|By Marketwired .||
|February 3, 2014 12:19 PM EST||
MIAMI, FL--(Marketwired - February 03, 2014) - On January 23, 2014, the Florida Supreme Court issued a significant ruling for real estate developers and escrow agents. This decision overturned the Third District Court of Appeal's ruling regarding preconstruction condominium escrow accounting requirements and affirmed the trial court's dismissal of the original claims. The Court's ruling is an important win for developers statewide.
The decision resolves two consolidated cases filed by preconstruction buyers against North Carillon, LLC, which developed the condominium project commonly known as Canyon Ranch Living, Miami Beach. In both cases, the buyers claimed that preconstruction deposits -- of up to 10% and in excess of 10% of each contract's purchase price -- were unlawfully maintained in one escrow bank account, rather than being deposited into two separate escrow bank accounts.
Two law firms, Rennert Vogel Mandler and Rodriguez P.A. and White & Case LLP, collaborated to persuade the Florida Supreme Court in its 6-1 decision that Florida law does not require maintenance of separate escrow bank accounts for the deposits of preconstruction buyers.
To underscore the historic nature of its ruling, for the first time, the Florida Supreme Court applied the rule of lenity in a civil case in favor of North Carillon.
Jason Block, of Rennert Vogel Mandler and Rodriguez, was pleased that the Florida Supreme Court overwhelmingly agreed with the position consistently held by his client throughout this case. Raoul Cantero, of White & Case LLP and from 2002 to 2008 a Justice on the Florida Supreme Court, commented that the most interesting aspect of the opinion is that, for the first time in Florida, a court applied the rule of lenity -- a doctrine of statutory interpretation requiring that a statute imposing criminal penalties must be construed in a defendant's favor -- to a civil case.
Industry followers believe that this case could affect hundreds of similar lawsuits filed throughout the State, by buyers seeking to recover hundreds of millions of dollars of deposits by suing to rescind preconstruction contracts following the housing bust.