A total of $723 million in contracts for future commercial and residential construction were awarded in South Florida in June, up 101 percent from $360 million in the same month a year before, according to Dodge Research Analytics. Kluger Kaplan founding member Alan Kluger spoke to John Pacenti of the Daily Business Review about what this construction boom means for litigation.
“It’s what I call good-economy construction litigation, meaning that things are being built and they are selling,” said Kluger. “We are in a boom. There is no doubt about it.”
Prior to the 2008 recession, the South Florida skyline was teeming with cranes as the real estate market boomed. But then the newly or partially completed projects remained empty as developers and brokers were unable to sell residential and commercial properties and projects. With the entire real estate community reeling, brokers, developers, lenders, investors and buyers and sellers often turned to the courthouse to resolve issues that emerged as the South Florida real estate market was plummeting. As we emerge from the recession, a review of the events of the past few years may help to avoid future litigation.
Earlier this week, the Miami Herald reported that developers in South Florida are relying on buyer financing to finance residential construction projects.
In the last few years, I have seen a number of lawsuits by banks against developers, suing the individuals on their personal guarantees when the projects failed. I have also worked with several brokers who were forced to sue developers to obtain commissions that they were never paid because the projects were not completed. I predict that buyer financing will minimize these types of cases.