0
Residential Construction Defect

Residential and Commercial Construction Defects

The population growth in Central Florida in recent years has had major implications for the real estate market.  There has been a surge of commercial and residential real estate construction for single family housing, multi-family units and commercial businesses, bringing with it a myriad of possibilities for construction defects and subsequent litigation.  Construction defects are deficiencies in the building process which can result in costly damage to the property or can put the inhabitants of the property at risk for personal injury.  A construction defect can be a serious issue or it can be a matter of just not meeting the buyer’s expectations.  Lawsuits for construction defects can be a lengthy and costly process and multiple parties can be held liable for damages.  Restitution may include the costs of repairs, property devaluation, loss of use, court costs and attorney fees. In some cases there can be fines for gross negligence paid to the state and suspension of professional licenses.  A plaintiff can file a negligence claim if there were personal injuries as a direct result of the construction defect.  For negotiation, mediation and litigation of claims, a knowledgeable attorney is invaluable on your path to a successful resolution.  Attorney Benjamin Shane Boutty has been representing clients in construction and business law, for over 20 years.  He is well versed in all aspects of construction defect law, as he is a state certified contractor as well as a construction law attorney, a professor and has owned several construction companies.

What Constitutes a Construction Defect?

   Construction defects can be the result of design deficiencies, workmanship issues or material defects and often, they are a combination of all the following;

  • A design deficiency is the failing of the architects and engineers to follow State of Florida building codes in the design of a project, usually occurring by error or omission. An example may be a poorly designed roof that causes leaks and mold damage.
  • Workmanship issues can be either aesthetic concerns or they can be a structural integrity problems. An aesthetic issue can usually be repaired quite easily, whereas a structural integrity problem may not be easily seen until major damage has occurred, such as cracks in the foundation of the building or unstable load bearing walls.
  • Material deficiencies are defects that arise due to damaged materials or inferior products delivered by the manufacturer or the contractor using improper building materials.  Examples can be inferior dry wall that cracks, roofing shingles that leak or faulty electrical wiring that can result in a fire.

   Patent defects in a building are ones that are obvious upon inspection. Latent defects in construction are those that are not easily seen, which are usually more damaging and problematic. In the State of Florida, the statute of limitations for patent construction defects is four years after the defect is discovered, or ten years for latent construction defects.

Be Proactive in Communication and Documentation to Minimize Liability

   To prevent and mitigate construction defect liability, it is important for those professionals in the construction industry to be proactive by having a quality control measure in place.  This requires frequent and diligent review of plans and site assessments.  Frequently inspecting the project and keeping detailed records of the construction progress is needed evidence in the event of future litigation. Home buyers are entitled to a builder’s warranty with the purchase contract which establishes the buyer’s rights and protections.

   The Boutty Law Firm, in Winter Park, Florida, represents both plaintiffs and defendants in a wide range of construction defect disputes.  Our clients are property owners, material suppliers, architects, home owner associations, general contractors, developers and construction companies. If you are the owner of a property that is claiming damages or a business owner that is being named in a lawsuit, we can negotiate or mediate your dispute for an effective solution or be your advocate in court. Call the Boutty Law Firm for a consultation to discuss your unique situation.

0
Commercial Property Lease Agreement

Consider these Factors Before Signing a Commercial Real Estate Lease

   For entrepreneurs or experienced business owners seeking to rent a commercial space such as an office, industrial property or a retail store, it is essential to understand the negotiations that are necessary before signing a lease agreement. 

A lease agreement between a landlord and a tenant, for the purpose of doing business, is more complex than a residential rental agreement.  It is in the best interest of a potential tenant or a commercial property owner to have the lease agreement reviewed by an experienced commercial real estate attorney, to determine if the terms of the contract will be suitable for the needs of the business. 

Some of the terms that are required in a binding commercial lease are the initial rent and future rent increases, the duration of the agreement, the security deposit, improvements to the property and if they are completed by the tenant or the landlord.  Other terms include the ability for the tenant to sublet space, the placement of signs due to zoning ordinances and landlord preference, an exclusive clause to prevent the landlord from leasing another unit to a competitor and compliance issues related to the Americans with Disabilities Act.

The leasing contract needs to address the renewal terms, in the event that the tenant wishes to stay in the current location after the expiration date of the lease.  Federal law requires that if a unit was built prior to 1978, it is mandated that the landlord include a disclosure statement if there is the possibility that lead paint may be present in the unit.  A radon gas disclosure is required, if radon gas levels have been found on the premises above the levels of federal and state guidelines.  A commercial lease should document how the lease can be terminated, in the event the tenant is unable to stay full term. 

It is important to know if the tenant can sublet the space, in part or in its entirety. There are circumstances whereas the tenant closes the business or wishes an alternate location and the lease needs to specify if it can be transferred to another. Commercial leases are offered on the basis of rentable square footage instead of usable square footage.  This means that in a shared building, the tenant pays not only for the square footage you are able to use, but also for a portion of the common areas. An example of shared spaces includes the hallways, restrooms, elevators, stairwells, storage areas and lobbies. 

   There are various types of lease agreements that can be negotiated for entering a rental arrangement with a commercial entity. A gross lease typically is an agreement that the tenant pays a monthly amount that is inclusive of all expenses regarding the property, such as the property taxes, insurance, maintenance and utilities.  This is a set fee that gives the tenant an expectation of exactly what their monthly expenses will be.  Other types of agreements are triple net leases, double net leases, single net leases and modified gross leases.   Each variation allows for different calculations of payment for the expenses of the property, divided between the landlord and the tenant.

   Starting a business is an exhilarating experience, however commercial leasing contracts must be handled proactively in the negotiation phase to minimize or prevent future litigation issues.  The Boutty Law Firm has extensive experience in all real estate matters. We can counsel and represent you in the initial phase of a rental agreement or with disputes that can result from the tenant or landlord’s breach of the lease, terminating lease agreements, constructive eviction and delinquency in rent eviction proceedings.  If you are a commercial property owner or a tenant, let the Boutty Law Firm handle your diverse business needs.

0
Real Estate Listing and Contract

Real Estate Contracts and Disputes

In the selling or purchasing of property, there are emotional aspects that factor into the decision making process for the buyer or the seller.  When a homeowner is selling a house and property, they may be grieving years of memories being left behind.  A buyer may be excited about a particular neighborhood and anxious about the scarcity of homes there. Part of the work of a real estate agent is to help clients through the process.  The first step in buying or selling, is to find a real estate agent that can help you confidently navigate a home purchase or sale, one that listens to your concerns and knows the market.   The listing agreement is the contract that contains the terms by which a real estate agent can market a property. A valid listing agreement includes information, such as the start and end date of the listing, the  price of the home, the agent’s compensation, any monetary co-agreements with other real estate agents and the circumstances by which the contract can be terminated. 

   There are several types of listing agreements and they are all legally binding documents.  An example of these includes an open listing, which allows for multiple real estate agents to compete for the sale of a property.  It is the lowest level of commitment to an agent, as even the seller may bring in a buyer and do all the marketing. An open listing arrangement offers the seller flexibility and the benefit of multiple agents.

   A one time show agreement is a commission contract signed between a real estate agent representing a buyer and a home owner.  The agent can bring only one or a limited number of potential buyers to see the property, as agreed upon with the seller, and receives a commission only if a sale occurs with one of those buyers. This contract is useful in “for sale by owner” properties, as the real estate agent only represents the buyer wishing to see a particular home.

   An exclusive right to sell is the most commonly used listing agreement. It specifies a real estate agent that will receive commission on the sale of the home, regardless if the home is sold through the efforts of someone else. It allows the agent or brokerage, full and total control over the transaction, including marketing the home, listing on multiple listing services and closing the deal.

      Many real estate listing agreements are signed by sellers without fully understanding the provisions in the contract, resulting in disputes. It is important to be proactive and seek the advice and counsel of a real estate attorney prior to signing an agreement.  If a dispute occurs, it can be resolved through negotiations in mediation, arbitration or litigation.  Some of the common disputes occur due to breach of contract, when one party fails to follow the terms and conditions of the contract.  This may occur if the buyer fails to obtain adequate financing before the closing date or if they fail to go through with the purchase due to other circumstances. Or if the seller wants to back out after the contract is signed, it is a breach of contract.  Breach of duty occurs if the real estate agent acts in such a way that is detrimental to his client. A real estate agent is a proxy for his client and therefore has a fiduciary duty to represent his client’s best interest.  He must disclose all the facts in an open and honest manner to the client. Some of the ways they may breach the fiduciary duty are receiving fees not disclosed to the client, failure to inform a seller of offers made on the property, failure to advise a buyer of any defects on the property or acting as a dual representative to both seller and buyer, without their knowledge.  Another alleged claim in a real estate dispute can be the result of an express and implied warranty breach. These terms relate to the quality of the product and they are inclusive of a warranty to ensure a clear title to a property. In new home sales, the warranty guarantees that the house will not have any major defects that render it inhabitable and that the contractor has an obligation to repair any of the work that has been performed.

    A real estate purchase is a major financial and emotional journey that can be stressful and unpredictable.  The Boutty Law Firm has extensive knowledge in both residential and commercial real estate law. If you are a buyer, seller, construction professional or real estate agent with a legal issue, we can be an advocate for your rights under the law. Protect your investment and call us for a consultation today.   

0
Home protection against hurricane damages

How to Dispute Insurance Coverage after Hurricane Damages

Hurricane Damages and Insurance Coverage

  During the months of June through November, we are immersed in a media blitz about storms and damages.  The State of Florida, which is surrounded by the Atlantic Ocean and the Gulf of Mexico, has a coastline of 8,436 miles, all of which are at high risk during a hurricane. Even those that don’t live on the coastline suffer heavy wind and water damages.  The report of a tropical storm or a hurricane brewing brings heightened anxiety levels and there can be immeasurable emotional wreckage following the storm. The history of hurricanes, such as hurricane Irma, hurricane Michael and the recent hurricane Dorian, caused devastating damages, for which there is major economic loss that may never be recovered. 

   The standard preparation for responsible homeowners and business owners, when a storm is approaching, is to do their best to secure loose items and trim or remove weak tree branches, especially around electric lines.  Creating a home inventory and reviewing your insurance coverage is imperative, if you need to claim damages.  Taking photos of your property prior to the storm, will adequately document the condition of your possessions.  When torrential rain, high tides or wind causes significant damages to your property, the results can be devastating.  Property owners are left to deal with roof and shingle damages, broken windows, flooding, moisture damages, destroyed porches, fallen trees and destruction of boats and other property.  Homes can be completely destroyed and become inhabitable.

   Insurance policies give us a false sense of security but insurance companies have an incentive to pay out as little as possible.  Your insurance policy is a contract between the insurer and the policyholder, in exchange for premiums.  This document determines the claims which the insurer is legally required to pay.  Following an event, an insurance adjuster will write a report of his subjective assessment of the damages.  This can result in a low estimate or a denial of the claim in total.  Some reasons that an insurance company will deny a claim or they may not pay for the damages in their entirety can be; policy exclusions, a missed payment can lapse your policy, coverage limit is reached but it’s not enough to cover damages, no documentation of damages, flood insurance needs to be a separate policy and/or pre-existing damage,   

   In addition to legitimate disputes between property owners and insurance companies, there are also a large number of questionable claims that need to be investigated and oftentimes, litigated in a civil court of law. While trying to deal with the trauma of your losses, insurance companies and property owners need to be aware of unscrupulous contractors that exploit customers during the confusion of a disaster.  Be wary of Assignment of Benefits fraud, which happens when you sign a deal that gives your contractor the right to bill your insurance company directly.

   The Boutty law firm will look out for your best interest and advocate on your behalf in a breach of contract dispute. You may be the property owner that feels your insurance company is unlawfully refusing to pay or you may be the insurance company that is disputing what appears to be a fraudulent claim. Or perhaps it is necessary to file for civil litigation regarding an untrustworthy contractor.  To learn more about how we can help you during this stressful time, schedule an appointment to discuss the details of your case.

0

Is Sole Proprietorship the Right Business Structure for You?

You have a skill or a service to provide and now is the best time for you to start a business of your own.  Having done some research on the various types of business structures has left you with more questions than answers.  The most common forms of business entities are a sole proprietorship, a corporation, a limited liability company or a partnership. A sole proprietorship is basically an individual running an unincorporated business.  It is an attractive option for you, as you have limited assets for start up money and wish to endeavor into entrepreneurship as a sole owner.  It is a business structure that is used by many freelancers, consultants, contractors and home based businesses.  There is minimal record keeping required, as it is not formally incorporated with a state filing. It has flexibility, as it is not restricted by a formal business structure. That means there are no annual meetings, board meetings and the owner can make all the business decisions independently. Without having employees, there is no concern about group health insurance, workers’ compensation coverage and the like.  But is it really the right option?

   A sole proprietorship is a legal enterprise, whereas one person represents the company legally and fully. It is the most common business entity, however with it comes many legal, financial and business risks. That said, you have unlimited liability for the debts of the business. For example, a lawsuit from a creditor or a customer, for business related debts, injuries or insufficient service can put you into personal bankruptcy. In a sole proprietorship, taxes are filed with your personal taxes and an estimated tax amount is sent to the Internal Revenue Service quarterly.  In the event of an Internal Revenue audit, by co-mingling your business and personal taxes, you will be audited for both.   Another aspect of being a sole proprietor is that you are in charge of every detail of the business.  This includes, but is not limited to, marketing, financing strategy, leadership, providing customer service and actually doing the work. This may sound appealing, but in actuality, it can be a daunting task.   Even in a small business, this usually means long hours for work which can result in physical and mental exhaustion. Or if illness or injury is incurred, this could be the reason your business has failed.   Business loans are generally not available to sole proprietorships.  Most owners use personal funds, personal loans or credit cards which can come with high interest rates.  It is difficult to raise cash to grow the business, although there are some options such as crowd funding, angel investors and business grants.

The Boutty Law Firm understands the complicated world of business law and can provide guidance in choosing an appropriate business entity for your organization. There are pros and cons for each one and it is crucial that you make the right choice.  The Boutty Law team can assist with necessary county and state licenses, zoning and permits that are needed for many business operations.  Every business is unique and you need to be well informed about the legal ramifications of choosing the right or the wrong business structure.  Call today for an appointment.   

1 2 3 4
×