Real Estate Purchase/Sale Contract Disclosures- Court says HIRE A LAWYER

Recently, the 5th District Court of Appeal (DCA) ruled (decision here) on a case involving non-disclosure issues in the context of the purchase and sale of residential real estate.

The buyer and seller executed 2 $1 million contract for purchase of lots in a development.  After the closing, Billington brought suit claiming that he was induced to enter into the contract via misrepresentations.  He alleged misrepresentations regarding his ability to construct boat docks on the lots as well as the price of other lots sold to other buyers.

The trial court dismissed Billington’s lawsuit.  The court found that these contracts contained clauses that contradicted the lawsuit.

14. BROKER AGENCY DISCLOSURE; COMMISSIONS; DISCLAIMER OF REPRESENTATIONS. . . . . NOTE: BEFORE BUYER SIGNS THE CONTRACT, BUYER SHOULD READ IT CAREFULLY AND IS FREE TO CONSULT AN ATTORNEY OF BUYER’S CHOICE. . . . . 1 See infra for a discussion of some of the conflicting interpretations of Oceanic Villas. 3

c. Buyer understands and acknowledges that the salespersons representing Seller in connection with this transaction do not have authority to make any statements, promises or representations in conflict with or in addition to the information contained in this Contract and the Community Documents, and Seller and Broker hereby specifically disclaim any responsibility for any such statements, promises or representations. By execution of this Contract, Buyer acknowledges that Buyer has not relied upon such statements, promises or representations, if any, and waives any rights or claims arising from any such statements, promises or representations. . . . .

ANY CURRENT OR PRIOR UNDERSTANDINGS, STATEMENTS, REPRESENTATIONS, AND AGREEMENTS, ORAL OR WRITTEN, INCLUDING, BUT NOT LIMITED TO, RENDERINGS OR REPRESENTATIONS CONTAINED IN BROCHURES, ADVERTISING OR SALES MATERIALS AND ORAL STATEMENTS OF SALES REPRESENTATIVES, IF NOT SPECIFICALLY EXPRESSED IN THIS CONTRACT OR IN THE COMMUNITY DOCUMENTS, ARE VOID AND HAVE NO EFFECT. BUYER ACKNOWLEDGES AND AGREES THAT BUYER HAS NOT RELIED ON ANY SUCH ITEMS.

The appellate court found that there were such “non-reliance clauses” and waiver clauses in law that were enforceable as such here; despite Billington’s claims of fraud and that these clauses did not negate the fraud.

The 5th DCA found that one could not sign  contract stating that he would not rely upon seller’s statements are representations, and then claim that seller misled him.  After all, public policy strongly favors the enforcement of contracts, and the law presumes that parties to a contract has read it and understood its contents.

The main take-away from the court in stating: “contracting parties can protect themselves against such fraudulent practices by respecting the gravity inherent in the contracting process and carefully reviewing a contract to ensure that material representations are expressed in the instrument,” is to HIRE A LAWYER when signing any contract including one to purchase real estate.  Do not rely on what seller or realtors say either as they cannot give you legal advice or protect your interests.

If You Owe an Unpaid Debt Contact Us FIRST.

Yahoo News featured a good article this past Friday May 20, 2016 on debt collection here;  a hot topic lately.

Some of these debt collectors engage in shady tactics and illegal threats to collect these debts from consumers; especially re-sold debts to third party collectors.   Creditors will even lie to you that if you make a payment today that it is the fastest way to get the debt off of your credit report; which cannot be further from the truth.  Once a legitimate debt appears on your credit report, it will remain there for at least seven years, whether it’s paid in full or not.  All this does is restart the statute of limitations allowing them to sue you on a possibly barred claim!

As soon as you are contacted about an unpaid debt your first call should be to an attorney; and DO NOT speak to the creditor as anything you say could be used against you.

We first make sure that the debt really belongs to you.  We then examine the documents to ensure that the creditor has a right to collect the debt and it is not a “zombie debt” beyond the statute of limitations; or time to sue.  If it is outside of this period, then we may be able to get the case completely dismissed and the creditor to pay you back all of your costs and attorney’s fees.  We suggest that you DO NOT pay the creditor ANY money until consulting with an attorney first.

If you do not recognize the debt, you have 30 days per federal law to send a written correspondence that you dispute the validity of the debt and the creditor MUST respond with evidence that the debt is yours.

You should also record dates and times that creditors contact you as well as any threats made as they could be Fair Debt Collection Practices Act (FDCPA) violations.

Contact us TODAY for your FREE consultation!

Lesson to HOA Boards- Dont Run Up Your Costs and Attorney’s Fees in a Foreclosure Case When the Foreclosing Bank Obtains Title at Sale!!

Recently, the 3rd District Court of Appeal (“3rd DCA”) rules against a homeowner’s association (HOA) seeking costs and attorney’s fees in addition to the statutory amounts it received after a foreclosure.  Opinion here.

Generally, after a foreclosure sale occurs, and the bank is the winning bidder (ONLY when the bank wins title), there are outstanding HOA assessments due as well. Who pays those? Well the Florida Legislature crafted a statute, Section 720.3085(2)(c) to remedy this. This Section, also referred to as the “Safe Harbor Provision” states:

(c) Notwithstanding anything to the contrary contained in this section, the liability of a first mortgagee, or its successor or assignee as a subsequent holder of the first mortgage who acquires title to a parcel by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due before the mortgagee’s acquisition of title, shall be the lesser of:

1. The parcel’s unpaid common expenses and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or

2. One percent of the original mortgage debt.

In plain English, this says that if the bank takes title, it is only liable to the HOA for the 12 months of regular or special assessments prior to taking title, or 1% of the original mortgage price, whichever is less; typically the 12 months unless it was a very small mortgage.

The 2 HOAs in this appeal argued the same Section of the statutes “required them to apply any payments received from [the mortgagee] first to late charges and interest, and then to costs and attorney’s fees incurred in collection, and only then to assessments.”

The 3rd DCA found that if the legislature wanted the Safe Harbor Provision to include attorney’s fees and costs the language of the Section would say so.  The court said that “‘unpaid common expenses and regular periodic or special assessments’ does not include amounts for attorney’s fees, costs, and interest. … Given the unambiguous language of the statute, we must conclude that if the Legislature intended to include attorney’s fees, costs, interest, or other charges as part of the first mortgagee’s liability, it would have included any one or more of those items in the safe harbor provision.”

The 3rd DCA thus rules against the HOAs.

In practice, this means that the HOA is likely out thousands in costs chasing the foreclosure in state court and on appeal; as well as paying the bank’s lawyers fees as prevailing party on appeal.  This is likely in excess of the 12 months the bank had to pay the HOA.

This is a good lesson for HOA boards to take what the law provides and don’t chase parties in bank foreclosures hoping to get paid.   Start your foreclosure EARLY; as previously discussed here the foreclosure MUST be filed before the bank files theirs or else the association’s is barred.