Insurance and Taxes
Developer Faces Class Action, Lawyer Says, “Just Two Years Ago, People Were Waiting in Line”
Under a purchase agreement, developers for the 337-unit Two Midtown Miami in the Wynwood neighborhood just north of downtown Miami agreed to “substantially complete construction” no later than two years after purchasers signed the contracts in May and June 2004.
Now a class action lawsuit been filed which contends units were not substantially completed within two years, as required in the contracts. According to this July 12, 2007 article by the Miami Herald, the developer’s law firm, Greenberg Traurig, responded with letters that said the two years is subject to legally defendable delays – in this case general construction delays in South Florida and materials and labor shortages.
An increasing number of buyers nationwide, many in South Florida and the Gulf Coast, are scrutinizing contracts to see if they can get out of deals as the residential market cools. Law firms are gearing up teams of attorneys to deal with the litigation.
“It is a growing problem that I expect will persist for at least the next three years,” said Jack McCabe, CEO of Deerfield Beach-based McCabe Research & Consulting. “It will be interesting to see if the courts will rule that delays in materials or shortages of labor rank like hurricanes as an act of God for developers who have run over their contractual two-year construction deadline.”
chlesinger said the current craze over canceling condo contracts is a byproduct of “a miscalculation of the Miami boom.” According to the suit, pre-construction units sold within 48 hours in May 2004. About 700 people were on a waiting list for units.
Read Full Post | Make a Comment ( None so far )Home Resale Values Have Not Dropped in Orlando
Orlando, FL is showing evidence that the tail end of its real estate boom is arriving. It’s market is down as far as the number of houses that are selling and the amount of days required to go to contract, however, prices drops have not yet occured on home resales in established neighborhoods.
Meanwhile, this July 3rd article in the Orlando Sentinel reports that foreclosure rates in Lake county have quadrupled. Actually, the article reports a 24 percent increase in new home sales, but also comments that may not happen again anytime soon, even though prices are still rising on lakefront property.
Condos are expected to become most troubled Central Florida to area to watch. Quoting local property appraiser Bill Donegan, the article reports, “Next year, eight major condominium projects will come on line, but condo prices could suffer. The condo market is one that I think that you’re going to see somewhat of a price break because so many were bought by investors,” Donegan said. “People said: ‘I’ll buy it and flip it tomorrow.’ So many of them bought it and they can’t flip it.”
Overall the news for Central Florida underscored a trend that began in about 2005, when high insurance and unbridled property taxes curbed buyers’ appetite for coastal properties.
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