Business Law Non-Competes

How long can a non-compete last in Florida? To determine whether a non-compete/non-solicitation agreement is reasonable in time, Florida courts are guided by section 542.335, Fla. Stat.  Specifically, Florida law sets outside parameters for reasonableness with respect to four separate categories of covenants:  

(1) Covenants restricting former employees, agents, and independent contractors;

(2) Covenants restricting former distributors, dealers, franchisees, or licensees of a trademark or service mark;

(3) Covenants incident to the sale of a business; and (4) post-term covenants predicated upon the protection of trade secrets.

What does evictions moratorium mean for landlords?

Recently, the U.S. Supreme Court struck down the CDC’s extension of the nationwide Eviction Moratorium which was set to expire on October 3, 2021. The Supreme Court’s conservative majority stated that “The moratorium has put . . . millions of landlords across the country at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership – the right to exclude.”

What does this mean for Landlords? The lift on the moratorium ban has provided immediate relief to Landlords as they can start evicting non-paying Tenants. While some Courts still recognize the right to obtain rental assistance, evictions can now proceed. Due to the moratorium lift, the number of evictions filed have increased. This can cause delays and confusion for your case. And if you are a landlord who is not familiar with the eviction process to begin with, then your confusion can lead to devastating outcomes. Therefore, it is advantageous to hire a lawyer who understands how to navigate the eviction process. While evictions are not complicated, they are nuanced, and it is better to avoid unnecessary delay and potential costs by hiring an attorney to assist you in reaching the desired outcome of your case.

If you are a landlord, the moratorium lift means having a chance at recouping your lost costs. Don’t miss the opportunity because of potential confusion. If you have any questions on how to proceed next, please call our office at (386) 310-7997.

Kistemaker Business Law Group Welcomes new Paralegal/Office Manager

Kistemaker Business Law Group is pleased to welcome Rima Suleiman as the company’s new paralegal/office manager.

Rima Suleiman is a recent law school graduate of Florida State University where she received her J.D. Rima also received a University of Central Florida, B.S. degree in 2017 and graduated cum laude, Order of Pegasus. She is fluent in Arabic and can speak intermediate French. She also has a beginner’s understanding of Mandarin.

In law school, Rima was a judicial clerk to the Honorable Judge Feigenbaum of the Seventh Judicial Circuit Court. She conducted research and produced a thesis paper analyzing COVID-19 and States of Emergency: The Rule of Law and Risks to Civil Liberty.Prior to joining Kistemaker, Rima completed internships with former Florida Senator, Bill Nelson, and former diplomat to the U.S. Department of State, Ambassador Harriet Elam-Thomas. ​Under her direction, Rima researched and produced a case study on The KRG and the Ascent of Women as Political Leaders.

Rima was awarded the Lester N. Mandell Diplomacy Fellowship on behalf of the Global Perspectives Office at UCF and the Global Connections Foundation. Rima was also awarded both the Non-Traditional Literacy Engagement Award and Recognition of Excellence in the College of Arts and Humanities for the 13th Annual Service Learning Showcase at UCF for her volunteer work with children in the public school system.

Pool Safety at Community Association Pools

Florida is hot. And because Florida is hot, we have more pools than nearly every other state (approx. 1.3 million), second only to California (approx. 1.6 million). For community associations, the pool is often the number one amenity offered to its residents. But it could also be the association’s number one liability.

With all those pools, Florida also holds the dubious distinction of having the most child drowning deaths. Drowning also poses a significant risk to medically fragile adults. Pool safety should be on everyone’s mind. The Florida legislature has created safety standards for public pools including barriers, pool covers, door alarms, and devices to disable the pump/drain.

One safety measure that Florida does not require is an emergency phone poolside for public pools. Florida is one of only seven states that do not have an emergency phone requirement (the other states without an emergency phone requirement are Vermont, Pennsylvania, Mississippi, Colorado, Alaska and Hawaii). It is curious why a state with so many pools would not require an emergency phone at public pools.

Community Association pools are considered public pools since they serve more than one living unit or household. Since community associations operate public pools, they can expect children and medically fragile adults to use these pools. While emergency phones are not required by law, they still may save a life.

Hard-wired phones are better than cell phones in emergencies because:

  • Hard-wired emergency phones will give an exact location to 911 operators whereas cell phones only give the cell tower location
  • There is no need to worry about dead cell phone batteries
  • There is no need to worry about intermittent or low cell reception
  • There is no need to worry about unlocking a cell phone with wet fingers on a touch screen, using fingerprint recognition or giving out your PIN to strangers. Anyone can use an emergency phone at the touch of a button.
  • Emergency phones can be used in other circumstances where a cell phone is not available. For example, a child might get accidentally locked out of their home or a cell phone might be stolen from the pool area or fall into the pool.

For the safety of its residents and guests, all Florida community associations should consider installation of an emergency phone at its pool. A red phone could save a life.

When John Lennon wants to Divorce the Beatles

Legendary Sir Paul McCartney recently told the BBC that it was John Lennon who asked for a “divorce” of the Beatles. McCartney was left with the task of petitioning the court to dissolve the business partnership that was “The Beatles,” which gave him the unfortunate reputation of being the Beatle who broke up one of the most beloved music groups of all time. This reputation, says McCarthy, frustrated him for the past 50 years.

The Beatles’ partnership agreement was 2-3 paragraphs long, written on a single sheet of paper. McCartney’s lawsuit finally settled after four years, with the parties reducing their agreement to an 87-page settlement agreement. What started out as a simple agreement between good friends became a protracted battle in the courts.

Business breakups, big and small, can be emotionally and financially taxing. Help prevent this stress by:

  • Enter an operating or partnership agreement with all members/partners at the start of the business enterprise.
  • Keep track of how much money and sweat equity each member/partner is contributing.
  • Create triggering events for termination of the business and buyouts of each other’s interests.
  • Create a means to easily value the business for purposes of a buyout.
  • Put non-compete agreements and non-disclosure agreements in place between members/partners.
  • Create agreements on who owns real and personal property of the business, intellectual property (e.g. trademarks and copyrights), and proprietary information (e.g. client lists, proprietary processes, etc.) upon dissolution of the business.
  • Consult with an experienced business attorney at the formation of the business.

An experienced business attorney can guide you and your business through all stages of the business life cycle. If you are starting a business, or experiencing a business breakdown, contact one of our business attorneys for a consultation.

New Florida Roofing Laws Affect Insurance

Our clients need to be aware of these statutory changes to roofing laws that were put into effect to stop fraudulent insurance claims. 

News COMMERCIAL ROOFING By Riolit Martha On Sep 6, 2021

New Florida roofing laws affect insurance mainly due to hurricanes and strong storms, Florida is one of the few states with extensive roofing regulations.

Now the laws of how to get your roof repaired or replaced have changed. A new law in Florida went into effect July 1 that changes the way roofers and insurance companies handle claims and how homeowners can file claims. The focus is on the containment of fraud in roofing claims.

Amanda Smith, director of marketing for R / J Group Inc., outlined the key changes homeowners and business owners need to know.

• Property insurance claims, supplementary claims and recovery claims must be made within two years.

• Property insurers must completely replace roofs under 10 years of age.

• For roofs that are more than 10 years old, property insurers can now use a “roof area compensation plan” for the sale of policies, which essentially offers reduced coverage depending on the age and type of roof and adjusts claims to the actual cash value (this does not apply to a Total loss caused by a “covered risk”).

• Property insurers can offer homeowners the option of purchasing a government ceiling for roof cover.

• Owners must give the insurance company 60 days notice before filing a lawsuit.

• Lawyers filing lawsuits on behalf of contractors are now restricted from charging insurance disputes.

• Building contractors and public appraisers can no longer incentivize property owners or accept incentives for referrals. RELATED POSTS ABC Supply Co. Inc. Recognizes Two Associates with Company’s… Sep 28, 2021 Solar Integrated Roofing Corp. to Present at LD Micro Main… Sep 28, 2021 Global Composite Slate Roofing Market Report 2021 Sep 28, 2021

• Roofers are no longer allowed to advertise door-to-door, which is crucial for some roofing companies in their marketing plan.

Aside from soliciting and offering no incentives, roofers and contractors in central Florida are minimally affected. For the R / J Group, the new law doesn’t change anything for them, as the company doesn’t believe in these practices anyway.

Kyle Johnson, R / J Group’s Sales Director and Service Manager, added, “Shortly after the law was passed, the roofing industry was questioning it to some extent. They are reviewing the law and are going to have to make some very big changes. There is actually a law about how roofers can approach customers about their insurance. It is strictly a law to curb fraud claims in the roofing industry. “

He said the law touches on some freedom of expression concerns, such as roofers advising clients on insurance benefits. Roofers know what to look for in order to cover roofing problems with insurance, with some developing “a whole bunch of sales tactics”.

However, Mr Johnson stressed that the R / J Group is solely focused on being a quality roofer and generating its business through word of mouth.

One type of clapboard is known as lifelong clapboard, but Mr Johnson stated that some home insurance companies would not take out policies on roofs that are more than 10 years old.

“We saw a lot of it,” he said. “This is very worrying considering that your roof is no longer good, even though the manufacturer says you still have a long life expectancy. You need to take out home insurance. As the roofs get older it becomes extremely difficult to get the insurance writer to wear these policies.

“ He recommended annual roof inspections during which potential problems could be identified and corrected. So if a storm does significant damage, the paperwork will show that the roof was fine before the storm. Some guarantees require roof audits and are serviced annually anyway. “There are significant cost savings when doing this proactively rather than reactively,” he said.

Regardless of which roofing company you hire, at least an annual inspection with necessary repairs is a good idea to reduce the chance of catastrophic storm damage while staying up to date with new roofing laws.

Subrogation Claims and Community Association’s – Water Leaks can be an issue years later:

More and more, insurance companies that provide unit owner insurance are suing community associations to recover payments made to the unit owner that are related to water leaks in the unit. These type of lawsuits are problematic. First, the insurance companies are waiting years to bring them, although still within the statute of limitations for the lawsuit, but nonetheless to the detriment of the community association’s defense of the case as records and memories fade overtime. Secondly, the cases are many times brought in small claims court as a result of the insurance company seeking at most $5,000.00 in “reimbursement” from the community association.

The issue with defending a small claims court case is that the cost of defending the lawsuit can be more than the amount the insurance company is seeking which puts pressure on the community association to simply settle. The basis of the insurance company’s lawsuit against the community association is negligence; the insurance company claims that the association had a duty to take some action, failed to take the action and such a failure led to loss that resulted in the insurance payment to the unit owner.What can be done to limit a community association’s exposure to such lawsuits? First, the community association should consult with its attorney to determine if an amendment to the declaration for the association should be adopted related to subrogation.

Next, community associations need to promptly respond to complaints related to leaks and properly document repair work in a detailed manner so that the location and extent of work is easily understood. The documentation related to repair work should be kept for seven years and be readily accessible. Community associations should perform routine maintenance and inspections of property that the association is required to maintain in order to identify in advance of a water leak areas of needed maintenance. Anytime there is a water leak or other casualty to unit, the association must thoroughly document, in writing, what happened to cause the leak, what was done in response to the leak and all communications between the association, the unit owner and the unit owner’s insurance company and adjuster. Such documentation should be shared with the community association’s attorney and kept in the association’s official records.

Erum Kistemaker Earns Super Lawyers Designation

Congratulations to our Erum Kistemaker for earning the 2021 Super Lawyers designation in Real Estate Law! Click the link to see the listing int the Super Lawyers Magazine and navigate to page 99:

Seller’s legal options when a Buyer no-shows or refuses to close

We have been contacted quite a bit lately regarding Seller’s legal options when a Buyer does not show up to closing or backs out of the deal on the eve of closing, or simply refuses to close. The answer to this question actually depends on what remedies the sales contract grants in that circumstance.

Typically, the vast majority of residential contracts in Florida are written on some version drafted by FAR/BAR, so there is some consistency to a seller’s remedies upon a buyer’s default.

Questions to consider:

Is the buyer in default?,

What is the reason (legal or otherwise) that the Buyer is refusing to close; unable to get financing (financing contingency)?,

Is the Buyer still within the inspection period?,

Has a title defect been discovered that the seller was unable to cure within the contract’s cure period?   

All of the above events may give rise to a Buyer’s legitimate right to terminate the contract, and in that case no Buyer default would exist. However, assuming that a buyer default does exist, the FAR/BAR contracts set out a seller’s remedies in section 15(a), which states:

If Buyer fails, neglects or refuses to perform Buyer’s obligations under this Contract, including payment of the Deposit, within the time(s) specified, Seller may elect to recover and retain the Deposit for the account of Seller as agreed upon liquidated damages, consideration for execution of this Contract, and in full settlement of any claims, whereupon Buyer and Seller shall be relieved from all further obligations under this Contract, or Seller, at Seller’s option, may, pursuant to Paragraph 16, proceed in equity to enforce Seller’s rights under this Contract.  The portion of the Deposit, if any, paid to the Listing Broker upon default by Buyer, shall be split equally between Listing Broker and Cooperating Broker; provided however, Cooperating Broker’s share shall not be greater than the commission amount Listing Broker had agreed to pay Cooperating Broker. So, in short, the seller has two remedies upon a breach: 

1) Retain the deposit which was paid or agreed to be paid. (in which case that is the seller’s sole remedy), or

2) Seek to “proceed in equity” to enforce the seller’s rights.  That basically means that the seller can ask a court to force the buyer to follow through with the contract, and purchase the property. Of the two remedies, sellers opt for the first in the vast majority of circumstances.  The second remedy involves the filing of an expensive, drawn out, and uncertain lawsuit – and the property will be tied up for the entire duration.  It is important to remember that before the seller can avail itself of any remedy, it is required by paragraph 16(b) to make an attempt to mediate the dispute. What are the take-aways from the above process? Since sellers will most often resort to retaining the deposit upon a buyer’s breach, it is important for them to ensure that the amount of the deposit is sufficient to cover any actual damages that they are likely to suffer if the buyer fails to close. 

a) Many sellers’ attorneys will alter the language of the contract to allow them to recover any actual damages that they may incur as a result of a buyer default, even if greater than the deposit amount. 

b) If the seller does elect to retain the deposit as its remedy, can it get the property back on the market quickly?  Some sellers are concerned that signing a second sales contract while the first has not been recognized as “cancelled” by the original buyer could result in two active contracts on the property.  Generally, once a party to a contract has defaulted on its obligations, the other party is no longer obligated to perform.  So, once a buyer commits a material breach of the agreement, the seller is no longer obligated to honor the contract, and is free to enter into a second agreement to sell the property in order to mitigate damages.  Deciding whether this is the best course of action can be tricky since it requires several legal determinations.  Is the buyer actually in default?  Is the default of a material term?  Is there any valid excuse for the failure of performance?  For that reason, before a seller declares a buyer in breach, demands the deposit paid, and enters into another contract for the property, they will likely want to consult with an experienced real estate attorney to confirm that course of action. 

As always, should you have any questions regarding the foregoing we urge you to consult with a Florida real estate attorney.

Condo Collections: During these financially difficult times how condos collect past due assessments

If a unit owner does not pay his or her assessments, the condo association has the power to file a claim of lien and, ultimately, foreclose on the unit. But in order to do the above, the condo association must strictly comply with the statutory pre-conditions and requirements which follow:

1 – Perfecting the Lien: Call or send a nice Reminder/Demand Letter (Optional)
Contact the owner And let them know they are late in paying their assessment. This simple step may result in the unit owner paying all amounts due and owing, without any additional action required by the association.
 2 – Notice of Intent to Record a Claim of Lien (mandatory pre-condition)
A notice of intent to lien is a formal statutory letter sent to the delinquent unit owner stating the association’s intent to place a lien on the unit for the owners failure to pay assessments. The notice of intent to lien must be delivered to the owner of the unit by both registered or certified mail, return receipt requested, and first-class United States mail to the owner at his or her last known address as reflected in the records of the association. If the address reflected in the records of the association is not the condominium unit address, the notice of intent to lien must also be delivered to the owner at the address of the unit. Delivery of the notice is deemed given upon mailing. § 718.121(4), Fla. Stat. The association must give the owner thirty (30) days to pay the outstanding balance before proceeding to the next step.
3 -Record the Claim of Lien
Thirty (30) days after sending the notice of intent to lien, the association can record the claim of lien in the public records. § 718.121(4), Fla. Stat. In Florida, the claim of lien must be drafted by an attorney because a legal description is required and it creates property rights. To be valid, the claim of lien must include:
• a legal description of the condominium parcel;
• the name of the record holder;
• the name and address of the condominium association;
• the amount due;
• the due dates; and
• it must be executed and acknowledged by an officer or authorized agent of the association.
The claim of lien secures all unpaid assessments that are due and that may accrue after the lien is recorded through the entry of final judgment, as well as interest, administrative late fees, and all reasonable costs and attorney fees. § 718.116(5)(b), Fla. Stat. The claim of lien is only valid for one (1) year after it is recorded. In other words, a legal action to foreclosure the lien must be commenced within one (1) year of filing the claim of lien.
If the unit owner pays the amount owed in full, the owner is entitled to a filing and recording of a “Release of Lien” in substantial compliance with the form found in in § 718.116(5)(d). The unit owner may contest the lien by filing a “Notice of Contest of Lien.” If the unit owner files a Notice of Contest of Lien, the association must commence a legal action to enforce the lien within ninety (90) days from the date the association received such notice. If the association does not commence an action within that ninety (90) day period, the claim of lien is voided. § 718.116(5)(c).
4 – Notice of Intent to Foreclose the Lien
The condominium association must provide written notice to the unit owner of its intention to foreclose its lien thirty (30) days before filing a lien foreclosure action. The notice must be delivered by physically delivering a copy to the unit owner, or by certified or registered mail, return receipt requested, addressed to the unit owner at his or her last known address. The notice is deemed to have been given at the time of mailing. § 718.116(6)(b).
5 – Foreclose the Lien
Thirty (30) days after the condominium association provided written notice of intent to foreclose, the association may bring a legal action in its name to foreclose the lien in the same manner a mortgage of real property is foreclosed, and may bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney’s fees incurred in either action. § 718.116(6)(a). At the foreclosure sale, the association has the power to purchase the condominium unit and to hold, lease, mortgage, or convey it. § 718.116(6)(d).