utilities or any accruing taxes.

To obtain specific performance, a plaintiff must show (1) that a contract exists, (2) that the plaintiff has performed or is ready, willing, and able to perform, (3) that the legal remedy is inadequate, (4) that enforcement is feasible, and (5) that there are no defenses available to the defendant.

The issue with seeking specific performance is usually in proving the third element, that the legal remedy is inadequate. Generally, the legal remedy is inadequate when an item for sale is unique.

Because land is always unique, specific performance is an available remedy. Specific performance here would be the forced sale of a home. So the court would essential force the buyer to transfer funds to the seller or force the seller to transfer possession of the premises to the buyer.

Real estates sales contracts usually require the buyer to deposit “earnest money” into an account with the seller. They also frequently provide that if the buyer defaults in performance and fails to make payments, the seller may retain the earnest money as liquidated damages.

Liquidated damages must be agreed to in a contract and cannot be punitive in nature. Courts generally uphold the seller’s retention of the earnest money if the amount appears to be reasonable in light of the seller’s anticipated and actual damages.

If you have any questions about your contracts or would like to discuss the sale of property, contact one of our experienced Florida business law attorneys today.