The Closing Agent https://theclosingagent.com Your Real Estate Closing Solution Tue, 18 Apr 2017 14:35:57 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.4 The Lis Pendens: Form, Definition, and Effect: https://theclosingagent.com/lis-pendens-form-definition-effect/ https://theclosingagent.com/lis-pendens-form-definition-effect/#respond Tue, 18 Apr 2017 14:15:59 +0000 https://theclosingagent.com/?p=2501 The Lis Pendens: Form, Definition, and Effect:  By: Barry L. Miller, Esq. Offices Orlando. Many real estate agents with clients going through the foreclosure process have come across a document known as a Lis Pendens. But what exactly is a...

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The Lis Pendens: Form, Definition, and Effect: 

By: Barry L. Miller, Esq. Offices Orlando.

Many real estate agents with clients going through the foreclosure process have come across a document known as a Lis Pendens. But what exactly is a lis pendens? What does it do? Does it adversely affect a pending transaction or sale?

In essence, a lis pendens translates to “pending litigation.” The lis pendens, when recorded in the public records where the property lies, serves as notice to the world at large that the particular property is facing legal action surrounding or otherwise encompassing the subject property. Typically, you will encounter a lis pendens in regards to foreclosure properties, properties engaged in partition or eminent domain proceedings, or in other actions which affect the title to a particular parcel.

The purpose of the lis pendens is to protect the interests of unidentified third-parties from being bound by an adverse judgment otherwise affecting the title to the property. For instance, suppose Owner A files suit against Owner B for partition (an action to force the sale or division of real estate) as a result of a dispute between Owners A and B. Owner B lists his 50% interest in the property for sale around this time. Potential Purchaser C will notice the lis pendens in a title search and thereby have actual notice that the property is subject to litigation.  In the event Potential Purchaser C takes title to the property during the pendency of the Partition action, C’s interest will be taken subject to the judgment rendered in lawsuit. Which means, C could be forced to sell his newly acquired interest, or risk losing a portion of the property by division.

Therefore, under Florida Law, a party acquiring an interest in a property subject to a lis pendens takes that property subject to the interests of the party filing the lis pendens, as determined by court order in that particular lawsuit.

We recommend that a title search be performed prior to or immediately after entering into a contract for sale so that a buyer knows the “state’ of the property.  Not only will the search reveal a lis pendens but also show other judgments, liens and encumbrances on the property.

Be cautious when proceeding to acquire an interest in a property subject to a pending court action. If you are interested in acquiring such a property, contact the Law Offices of Barry L. Miller for a free consultation at 407-423-1700 or via email at info@BarryMillerLaw.com so we may review the circumstances and legal repercussions of the purchase.

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TERMINATION OF HOMEOWNER’S COVENANTS AND RESTRICTIONS. https://theclosingagent.com/termination-homeowners-covenants-restrictions/ https://theclosingagent.com/termination-homeowners-covenants-restrictions/#respond Mon, 20 Mar 2017 20:02:10 +0000 https://theclosingagent.com/?p=2411 TERMINATION OF HOMEOWNER’S COVENANTS AND RESTRICTIONS By: Barry L. Miller, Esq., Offices Orlando. A stark percentage of the population of Florida fall subject to restrictive covenants—though many of such people do not know it, much less know what a restrictive...

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TERMINATION OF HOMEOWNER’S COVENANTS AND RESTRICTIONS

By: Barry L. Miller, Esq., Offices Orlando.

A stark percentage of the population of Florida fall subject to restrictive covenants—though many of such people do not know it, much less know what a restrictive covenant is. A restrictive covenant is a condition, based upon contract, between a grantor and grantee of real property which restricts the grantee’s use and/or occupancy of the land typically for the purpose of maintaining or enhancing the value of adjacent lands by controlling the nature and use of surrounding lands.

Typical examples of restrictive covenants include Covenants, Conditions and Restrictions, the documents which form a Homeowner’s Association, and Condominium Declarations, the documents which form a Condominium Association.

These restrictions; however, are not absolute and can be terminated by courts, or by operation of law, as the case may have it, by various means including abandonment of the covenant, waiver, acquiescence, or change in circumstances.

As to the first of these contentions, a restrictive covenant may be terminated by law as a result of abandonment. This particular theory is typically used as a defense by a homeowner in an action by a particular authority, such as a homeowner’s association, to enforce the covenant at issue. Generally, for a restrictive covenant to be deemed abandoned the person asserting the defense must prove that the covenant has been violated so frequently, and so extensively that a reasonable person would deem the covenant to have been abandoned. For example, consider Subdivision A in which exists a restrictive covenant stating that all homes in Subdivision A must have a red roof. In an action to enforce the red roof provision against Homeowner B, Homeowner B provides proof that 70 out of the 100 homes in the subdivision has a non-red roof. Similarly, Homeowner B provides proof that of those 70 homeowners, 68 painted their roof a non-red color over 5 years ago and that no actions to enforce the red rood provision, nor any fines levied, until the suit by the homeowner’s association against Homeowner B. A court would likely determine that the violations are so wide-spread, that any actions to enforce the covenant are nearly non-existent, and, as a result, the covenant requiring a red rood has effectively been abandoned. As the Florida Supreme Court noted in Stephl v. Moore, “[l]ong-continuted abandonment or acquiescence in violation of restrictive covenant…may forfeit the right to enforce it….”

Another method by which real covenants are terminated is by acquiescence, which is similar to abandonment. Acquiescence to a breach of a restrictive covenant may result in a waiver to enforce the covenant against a particular homeowner in that a continued breach of the covenant and the failure of others subject to the covenant to enforce it may constitute consent to the breach thereof. For example, in Woodlands Civic Ass’n, Inc. v. Darrow, Florida’s Fifth District Court of Appeal concluded that a voluntary homeowners’ association and individual property owners had acquiesced to a property owner’s use of a residential-only plot of land when it was demonstrated that the former property owner marketed the sale of the premises as commercial land for three (3) years, operated a business out of the property, and made renovations to the property to allow for commercial use.  Woodlands Civic Ass’n, Inc. v. Darrow 765 So. 2d 874 (Fla. Dist. Ct. App. 5th Dist. 2000).

Lastly, Restrictive Covenants may be terminated by a change of circumstances. That is to say that the enforcement of the particular covenant would be unreasonable or oppressive as a result of changed circumstances in the neighborhood. To this end, courts and juries will look to the original purpose of the covenant to determine whether or not the intent of the covenant could reasonably be enforced. Say for example, Subdivision A has a real covenant which states that “no home in Subdivision A can be sold for less than $1,000,000.00.” Suppose further that, after a downturn in the real estate market that the homes in Subdivision A only could reasonably sell for $400,000.00 and that no prudent buyer would pay anywhere near $1,000,000.00 for a property in Subdivision A. A court would likely find that the covenant is ineffective due a resulting change of circumstances. More particular, the purpose of the covenant was likely to maintain property value by disallowing sales below a certain threshold; however, after all the homes fell in price anyway, homeowner’s would essentially be unable to sell their homes due to the covenant thus making it oppressive and unreasonable.

Barry L. Miller, P.A. is familiar with all aspects of restrictive covenants, if you, or anyone you know has questions regarding the legal status of any covenant, please call our offices at 407-423-1700 or email us at  info@BarryMillerLaw.com for a free consultation.

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The Closing Agent: A Look at the New Breed of Title Insurance Companies https://theclosingagent.com/closing-agent-look-new-breed-title-insurance-companies/ https://theclosingagent.com/closing-agent-look-new-breed-title-insurance-companies/#respond Mon, 20 Mar 2017 18:54:15 +0000 https://theclosingagent.com/?p=2405 Insurance is an industry with a long history, without much variation. This is particularly true of title insurance, where your rate is the same regardless of provider. Each title company charges a closing fee, but that’s the only financial variable....

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Insurance is an industry with a long history, without much variation. This is particularly true of title insurance, where your rate is the same regardless of provider. Each title company charges a closing fee, but that’s the only financial variable. If you do your homework when choosing a title company (and many people don’t), it comes down to 3 things: the quality of services, the client experience, and the level of expertise.

Continue Reading at www.Updater.com

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FR-BAR Contract Revision Webinar 3/17/2017 https://theclosingagent.com/fr-bar-contract-revision-webinar-3172017/ https://theclosingagent.com/fr-bar-contract-revision-webinar-3172017/#respond Fri, 17 Mar 2017 18:47:57 +0000 https://theclosingagent.com/?p=2341 The post FR-BAR Contract Revision Webinar 3/17/2017 appeared first on The Closing Agent.

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Employees at The Closing Agent Attend RamQuest User Group annual conference https://theclosingagent.com/employees-closing-agent-attend-ramquest-user-group-annual-conference/ https://theclosingagent.com/employees-closing-agent-attend-ramquest-user-group-annual-conference/#respond Mon, 06 Mar 2017 23:37:00 +0000 https://theclosingagent.com/?p=2151 This week,  TCA (The Closing Agent)  employees are attending the Annual RQUG (RamQuest User Group) Users Conference in St. Petersburg, Fla.  RamQuest provides various solutions for the Title Industry and this conference brings together users of their products from around...

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This week,  TCA (The Closing Agent)  employees are attending the Annual RQUG (RamQuest User Group) Users Conference in St. Petersburg, Fla.  RamQuest provides various solutions for the Title Industry and this conference brings together users of their products from around the country to compare ideas and discuss creative opportunities with their colleagues.

The leadership team at The Closing Agent (TCA) believes an employee’s performance is only as good as the investment made by the company into their continuing education and professional growth.That’s why employees attending conferences and other educational events is so important to TCA President Barry L. Miller and his senior management staff.

The event will feature a keynote address by well-known motivational speaker Steve Gilliland whose Sirius/XM radio show focuses on leadership, achieving success and personal fulfillment.

According to Barry L. Miller, president of The Closing Agent, these kinds of professional growth seminars and conferences provide new insights for his employees.

“At The Closing Agent, we’ve made the business decision to make an investment into each of our employees,” said Miller.  “Our growth starts with quality employees who are knowledgeable about the title industry and are given every opportunity to grow and succeed.” To learn more about how The Closing Agent can help you grow your business contact us at https://theclosingagent.com/

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Homeowner’s Associations and Condominium Association Fines and Restrictions: https://theclosingagent.com/homeowners-associations-fines-restrictions/ https://theclosingagent.com/homeowners-associations-fines-restrictions/#respond Wed, 01 Mar 2017 20:43:51 +0000 https://theclosingagent.com/?p=2147 Homeowner’s Associations and Condo Association Fines and Restrictions: By: T. Matthew Ladyman, Esq. of Barry L. Miller, P.A. Offices Orlando In Florida, Homeowner’s Association’s (“HOA”) and Condominium Owner’s Associations (“COA”) have certain powers and restrictions. There are powers and restrictions...

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Homeowner’s Associations and Condo Association Fines and Restrictions:

By: T. Matthew Ladyman, Esq. of Barry L. Miller, P.A. Offices Orlando

In Florida, Homeowner’s Association’s (“HOA”) and Condominium Owner’s Associations (“COA”) have certain powers and restrictions. There are powers and restrictions that owners in these associations should be aware of.

HOAs:

For relevant law in Florida regarding HOAs, Chapter 720 of the Florida Statutes governs. A Homeowner’s Association may levy certain fines as defined in the HOA documents such as the Bylaws, Declaration, etc. An association may promulgate certain rules and regulations as well.  Associations typically use fining to enforce rules and regulations and other mandates of the association. It is important to note, however, that there are limits to the fines any association may levy. A fine may not exceed $100.00 per violation against any member or any member’s tenant, guest, or invitee to comply with any provision of the declaration or rule or regulation of the HOA. A fine may be levied for EACH DAY of a continuing violation provided that the association has given at least one notice to the offender (homeowner) and an opportunity for a hearing. The notice must be sent fourteen (14) days prior to the imposition of any fine. Fines, generally, may not exceed $1,000.00 for any single violation. HOWEVER, the statute does allow this limit to be increased if a different limit is provided for in the association’s governing documents. And a fine of less than $1,000.00 may not become a lien against the parcel. So, if an owner is fined more than $1,000.00, the association could lien the parcel. Again though, fines above $1,000.00 would have to be specifically provided for in the HOA documents.

An association also has the power to suspend owner’s or member’s rights to common areas and facilities for a reasonable period of time for any violation of its rules and regulations, bylaws, or declaration or nonpayment of fees or fines that go unpaid for a period of more than ninety (90) days. An association may also suspend the voting rights of any owner or member for non-payment of fees or fines if the fee or fine has gone unpaid for more than ninety (90) days.

COAs

Condominium Owner’s Associations are governed similarly but are subject to a different Florida Statute, Chapter 718. This Chapter is more restrictive. An association may levy reasonable fines, but they may never become liens on the property. COAs are limited to fines of $100.00 a day per violation and a strict limit of $1,000.00 in the aggregate for any single violation. A COA may not dictate a higher fine in its governing documents as an HOA can. Similarly, owners and members must be given a single notice and an opportunity for hearing fourteen (14) days before the imposition of any fine.

Similarly, COAs may also suspend owner’s or member’s rights to common areas and facilities for any violation of association bylaws or rules and regulations and for failure to pay fees or fines for more than 90 days as seen with HOAs.

If you need legal advice concerning an ongoing, or potential problem with your homeowner’s or condominium owner’s association or have questions regarding the applicable Florida Law, please call us at 407-423-1700 to schedule a free consultation.

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Conditions for Contracting: A Review of Contract Formation https://theclosingagent.com/conditions-contracting-review-contract-formation/ https://theclosingagent.com/conditions-contracting-review-contract-formation/#comments Thu, 16 Feb 2017 18:10:14 +0000 https://theclosingagent.com/?p=2144 Conditions for Contracting: A Review of Contract Formation             By: Barry L. Miller, Esq. Offices Orlando.             Contracts are pervasive in civilized society. Nearly everywhere you look there is a contractual obligation hanging in the air—though you may not notice...

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Conditions for Contracting: A Review of Contract Formation

            By: Barry L. Miller, Esq. Offices Orlando.

            Contracts are pervasive in civilized society. Nearly everywhere you look there is a contractual obligation hanging in the air—though you may not notice it. Every time you purchase a bagel from a local coffee shop, you’re entering into a contract. Every time you hire a babysitter so you and your significant other can spent a night out on the town, you’re creating a contract. It is easy to form contractual obligations without truly understanding the process. Therefore, this post aims to instruct its reader on the basic nature of contracts and their formation.

A contract is defined as “a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” [1] Therefore, a contract is formed by the manifestation of three requisite elements, each being explored in more depth below, they being: an offer to contract, an acceptance of such an offer, and consideration. [2]

What is an offer exactly? Most would likely assume that an offer is a simply statement of an intent to give a product or service to another person; however, this is not always the case. A valid offer, generally must present, on the part of the offeror (the person making the offer), “a manifestation of willingness to enter into a bargain, so made as to justify another person to” accept the terms of the offer.[3] Generally, an offer must: (1) address the party to whom the offer is being made, (2) contain the terms of the offer with certainty—that is to say, a reasonable person would understand what exactly would constitute a breach of the contract—[4] and must give the offeree the belief that they are empowered to “close the contract.” [5] To illustrate this concept, please see the following two examples below:

  • A (to B): I will buy your Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

This is an offer as it provides the necessary terms, with certainty, and manifests A’s intention to be bound by contractual obligation.

 

  • A (to B): Will you sell me your Mitsubishi Galant, VIN Number XYSS1142351 for $10,000.00?

This is not an offer. Namely, A does not manifest an intention to be bound contractually, he is merely inquiring about B’s intentions rather than setting forth his own.

 

Similarly, it is helpful to note that offers are revocable by the Offeror prior the acceptance thereof by the offeree. An offer may be termination by revocation (by the Offeror, as aforesaid)[6], rejection or counteroffer by the Offeree (as below discussed),[7] lapse of time (generally deemed to be a reasonable time).[8] After the termination of an offer by any of the aforementioned means, an Offeree is powerless to accept the terms of the offer. [9]

Logically, an Acceptance must follow an offer in order to form a contract at law. An acceptance is the means by which the minds of two parties are brought to an agreement.[10] An acceptance must exactly mirror the terms of the offer—this is the mirror-image rule.[11] This means, that any material variation from the terms of the offer constitutes a counteroffer rather than an acceptance, as illustrated below.

  • A (to B): I will buy your Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

B (to A): I will sell you my Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

This is an acceptance, under the mirror-image rule, as the terms of the acceptance “mirror” the terms of the offer.

  • A (to B): I will buy your Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

 

B (to A): I will sell you my Mitsubishi Galant, VIN Number: XYSS1142351 for $10,500.00.

 

This is not an acceptance, and therefore there is no contract, as B has altered the terms of the offer itself. This then constitutes a counteroffer which empowers A with the ability to accept and form a contract.

Moreover, in order for an acceptance to be valid it must be made according to the terms of the offer.[12] That is to say, that if an offer contains a term such as “mail your acceptance hereof by writing to 11 N. Summerlin Ave., Ste: 100, Orlando, Florida,” then a telephone call cannot stand as an acceptance to the offer. As aforesaid, the acceptance must be made in the manner contemplated by the offer itself.[13]

            The last requirement for contractual formation is consideration. Consideration is “some right, interest profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other.” [14] Consideration is a promise, an act other than a promise, a forbearance, or the creation modification, or destruction of a legal relationship; that is to say, something of value must be exchanged.[15] This concept is illustrated below:

  • A (to B): I will buy your Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

B (to A): I will sell you my Mitsubishi Galant, VIN Number: XYSS1142351 for $10,000.00.

In keeping with our continuing example, in the above there is a valuable consideration. The consideration in this matter is A’s promise to sell the Galant to B, and B’s promise to pay A $10,000.00 for the Galant. We therefore, have a valid contract for the sale and purchase of the Galant.

  • A (to B): I will pay you $5,000.00 if you stop smoking cigarettes for 5 months.

 

The consideration in the instant matter is A’s promise to pay B $5,000.00 if B discontinues smoking for 5 months. Similarly, B’s consideration is forbearing his legal right to smoke. Therefore, if B stops smoking for 5 months, there is an acceptance, by performance, and B is entitled to $5,000.00 from A.

 

            The foregoing is a very general overview of the nature of contractual formation. Contract formation is an incredibly specialized area of law and this document should not be used an alternative to procuring valuable legal advice from an attorney licensed to practice law in your jurisdiction. Barry L. Miller, P.A. is knowledgeable in the areas of contracts and is able to assist you in your creating, reviewing or terminating your contractual obligations. Call us today for a free consultation at 407-423-1700 or email Christian@BarryMillerLaw.com

 

 

 

[1] Restatement (Second) of Contracts § 1

[2] SCG Harbourwood, LLC d/b/a Harbourwood Health & Rehab Center v. Hanyan, 93. So.3d 1197 (Fla. 2d DCA 2012)

[3] Restatement (Second) of Contracts § 24

[4] Restatement (Second) of Contracts § 33

[5] Corbin, Offer and Acceptance, and some of The Resulting Legal Relations, 26 Yale. L.J. 169, 181–82 (1917).

[6] Donahue v. Davis, 68 So. 2d 163 (Fla. 1953).

[7] Webster Lumber Co. v. Lincoln, 94 Fla. 1097, 115 So. 498 (1927).

[8] Strong & Trowbridge Co. v. H. Baars & Co., 60 Fla. 253, 54 So. 92 (1910)

[9] State v. Watson, 971 So. 2d 946 (Fla. 3d DCA 2007).

[10] Bullock v. Harwick, 158 Fla. 834, 30 So. 2d 539 (1947).

[11] Knowling v. Manavoglu, 73 So. 3d 301 (Fla. 5th DCA 2011).

[12] Solutec Corp. v. Young & Lawrence Associates, Inc., 243 So. 2d 605 (Fla. 4th DCA 1971).

[13] Id.

[14] Fla. Jur.  2d Contracts § 72

[15] Id.

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CFPB Uncertainty https://theclosingagent.com/cfpb-uncertainty/ https://theclosingagent.com/cfpb-uncertainty/#respond Tue, 07 Feb 2017 20:04:25 +0000 https://theclosingagent.com/?p=2133 By: Rahul Parikh, Esq. Offices Orlando   In the wake of the 2007/2008 Financial Crisis and the following recession, Congress took to drafting one of the most comprehensive Wall Street reform bills ever crafted. Resultantly, in 2010, Congress passed the...

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By: Rahul Parikh, Esq. Offices Orlando

 

In the wake of the 2007/2008 Financial Crisis and the following recession, Congress took to drafting one of the most comprehensive Wall Street reform bills ever crafted. Resultantly, in 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among the Act’s provisions was a section which created a new government watchdog on independent markets, the Consumer Financial Protection Bureau, colloquially known as the CFPB.

The CFPB Bureau became effective on July 21, 2011.  In 2015, the CFPB began to make extensive changes to the Real Estate Settlement Procedures Act (“RESPA”) which was meant to protect homeowners by assisting them in becoming better educated while shopping for real estate services, and eliminating kickbacks and referral fees which add unnecessary costs to settlement services. The changes were extensive and dramatic.  The Loan Estimate  replaced the Good Faith Estimate and  the Truth in Lending (“TIL”) disclosure, while a new Closing Disclosure replaced the HUD-1 and final TIL disclosure. The new Closing Disclosure integrated components of both the RESPA and TIL disclosures in a format which the CFPB deemed to be more consumer-friendly. Although the changes brought on by the initial regulations shook the real estate industry; title companies, lenders, brokerage firms, and underwriters quickly adjusted to the onslaught of change, regulation, and massive amounts of paperwork.

With new leadership in Washington vowing to reduce regulation and challenges against CFPB arising in the court system, the future of the CFPB is again unclear. It will be wise to pay attention to any potential changes so that the industry can, yet again, adjust and thrive.

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Business Succession Planning https://theclosingagent.com/business-succession-planning/ https://theclosingagent.com/business-succession-planning/#respond Tue, 07 Feb 2017 20:01:54 +0000 https://theclosingagent.com/?p=2131 Business Succession Planning. By: Jon Innes, Esq. Offices Orlando   There are statistics that state a majority of Floridians do not have Last Will & Testaments, Durable Powers of Attorney, Health Care Surrogates, Living Wills and other critical estate planning...

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Business Succession Planning.

By: Jon Innes, Esq. Offices Orlando

 

There are statistics that state a majority of Floridians do not have Last Will & Testaments, Durable Powers of Attorney, Health Care Surrogates, Living Wills and other critical estate planning documents prepared.  There are many reasons people have given; however businesses, like families, should not be harmed by such delays. Like estate planning, business succession planning is something that many do not think about and deal with only as a last resort.  But also like estate planning, if a business plan is not established, the consequences to one’s loved ones could be extreme.

 

Unlike families, businesses should have these documents ready for such cases when the businesses are formed.  These documents may include simple bylaws, operating agreements and partnership agreements that clearly define what happens when certain circumstances occur.  These governing documents may also include slightly more complex shareholder and member agreements that address other contingencies and circumstances that may or may not occur, such as when a business partner divorces his spouse. Like a child, a business needs oversight and supervision, and therefore proper protection should be addressed in the governing documents.

 

As we have witnessed, the livelihood of a business may change for many different reasons, including, but not limited to, the retirement, death, divorce, or simply a change of heart of its owner, let alone the change of markets and customer whims.  Should something happen to a business owner or if there is a disagreement between the business partners, the once successful business itself may disappear.  Ultimately, one will have to wonder what will happen to the business’s employees, its clients who depended on the services and products formally offered, and the family and beneficiaries of the owner – all of whom depended on the success of the business.  Many businesses have collapsed when inexperienced family members inherited the stock of the corporation and expected to just reap the benefits, without knowing how to run the business.  Further, many business partners have abandoned their projects when they realized they now had to deal with the spouse or children of the former partner. A successful business succession plan can be set up to reduce or manage these issues.

 

A successful business succession plan reviews the various issues, the options available, and determines the best route for success.  It deals with contingencies of illness, disability, death, and the like. It finds appropriate successors of vacant positions. It ensures payment is given to the intended people without interfering with the business at hand.  A business succession plan may also encompass health care plans, life insurance, and retirement plans to create a package that deals with certain detrimental issues but also be useful for the enjoyment of the owner to help the business be financially stable and grow.

 

While many enjoy running a business and watch it succeed, one should still have an exit strategy for various circumstances in order for the activities to remain pleasurable and not an overwhelming event for the owner or his/her successor.  A good business succession plan may help the owners to worry less about the future and ensure they are willing to come back to the business. As the old adage goes, plan for the worst and hope for the best; this may allow one to actually sleep at night during these times of uncertainty.

 

 

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Options for Vesting Title and Partaking in Partition: A Brief Introduction to Florida’s Partition Laws. https://theclosingagent.com/options-vesting-title-partaking-partition-brief-introduction-floridas-partition-laws/ https://theclosingagent.com/options-vesting-title-partaking-partition-brief-introduction-floridas-partition-laws/#respond Tue, 07 Feb 2017 19:55:38 +0000 https://theclosingagent.com/?p=2126 By: Barry L. Miller, Esq. Offices Orlando.   As every mindful real estate agent should know, purchasers of real estate have various options afforded to them, by law, as to how they wish to take ownership of the property. When...

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By: Barry L. Miller, Esq. Offices Orlando.

 

As every mindful real estate agent should know, purchasers of real estate have various options afforded to them, by law, as to how they wish to take ownership of the property. When two or more purchasers of real property decide to purchase real property in the State of Florida, they may choose between three options with which to take title as cotenants or, in other words, concurrent ownership.

The first among such co-tenant relationships is called tenants in common. Tenants in common each enjoy a separate, and often-times different, fractional share of a particular parcel of real property.[1] Upon the death of one co-tenant, his or her fractional share is distributed to his or her heirs via a testamentary devise, such as a will, or by inheritance in accordance with Florida Probate Code when no will is present. [2]

Further, another such relationship is Joint Tenants with Rights of Survivorship (“JTWRS”). JTWRS enjoy a completely undivided (non-fractional) share of a particular piece of real property.[3] JTWRS differ from tenants in common in that, upon the death of one of the co-tenants, the decedent’s interest transfers not to their heirs, but to the other tenant automatically by operation of law,[4] thus avoiding the need for probate to transfer title.

Lastly, solely reserved to married couples in the State is the tenancy by the entirety relationship. Similarly to JTWRS, upon death of one spouse, the entire interest immediately transfers to the remaining spouse by operation of law, thus avoiding probate.[5] The added benefit of an entireties relationship is that the property held by both spouses is generally, subject to certain exceptions (such as IRS liens),[6] exempt from collection on accounts in which only one, singular spouse owes a debt. [7]

However, what happens when co-tenants discover they can no longer stand each other, or they no longer wish to be in business together, or want nothing to do with the other in regards to the property, or between parties who cannot agree as to terms of sale? The answer? Partition. A partition is a dissolution of the co-tenant interest between two or more separate tenants.[8]  There are essentially two ways to partition property in the State, by contract or agreement of the parties, or by judicial intervention. This post will focus exclusively on the latter.

Judicial partition requests a particular Circuit Court of the State to enter an order either, (1) geographically splitting the property into share proportional to one’s fractional share of ownership (Partition in Kind), or; (2) forcing the sale of a particular parcel of real property and then to distribute the proceeds of that sale equally between the co-tenants in accordance with their fractional share of ownership. [9] An important consideration to take into account is that a particular plaintiff filing a partition action, cannot seek the partition of only a portion of the land, the whole and entire property must be subject to the proceedings.[10] For example, if Co-tenant A and Co-tenant B decide they want to keep the western half of their property and partition the eastern half, because they have a disagreement as to how best to use the eastern half, the suit for partition will not stand because the entire property was not included.

It is a common observation alone that a parcel of real property, vacant land aside, cannot be split down the middle without causing a divestment to the value of the property itself or violate zoning ordinances. More specifically, if a parcel of land contains a home, a judge would likely not order the partition in kind of such a parcel as a home cannot be feasibly split into halves or thirds, as the situation demands.[11] Therefore in such situations, a court would likely order the forced sale of the property.

This may seem like a fairly simply procedure and process—it is not. Various considerations must be taken into account before one actively attempts to initiate a partition action. For example, what if there is a mortgage on the property? What if you only want to partition a portion of the property? What if one co-tenant has been paying maintenance expenses upon the property but the other has not? Generally, these considerations are case-specific and require experienced hands to fully complete the action. Therefore, it is always best to proceed with a licensed attorney in the event such a dispute arises.

Barry Miller Law is acutely familiar with partition actions. If you, or someone you know, is having a dispute with another co-tenant, call Barry Miller Law at 407-423-1700, or email us at Christian@BarryMillerLaw.com to schedule free consultation to evaluate your rights and options.

 

 

[1] 12 Fla. Jur. 2d,  Cotenancy and Partition § 2

[2] In Re Cleeves, 509 So. 2d 1256 (Fla. 2d DCA 1987).

[3] 12 Fla. Jur. 2d,  Cotenancy and Partition § 9

[4] D.A.D., Inc. v. Moring, 218 So. 2d 451 (Fla. 4th DCA 1969).

[5] Gerson v. Broward County Title Co., 116 So. 2d 455 (Fla. 2d DCA 1959).

[6] U.S. v. Ryals, 480 F.3d 1101 (11th Cir. 2007).

[7] S.E.C. v. Solow, 682 F. Supp. 2d 1312 (S.D. Fla. 2010).

[8] In re Estate of Hillyer, 664 So. 2d 361 (Fla. 4th DCA 1995).

[9] See generally, Carlsen v. Carlsen 346 So. 2d 132 (Fla. 2d DCA 1977) (examining partition in kind and partition by sale).

[10] Lovett v. Lovett, 112 So. 768 (Fla. 1927).

[11] Id.

The post Options for Vesting Title and Partaking in Partition: A Brief Introduction to Florida’s Partition Laws. appeared first on The Closing Agent.

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