Articles Posted in Real Estate Law

Recently, the Florida First District Court of Appeal ruled that a commercial real estate tenant has the right to continue its exclusivity provision in each of its lease options. In Amelia Island Restaurant II, Inc. v. Omni Amelia Island, LLC, the plaintiff operated and maintained a restaurant located at the Amelia Island Plantation in Nassau County, Florida. In 2012, the plaintiff and the property owner were unable to agree on the terms of a lease extension. The parties’ original lease agreement contained a provision prohibiting the landlord from allowing another full-service restaurant to operate in the same shopping center. The plaintiff argued that this exclusivity provision would remain in effect during a renewed lease term, while the landlord argued that it would not remain in effect.

The trial court ruled in favor of the landlord, holding that the exclusivity provision in the original lease would not carry over into the renewed lease agreement. In 2007, the Fourth District Court of Appeal decided Winn-Dixie Stores, Inc. v. Dolgencorp, 964 So.2d 261, 268, which held that Florida Statutes Section 543.335 required invalidation of an exclusivity provision in a lease agreement. Florida Statutes Section 542.335 establishes a rebuttable presumption that a covenant restricting competition for a period of six months is reasonable, and that a covenant restricting competition in excess of two years is unreasonable. If the restriction is determined to be overlong, overly broad, or unnecessary by the court, Setion 543.335 grants the court authority to modify the term to protect the affected party’s interests.

On appeal, the Court reversed the lower court’s ruling and found in favor of the plaintiff. In its opinion, the Court of Appeal first analyzed the provisions of the original lease agreement, which gave the plaintiff “an option to renew for a third five-year term in 2013, under certain conditions.” The conditions to renewal required the plaintiff to not be in default on any performance obligations under the lease, and to provide notice of its decision to renew according to the procedures provided in the lease. The Court of Appeal next distinguished the present case from Dolgencorp, finding that “where Dolgencorp involved an indefinite covenant running with the land, the Lease here effectively fixed the duration of the exclusivity provision with the [plaintiff] via the Lease’s initial five-year term and maximum of three potential renewal periods.”

Divorce can be a difficult process, even when the spouses agree on many potential points of contention. Having a dissolution of marriage agreement that addresses every important point can go a long way to make the process as painless as possible.

A recent divorce case on appeal before Florida’s Fifth District illustrates this point. While married, the spouses owned a home together, and at the time of the divorce the home was encumbered by a mortgage under both spouses’ names. The trial court ordered that the former husband keep the couple’s home and that the wife execute a quitclaim deed to him, which would give him full rights to the property. Unfortunately, the order did not address the wife’s mortgage obligation. This would mean that if the husband failed to pay the mortgage the mortgagee could hold the wife accountable.

Florida follows the rule of equitable distribution, rather than community property. This means that in the event of divorce, section 61.075 of the Florida Statutes mandates that the couple’s property is fairly or equitably distributed. The presumption is that the marital property will be split evenly between the parties, but the court may divide the property unevenly based on several factors, including each spouse’s financial situation. The goal is for a distribution that is ultimately fair.

Real estate contracts can be used in a wide variety of circumstances. It is of utmost importance to retain qualified legal counsel in drafting and litigating these types of contracts. The amount of money in dispute may be significant, and legal technicalities may act as a bar to recovery.

In Dutra v. Kaplan, the Third District Court of Appeal of Florida reviewed a trial court’s decision regarding a contract to purchase residential property. The plaintiff and defendant wished to purchase a house together and entered into a written contract to that effect. The contract included a provision detailing the disposition of the house should the parties no longer wish to live together. The contract provided that the plaintiff’s interest in the property would first be offered to the defendant. If the defendant elected to purchase the plaintiff’s interest in the residence, he was to repay any money the plaintiff had paid toward the purchase of the property. This repayment was to take place in a period of no more than five years.

Unsurprisingly, the parties decided two years later that they no longer wished to live together. The plaintiff moved out of the residence, and the defendant chose to purchase her interest in the house, per the parties’ agreement. However, the parties disagreed over the amount of money to which the plaintiff was entitled. The defendant asserted that he would not pay any money pursuant to the agreement if the plaintiff did not accept the amount he initially offered. Thereafter, he paid nothing to the plaintiff, while continuing to reside in the house.

Real estate sale and lease contracts can be extremely complicated, depending on the circumstances of the transaction. When large amounts of money are exchanged, and all the details of a real estate deal are taken into account, it is no surprise that disputes often arise in these situations. It is paramount to have a capable attorney who can draft, review, or negotiate a real estate contact on your behalf.

Even with a written contract, parties will frequently make oral changes or modifications. There are special rules when it comes to real estate contracts, however. In one case, the Florida Supreme Court has ruled that modifications made to a real estate contract weren’t enforceable unless they were made in writing and signed by the parties. Even if there was a verbal promise to the contrary, the parties were only bound to their written agreement.

This issue arose in DK Arena, Inc. v. EB Acquisitions I, LLC, a case involving a contract for the sale of property located in Florida. The parties entered into a contract to buy the property for the amount of $23 million. The real estate contract required a $1 million deposit to be deposited in escrow, and allowed the buyer to have 60 days to inspect the property and conduct due diligence. The contract also contained a provision stating that modifications to the contract were not enforceable unless they were in writing, signed and delivered.

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