Cataclysmic Ruling in Favor of Purchasers of New Construction Condominium Deposits Issued by Florida's Third DCA Entitling Buyers to Full Refund of their Escrow Despoits
CATACLYSMIC RULING IN FAVOR OF PURCHASERS OF NEW CONSTRUCTION CONDOMINIUM DEPOSITS ISSUED BY THIRD DCA ENTITLING CERTAIN BUYERS TO FULL REFUND OF THEIR ESCROW DEPOSITS
Miami, Florida – September 7, 2011 – Florida's Third District Court of Appeals rendered an opinion today in one of the most significant legal decisions in Florida related preconstruction condominium deposit recovery cases. Attorney Aaron Resnick, one of the first condominium deposit recovery attorneys in Florida, has referred to the ruling as “potentially cataclysmic” for developers. According to Resnick, the Third District Court of Appeals ruled that if a developer did not strictly comply with Florida Statute § 718.202 by failing to use two separate escrow accounts for a buyer's purchase deposits, then a buyer could recover their entire deposit as well as their attorneys' fees and costs from the developer. The decision involved two consolidated condominium deposit cases against North Carillon, LLC and First American Title Insurance Company.
The Court held that the title insurance company did not have liability to the purchasers even if they funds were held in violation of the statute. The United States District Court for the Southern District of Florida rendered a similar ruling in 2009, Double AA International Investment Group, Inc. v. Swire Pacific Holdings, Inc., 674 F. Supp. 2d. 1344 (S.D. Fla. 2009), aff'd in part, vacated in part, 637 F.3d 1169 (11th Cir. 2011). That ruling was adopted by the Third District Court of Appeals. After the Double AA ruling, the Florida Legislature, after heavy lobbying by condominium developers, amended Florida Statute § 718.202 with the intention of undermining the Double AA decision and to clarify the statute so that the two escrow account requirement was not mandatory under the law.
The Third District Court of Appeals ruled that this amendment could not be applied retroactively to impair a purchaser's statutory right to void the contract if the statute was not complied with. The Third District Court of Appeals specifically concluded that if it were applied retroactively it “would impermissibly impair each buyer's pre-amendment contract rights.”
Resnick notes that the developer in the case can still move for a rehearing of the decision and could attempt to appeal it to the Supreme Court of Florida. However, in the interim, Resnick articulated the law has shifted clearly in the favor of consumers on this issue and the doors may have been opened for persons who thought they had lost everything to seek full recovery of their deposits. As Resnick noted, “the Third District has ruled conclusively that buyers, pre the 2010 amendment, were entitled to have their first 10% deposit in an escrow account separate and distinct from the special escrow account for that buyer's ‘in excess of 10 percent'”.
Visit https://www.thefirmmiami.com or www.recovermydeposit.com today to receive information on the Law Offices of Aaron Resnick, P.A. and Recover My Deposit.
For more questions about this release please contact [email protected] or call 305.672.-7495.