Recent Court Rulings Favor Condo Buyers Over Developers

Is the economy influencing the Courts? It seems that the trend has shifted from rulings in favor of condominium developers to rulings in favor of  purchasers and more lawsuits on the behalf of buyers are being filed in Courts throughout Florida.  Attorneys have come up with creative arguments against developers in an attempt to cancel contracts and obtain return of initial deposits, or at least portions of those deposits. As reported in the Wall Street Journal and other news sources, just over six  (6) months ago the U.S. District Court in Miami dismissed several lawsuits brought against the developer of the Opera Tower Condominium, ruling that the buyers could not rely upon the marketing materials associated with the project. However in the last two (2) months rulings have agreed with claims made by purchasers.  Just recently the Eleventh Circuit Court of Appeals upheld a ruling against the developer of the Lake Buena Vista Resort as a result of completing the project a mere five (5) days after the deadline promised in contracts with purchasers. The buyers were entitled to receive their deposits back, in spite of the developer’s claim the delay was beyond its control.  Attorneys for buyers predict similar rulings in the future. In December,  2008, the Fourth District Court of Appeal upheld a ruling requiring the developer to return deposits on contracts concerning the 200 East Palmetto Park  building.  The Court found that the project did not qualify for exemptions to the Interstate Land Sales Full Disclosure Act (often referred to as “ILSA”), regardless of an advisory opinion from the Department of Housing and Urban Development (HUD) that was relied upon by the developer. Unoccupied and unfinished condominium projects are likely to remain prevalent in Florida for the time being, creating opportunities for new investors and home buyers.  However, filing claims against the entire property and including lenders in these types of lawsuits complicates financing for potential purchasers and may impact continued operation and maintenance of the properties. Please return to this site for periodic updates regarding these issues.

Court RulingsDepartment of Housing and Urban DevelopmentILSAReturn of Condo Deposit