Kluger Kaplan Named Top Real Estate Litigation Department by the DBR

Last night, Kluger Kaplan accepted the Daily Business Review’s award for the Top Real Estate Litigation Firm in South Florida.  Many of our attorneys attended the awards dinner at the Four Seasons.  Managing Member, Alan Kluger, accepted the award on behalf of the firm.  ”We are humbled to be honored with firms of this caliber,” said Kluger.  “Litigators in this community are at the forefront of social change and community service and we are proud to be a part of this esteemed group.”

The Collateral Source Rule in Landlord/Tenant Disputes

By Philippe Lieberman

Florida’s Collateral Source Rule is often overlooked in landlord-tenant disputes.  Under the rule, an injured party may recover full damages from a tortfeasor even if the injured party recovers money from an independent third-party such as an insurer.  This rule is often overlooked by litigators but can lead to a significant recovery for a client.  I deal with a lot of commercial landlord-tenant disputes where the property is damaged as a result of the tenant’s negligence or intentional misconduct.  Oftentimes my clients will make a claim with their insurance company and also sue the tenant for negligence.  The Collateral Source Rule allows landlords to collect from both the insurance company and the tortfeasor.

While opponents of the Collateral Source Rule complain that it allows for double recovery, the rule serves two practical functions.  First, it rewards the landlord for obtaining insurance.  Recovery from both the insurer and the tortfeasor should not be looked at as “double recovery” but rather recovery of the insurance premiums that the landlord pays for the benefit of the tenants.  A tenant that commits bad acts – intentionally or negligently – should be required to bear some of the cost to insure the premises.

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Kluger Kaplan Named Top Litigation Department in Real Estate by the Daily Business Review

Kluger, Kaplan, Silverman, Katzen & Levine was named Top Litigation Department in Real Estate by the Daily Business Review.

“We are thrilled to be chosen for such an honor,” said Founding Partner, Alan Kluger, “Kluger Kaplan has built a significant practice both locally and nationally handling a variety of complex real estate litigation matters.”

The firm will be honored at an awards ceremony on April 17 at The Four Seasons.

Lender Liability: Are Lender-Borrower Relationships Really Arm’s Length Transactions, Without Any Heightened or Fiduciary Duties?

By Philippe Lieberman

Over the last two or three years, I have encountered scenarios where the traditional rule – that a relationship between a lender and borrower is an arm’s length transaction – is called into question and creates potential lender liability.

  • 1) As real estate development in Florida has grown, developers have increasingly obtained construction loans tied to the value of the property being developed, called “loan-to-value” loans.  In these types of loan transactions, the bank lends the developer money up to a certain percentage of the value of property being developed, based upon a formula that is set forth in the loan agreement.  As development continues, the value of the property increases by virtue of the improvements to the land and the builder is able to borrow more money based upon the increased value.  However, the borrower must also maintain certain debt-to-value ratios or risk triggering a default under the loan agreement.  The bank has significant control over the success of the project because its valuations of the project determine how much money the developer can draw at any given time and determines whether the borrower is maintaining a proper loan-to-value ratio.  Because lenders have such significant control, it is important that they fairly and accurately value the property.  When banks improperly value the property or take actions that negatively impact the value of the property, they can sabotage – even unintentionally – the entire development project and expose themselves to potential lender liability.

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Third DCA Watch: AG Group Investments, LLC v. All Realty Alliance Corp.

By Michael S. Perse

Last week, the Third District Court of Appeals’s decision in AG Group Investments, LLC v. All Realty Alliance Corp. provided those of us who handle foreclosure cases with a much-needed review of Florida law.  Simply stated, the Third reminded parties that junior lenders still have rights and their rights cannot be foreclosed until after the foreclosure sale.  If you are a junior lender facing extinguishment of your mortgage as a result of a foreclosure sale, your rights will not be foreclosed until after the Certificate of Sale is recorded.

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