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Is there a "best suited" law firm for Developer Turnover Transition to Homeowners?

By Alan E. Tannenbaum

HIRING TWO LAW FIRMS

 

Every condominium association should have a general counsel under retainer to advise on day-to-day operations and ongoing legal issues.  During the transition period, general counsel can be of great assistance to a new Board in getting acclimated to the varied requirements:

 

‚    Documents

‚    State Statutes

‚    State Administrative Rules & Regulations

‚    Common Law (court-created law) Governing Condominium Operations

 

The transition period is also the time for the construction quality of the building and improvements to be evaluated and for Association financial operation during the period of developer control to be scrutinized.  The type of law firm best suited to assist in the evaluation and to negotiate a resolution of possible claims is a trial firm experienced in negotiating and litigating condominium construction and accounting claims.

 

Our focus is on the evaluation and negotiation of turnover claims.  Certain law firms you may consider will offer services on both accounts (general counsel and turnover claims).  Although the concept of a 'one-stop shop' may be initially appealing, the Board should closely scrutinize whether the firm being considered is as strong on the turnover claims side as it is on the general counsel side.

 

FIRM BACKGROUND

 

Our firm has extensive experience (over 30 years) representing community associations in negotiations with developers and other responsible parties to resolve construction warranty and financial issues arising at turnover. 

 

Several of our clients outcomes:

 

‚         the negotiated resolution of tens of millions of dollars of warranty

            and accounting claims

‚         one of the largest jury awards ($3.35 million) for a plaintiff

            condominium association for a construction defects

 

OUR APPROACH

 

The first step would be for the Board to secure reports from engineering and accounting firms on the quality of construction and the condition of association finances during the period of developer control, respectively. 

 

We can assist the Board in locating appropriate experts for this purpose and outlining the specific inquiries which should be made.

 

Once the results are in, Chapter 558, Florida Statutes, mandates a pre-suit notice and inspection procedure as a prerequisite for construction defect claimants pursuing their rights in court.  Although most condominium association boards desire that their warranty claims be resolved without the need to resort to the court system, it is prudent to follow these procedures for no other reason than it keeps potential court resolution as a top-of-mind concern to the developer and other parties participating in negotiations. 

 

Notice letters should go out to all parties potentially responsible for the defects, so an identification of the parties involved in the design and construction of the building is the first step in the process.  In the notice letters, we will ask per the statute for file documents to be produced and invite the recipients to participate in a joint inspection at the site. 

 

The recipients are required under the statute to submit proposals to resolve the claims, or in the alternative to reject the claims.  Presuming offers are made, this would be the impetus for initiating negotiations hopefully leading to a settlement, which settlement could involve repairs or cash or a combination of the two.

 

Obviously, in order to evaluate offers and determine an appropriate posture in the negotiations, we would be working hand in hand with the Association's experts.

 

 

FEE STRUCTURE

 

Our firm charges a flat fee to assist the Board in selecting appropriate experts, assisting in defining the matters to be addressed in the expert reports, evaluating the expert reports, preparing a detailed claims analysis and meeting with the Board to discuss the findings.  We work on an hourly basis during the notice process.  For settlement negotiations or litigation, we offer hybrid arrangements involving reduced hourly rates and partial contingency fees. 

Full post as published by Florida Community Association Construction Law Blog on August 20, 2009 (boomark / email).