February 2016

Acquiring real property in Florida is one of the most common and remunerative investments to be made in the United States. However, just like in Italy, an investment needs to be managed and sometimes litigation becomes a necessary evil. However, unlike in Italy, the default rule in Florida (and across the United States) is that the parties pay for their attorneys’ fees (onorari legali) regardless of who is the prevailing party. Yet, this rule has several exceptions that generally apply in the real estate context.

First, the contract for sale and purchase may provide for the prevailing party to be entitled to attorneys’ fees and cost. Sometimes, however, developers prefer the default American Rule in order to discourage lawsuits on behalf of purchasers. Thus, it is important that a lawyer is involved prior to signing the contract for purchase, even if you are acquiring a pre-construction residence.

Second, the Florida Statutes provide for the prevailing party’s attorneys’ fees rule in litigation between a unit owner and a condominium or homeowners’ association. However, this kind of litigation is subject to strict procedural requirements, including mandatory mediation, arbitration, or both. Accordingly, a lawyer should be involved from the very beginning in order to outline a strategy and make sure that the unit owner has the financial resources to go up against an association.

To conclude, it is important to remember that litigation is approached in a completely different fashion in the United States. Litigation is a natural moment of an investment and, although it should generally be avoided, can be a powerful instrument to maximize the investment (and reduce future risks).