The reforms, if passed into law, will make life harder for delinquent owners by banning them from serving on boards and forcing landlord/owners to allow tenants to pay full rent money to the board until all debts are paid. They will also make it easier for homeowners in HOAs to speak up about items the board is considering at owner meetings.

Among the highlights:

Condos:

Will clarify that associations can now demand full rent from tenants in delinquent properties as opposed to just the current assessment amount.

Will make sure landlords cannot penalized a tenant for paying rent to the association to cover delinquent payments on behalf of the unit owner/landlord.

Will allow condo board members to submit proof of attending state-approved education courses in lieu of signing a form certifying they have read their documents and Florida law.

Will allow boards to ban delinquent owners from common areas, such as pools and club houses, without holding a hearing beforehand.

Makes clear that when an owner’s voting rights are suspended, the quorum requirement is reduced by the number of such suspended voters so as to safeguard the ability to achieve a quorum.

HOAs:

Will create a form letter for homeowners communities (along with condos and co-ops) to be sent to tenants explaining their obligation to pay rent to the association to cover an owner’s delinquent payments.

Will prohibit associations from cutting certified or franchised services to individual delinquent owners, including Internet and cable TV services.

Will ban felons from serving on the board, which would mirror current condo law.

Will allow owners to speak at board meetings on any item on the agenda, no longer requiring a petition from a number of owners to do so.

What do you say? Do you agree with such law changes? Do you disagree? Send an email to dvasquez@sunsentinel.com.
by: Daniel Vasquez of Sun Sentinel (May 5th, 2011). Visit the original post by clicking here!

South Florida Business Journal – by Oscar Pedro Musibay
Read entire article by clicking here

With funding from Europe, Miami-based Transacta Prive Development is considering a renovation of the 9-floor, 144-room hotel as a three- to four-star category hotel. Guests would likely pay $180 to $200 a night — far less than the price at the high-end resorts nearby, said Transacta’s chief Silvia Coltrane.

Coltrane said the renovation proposal hinges on funding details and new approvals from the city.

Fort Lauderdale had given the go-ahead for an 18-story tower with 320 guest rooms, trimming back her initial plan after some neighbors complained a 20-story building would be too big and obstructive.

If refurbishing proceeds as planned, the $16 million to $20 million makeover could begin construction this year and finish by the winter 2012-2013 season. Starting construction this year would help ensure lower building costs, given South Florida’s real estate slump and eagerness of contractors for work, she said.

The venture would finally offer some income for owners that paid $20.6 million for the 1.9-acre property in 2005 – with ambitious plans. At the height of the real estate boom, they envisioned a 20-floor tower with 340 luxury rooms commanding likely $600 a night and operated by a top-tier hotel brand, perhaps even Asia’s Peninsula. Then, the real estate market tanked and financing froze, dashing their hopes.

The hotel renovation would be the second on Broward County’s best known beach in recent months.

The former Holiday Inn at Sunrise Boulevard became the chic new 240-room B Ocean Fort Lauderdale resort that opened for business this year. A private equity group had bought the hotel for a bargain rate of $13.75 million in cash in 2009. Like the Howard Johnson’s, the beach hotel had been damaged by Hurricane Wilma and closed in 2005.

Nationwide, renovations at prime hotel locations are more common nowadays than the construction of brand-new hotels from scratch, industry experts say. That’s because refurbishing is less expensive. Banks remain cautious about lending for hotels after the financial meltdown in 2008, and developers hesitate to take on big debts anyway when tourism still faces an uncertain future, analysts say.

“What happens if gas prices go to $5 a gallon? How does that affect air fares, cruise fares and travel?,” asked hotel consultant Scott Brush of Miami, citing one major uncertainty facing the lodging industry. So, “the big companies are looking to buy existing properties and reposition them, not build new.”

Indeed, market uncertainties are holding back other projects on Fort Lauderdale beach too.

Hotelier Walter Banks, who owns the 204-room Lago Mar Resort & Club, said he’s decided not to pursue a $15 million expansion touted last year. The project would have demolished an existing building and replaced it with a bigger and more modern one, adding 26 suites.

Banks said he’s now planning only to build a new and larger swimming pool and renovate existing rooms at a cost of about $2 million.

‘Our world economy is very fragile, and we are very much impacted by what happens throughout the world. So, we have to be a bit more prudent in what we do,” said Banks, calling the $15 million plan too much risk to take on now.

Hotel analyst Brush said he’s confident that Coltrane’s 144-room renovation at the Howard Johnson’s site can succeed. For one, the buildings for former Howard Johnson’s are typically well-built and apt for reburbishing; one in Deerfield Beach recently was renovated into a Wyndham, he said.

Plus, with so many high-end hotels on Fort Lauderdale beach, Coltrane is “sensible” to appeal to a larger visitor base with a mid-range offering. “For the industry’s sake,” said Brush ,”we need to have a lot of variety in pricing levels.”

By Doreen Hemlock South Florida Sun-Sentinel
dhemlock@tribune.com, 305-810-5009
For original article, click here!

1. Race
2. Color
3. Religion
4. National origin
5. Sex
6. Age
7. Familial status (including not allowing children, discrimination against pregnant women)
8. Physical disability
9. Mental disability (including alcoholism and past drug addiction)

States and many cities have similar housing laws, and yours may prohibit other kinds of discrimination, including:

* Marital status
* Sexual orientation

Federal housing law prohibits a variety of discriminatory conduct:

1. Advertising cannot contain any statement indicating a preference or limitation based on any of the protected classes listed above.
2. The landlord may not make any similar implication or statement.
3. A landlord cannot say that an apartment is not available when in fact it is available.
4. A landlord cannot use a different set of rules for assessing applicants belonging to a protected class.
5. A landlord cannot refuse to rent to persons in a protected class.
6. A landlord cannot provide different services or facilities to tenants in a protected class or require a larger deposit, or treat late rental payments differently.
7. A landlord cannot end a tenancy for a discriminatory reason.
8. A landlord cannot harass you.

Note: The federal housing statutes do not apply to all rental property. The main exceptions are owner-occupied buildings with four or fewer rental units (e.g., a duplex), housing offered by religious groups or private organizations for their members, housing designated for senior citizens, and single-family housing being rented without discriminatory advertising or a real estate broker.

A landlord cannot refuse to rent to you because of a “no pets” policy if you have a trained helper animal, such as a seeing-eye dog, or a dog that helps you negotiate with a physical or mental disability. If the landlord does refuse, he or she has violated federal law, including the Americans with Disabilities Act.

Example: A jury in Minneapolis, Minnesota, recently awarded large damages to a man who was grief-stricken after his son’s murder and had begun taking care of his son’s dog at the suggestion of his therapist. Before he started taking care of the dog he was severely depressed and not functioning normally. The jury concluded that enforcing the landlord’s no-pets policy under those circumstances was a form of disability discrimination.

If you were rejected because the landlord received negative information about you, including information from previous landlords, your employer, your bank or other third parties, you have a right to know why.

Under the federal Fair Credit Reporting Act a landlord has to tell you if the rejection was based on negative credit information that came from a source other than your credit report.

* The federal Fair Credit Reporting Act also requires a landlord to tell you that, during the sixty days after he or she informs you that there was negative credit information, you may submit a written request for disclosure of the negative information.
* After receiving your request for disclosure of the negative information, the landlord must tell you “the nature of the information,” within a “reasonable time.” The law does not indicate how much detail the landlord must give you.

You have a right to “habitable” premises. This is a fancy way of saying the apartment or house you are renting is fit to be lived in. Don’t compromise on this right. You have a right not to live in a hovel. Most states do not let a landlord put language in the lease stating that you “waive” the right (that is, give it up). The following conditions could make premises “uninhabitable.”

* Unsafe conditions, such as holes in the floor, plaster coming down from the ceiling, bad wiring, and the like.
* Gross infestation of vermin such as cockroaches or mice.

Under federal law, rental housing must be free of lead-based paint. It is more typical in older buildings, and up to 75 percent of the housing stock is still affected by it. No matter how old or new the premises are, watch for chipping paint, peeling paint, flaking paint, and paint dust.

Warning: Lead-based paint is extremely dangerous to small children and pets, causing damage to the central nervous system. Crawling and toddling children interact with their environments by putting things in their mouths, and paint dust is easily inhaled. The consequences for your children could include diminished IQs, learning disabilities, Attention Deficit Hyperactivity Disorder (ADD/ADHD), mental retardation, and brain damage.

You have a right to privacy. Your landlord cannot come into your apartment or house without prior permission unless there is a true emergency like a fire or a flood in the bathroom.

The landlord must give you advance notice before coming into your apartment for other reasons, like making repairs or showing the unit to a potential tenant. Some states have laws that regulate these entries and set forth rules on how much advance notice the landlord must give, and whether the landlord must tell you what time he or she will enter and why.

Your landlord cannot require a deposit that exceeds a limit set by your state’s law. Not all states have an upper limit, however. Also, the statute may allow different limits depending on your age (a lower limit for senior citizens, for example), whether you have a pet or waterbed, the length of your lease, or other factors.

A landlord must treat tenants equally on deposit requirements. If you are required to provide a larger deposit than one of your neighbors, you have the right to know why.

In many states the landlord must return the deposit to you at the end of the lease term with interest set by a statute.

Many states also have a statute stating how much time a landlord may take to return your deposit after you move out (usually thirty days).

If the entire deposit is not returned, your landlord must send you an itemized list of how the money was spent. Common conditions that lead to reduced deposit refunds include:

* Repairs to damages on the premises beyond mere wear and tear
* Cleaning to restore the premises to the condition they were in at the beginning of your lease (beyond normal wear and tear)
* Unpaid rent

Tip: Take pictures of the apartment when you first move in, especially areas that may be damaged already, and take the same picture when you move out. Save the receipts for developing the film so you know which is which and can establish the date on which you took the pictures. Or make videotape.

You have several legal rights if your landlord takes action against you for nonpayment of rent or a breach of the lease. Generally, your rights relate to having proper notice of the proceedings against you, a chance to make good on the unpaid rent or to repair your breach of the lease, and rights to appeal. If you are worried that you may be evicted, you may want to discuss the situation with a lawyer or a local tenants’ association.

You also have a right to take legal action against your landlord for breach of contract if he or she breaches the lease, fails to return your deposit, takes unwarranted deductions from your deposit, or fails to make repairs. Before proceeding, you will want to discuss your options with a lawyer.

With a combined $282.8 million outstanding to a commercial mortgage-backed securities (CMBS) fund managed by Wells Fargo, the loans are to affiliates of Palm Beach Gardens-based Kitson & Partners.

Kitson & Partners Chairman and CEO Syd Kitson said his company is current on payments and has requested special servicing to restructure the loans. The company has been funding the shortfall between the properties’ income and the debt service, but Kitson said it would like to modify the terms of the mortgages.

“We are very confident that is going to happen,” he said. “Like everyone else who bought in 2007, we have certain challenges with this commercial portfolio, and we want to make sure it is restructured going forward.”

That means more than just cutting the interest rates, he added.

Kitson & Partners is the same company that has proposed building 19,500 homes, 6 millions square feet of commercial space and a solar power plant in the 17,800-acre Babcock Ranch in Charlotte and Lee counties.

Babcock Ranch is not included in the CMBS loans, which cover shopping centers that secured mortgages in 2007 – when real estate values were at their peak. Fitch Ratings said the special servicer is CWCapital.

According to data from CMBS analysis firm Trepp LLC, the loans cover the following shopping centers, starting with the largest:

* Riverbridge, 6702-6864 Forest Hill Blvd., in Greenacres. The 229-897-square-foot center is home to Publix, 24 Hour Fitness and Keiser Career College.
* Gateway Plaza, 101 Towne Center Blvd., in Sanford. Tenants in the 214,490-square-foot center include Bealls Department Stores, Toys R Us and Ross Dress for Less, which plans to move from that location.
* Orlando Square, 1728 W. Sand Lake Road. The 190,884-square-foot center has Ross Dress for Less and Michaels, although it lost Linens ’N Things when that retailer went out of business.
* Oak Grove, 995 State Road 434, in Altamont Springs. The 176,619-square-foot center has Stein Mart, Fresh Market and Saxon Clark, which plans to leave.
* Ramblewood Square, 1201-1327 N. University Drive, in Coral Springs. The 143,235-square-foot center is anchored by Publix.
* Murdock Carrousel, 1900-2000 Tamiami Trail, in Port Charlotte. The 139,938-square-foot center leases to Office Depot and Haverty Furniture.
* Casselberry Exchange, 5803 S. U.S. Highway 17, in Casselberry. Tenants in the 124,707-square-foot center include Bed Bath & Beyond, Staples and Books-A-Million.
* Plaza Del Mar, 264 East Ocean Ave., in Manalapan. Tenants of the 102,715-square-foot center include Evelyn & Arthur and Florida Stage.
* Galt Ocean Marketplace, 3700 N. Ocean Blvd., in Fort Lauderdale. The 105,000-square-foot center is home to Winn-Dixie and CVS Pharmacy.
* Springs Plaza, 1873-2401 W. State Road 434 and 125-165 Wekiva Springs Road, in Longwood. The 62,580-square-foot center contains mostly local businesses.

The Plaza Del Mar and Galt Ocean Mile properties are covered by a $59.2 million loan at 5.53 percent, while the other eight centers are secured by a $223.4 million loan at 5.6 percent. Both loans are interest only. The smaller one matures in March 2012, while the larger loan is not set to mature until 2017.

According to Fitch, the sponsors of the loans are Kitson & Partners and Morgan Stanley Real Estate America. Kitson said his company bought out Morgan Stanley’s interest last year.

In its Feb. 25 report on the loan with eight shopping centers, Fitch said the properties’ performance has steadily declined due to the weak local retail markets, causing lower rents and a decline in occupancy to 82 percent from 88 percent when the loan was made. As of September, the properties’ year-to-date income covered only 97 percent of the debt service, down from 119 percent at loan origination.

Fitch forecast a 28 percent loss to the CMBS fund, should the loan on the eight shopping centers default.

As for Plaza Del Mar and Galt Ocean Mile, the combined occupancy declined to 70.8 percent in June, from 92 percent when the loan was made, according to Fitch. That’s mostly due to Galt Ocean Mile, which is 45.7 percent vacant. As of June 2010, the year-to-date income from the properties covered only 59 percent of its debt service, down from 81 percent in 2009 and 119 percent at loan origination.

Should the loan on these two centers default, Fitch forecast a 40 percent loss for the CMBS fund.

The reports from both Fitch and Trepp show that the loans have been current on payments.

Read more: Fitch: Loans on 10 Fla. shopping centers in imminent default | South Florida Business Journal

The many woes of Florida’s housing market are well-known: hundreds of thousands of foreclosures, millions of underwater mortgages and a four-year trail of depreciating property values.

Florida lawmakers, handicapped by a $3.6 billion budget shortfall, will take their best shot at solving some of the most pressing housing problems during this year’s legislative session, which kicks off on Tuesday in Tallahassee.

In a session likely to be dominated by budget battles, public employee pensions and education reform, housing legislation isn’t at the top of most lawmakers’ minds, said Arden Shank, president of Neighborhood Housing Services of South Florida.

“Housing as a public policy issue is a real face-the-music issue for many homeowners and has been an issue for many years now, and folks tend to forget about it,” he said. “Foreclosure prevention, at least for South Florida, is still a major issue.”

A few lawmakers—many of them from South Florida—are pitching housing bills this year. The proposed laws generally fall into three categories: help for condo associations, property tax reform and changes to the foreclosure process.

Last year, the Legislature passed the Distressed Condo Relief Act, which gave condominium associations the authority to collect rent directly from the tenants of delinquent unit owners, and bar any non-paying condo owners from using common amenities like pools.

A couple of bills up for consideration this year seek to expand on those powers, appealing to the growing number of condo boards frustrated by their defaulting neighbors.

Woodie Neiss, president of the condo board at The Bamboo House Condominium in Miami Beach, says his association needs every tool it can get to deal with delinquent homeowners. One unit owner, he says, is $14,000 behind on maintenance fees and has been openly defiant towards anyone trying to collect.

“He’s completely milking the system. He knows that it’s so hard for people to kick him out and his goal is just to stay in there rent free,” he said. “We pay for the water, we pay for the insurance, we pay for the cable. It’s completely ridiculous.”

Since the condo building only has 12 units, each non-paying owner leaves a large burden on the other owners, said Neiss, who became president when nine of the unit owners were paying their fees.

One bill, backed by Sen. Gen Margolis, D-Aventura, would give condo associations the power to cut off cable and Internet access to unit owners who are more than 90 days behind on their maintenance fees.

The Bamboo House condo has a bulk cable agreement, Neiss said, so owners in good standing have been subsidizing the cable costs of the delinquent owner for four years. A law that would allow the condo to cut off cable in the delinquent units would be helpful, he said.

“Why do these people need cable television?” he asked. “So they can sit there and make their lives even more comfortable, while they’re making life miserable for the rest of us?”

Critics say the bill is an overreach, and will not help a situation caused mostly by stubbornly high unemployment.

Sen. Jeremy Ring, D-Margate, is against the idea of cutting off unit owners’ cable, but is sponsoring legislation that he believes will help associations and clean up some of the foreclosure process at the same time.

BY TOLUSE OLORUNNIPA of the Miami Herald
Read more by clicking here!

To stand out in the crowd, a newly launched residential brokerage is offering to do a bit more for apartment buyers financially: Realbate promises to split its commission, which is 3.0% of the property’s sale price, 50:50 with its customers.

Realbate joins a number of new brokerage firms which are trying to grab a piece of the reviving local residential market by adding new wrinkles to the traditional buyer’s agent model. The new firm claims to be the first brokerage firm to offer buyers 50% of the firm’s commission. While other brokerage firms are offering rebates, those rebates range from 10% to 20%, said Russell Reiter, managing director of Manhattan-based Realbate, which quietly formed in November and is officially launching this month with two agents.

“We see people going to Streeteasy.com and Trulia.com to search for apartments on their own, and we want to partner with them,” said Mr. Reiter, adding that a recent clarification in a New York state law regarding how much of a broker’s commissions can be rebated to clients made the creation of Realbate possible. “We want to be a resource for do-it-yourself buyers and recognize the work that they do in their search.”

Nationwide, more than 87% of home searches begin online, according to the National Association of Realtors. Mr. Reiter is hoping to capture that market and provide these types of buyers’ expertise beyond what they can do on their own. Realbate agents can help buyers navigate through complicated issues such as dealing with a seller’s broker, understanding co-op board packages and obtaining additional city property data that a consumer can’t easily find online, he noted.

Under Realbate’s model, a sale of a $1 million apartment, would earn the brokerage half of its typical commission of $30,000, with Realbate handing the buyer a $15,000 rebate. The firm’s business model is based on two crucial assumptions, that its agents will spend less time on a deal with their web-using clients, and that as a result they will be able to handle a higher volume of clients. In other words, it hopes to make back the portion of the commission that the firm hands over to clients by doing a higher number of transactions, Mr. Reiter said.

Realbate joins a growing list of residential brokerage firms that offer a rebate to its clients. Last year, CondoDomain.com, an online real estate brokerage that offers buyers 20% of its commissions on a deal, entered the Manhattan market. Anthony Longo, founder of CondoDomain, said the firm is doing so well that it will be launching its service in five more cities across the nation within the next six weeks.

While the competition is stiff, Mr. Reiter said homebuyers will pick Realbate because it’s the only brokerage offering a rebate that exclusively represents buyers. “We are not a dual broker and will never be in a position where there will be a conflict of interest between seller and buyer,” he added.

To attract business, Realbate is advertising on Trulia.com to capture apartment hunters using that popular site. Realbate hopes to make similar partnerships with other online real estate sites such as Streeteasy.com.

By Amanda Fung of Crains New York

Watch the video on Wall Street Journal’s website by clicking here!

About 54 percent of home purchases in Palm Beach, Broward and Miami-Dade counties were cash buys in the final quarter of 2010. That’s about 7,530 homes and condominiums between October and December that were paid for with Benjamins instead of borrowing, according to real estate analysts at Zillow.

In South Florida’s real estate zenith of 2006, just 13 percent of sales were in cash. In pre-boom 1997, cash buys made up 31 percent of the market.

Of 11 major metropolitan areas in the country studied by Zillow, South Florida had the highest percentage of cash buys in the fourth quarter of last year.

“I haven’t pulled a mortgage in six months,” said Corcoran Group agent Anthony Pizzarelli, who specializes in downtown West Palm Beach condos. “You just have a lot of people with a lot of cash running around.”

Many of those financially gifted consumers, however, are not South Floridians buying a homestead.

Investors and international buyers are driving the cash deals, including Canadians who get loans in their own country to buy winter escapes here with ready money.

Stricter lending standards also are contributing to the plethora of cash buys, as well as snowbirds Bill and Clara Marie Jessup.

Spring Hill, Tenn.-residents during the summer, the Jessups typically rent a place in South Florida through the fall and winter.

This year, with bargain-basement home prices, the couple decided to buy. They shopped for about two weeks before getting a $149,000 cash contract on a three-bedroom, two-bathroom pool home in Palm Beach Gardens that is bank-owned.

Clara Marie Jessup said they decided to pay cash because they believe a home will bring a better return on their money than a CD or other investment.

“Any kind of interest income is so low right now, we might as well put it into a house,” she said. “If prices go down any more, they’re not likely to go down appreciably.”

Ally Bank was offering 1.84 percent interest last week on a three-year CD. Nationwide Bank offered 1.85 percent.

Sales of existing homes jumped nationally and in Florida in January, according to reports released last week by Realtor groups. Statewide, sales were up 14 percent compared with January last year. They rose 36 percent in Palm Beach County.

The National Association of Realtors said the increases were fueled by cash purchases, which accounted for 32 percent of January home buys nationwide. That’s the highest level since the group started measuring cash deals in Oct. 2008 when they accounted for 15 percent of the market.

In Palm Beach County, 2,039 cash deals were done in the last few months of 2010, up 45 percent compared with the same time in 2009, according to Kent Clothier, CEO of REI Marketing, LLC in Boca Raton.

“Hopefully it’s a good sign that the economy is turning around,” said the Jessups’ Realtor Shannon Brink, of Re/Max Prestige Realty in West Palm Beach. “People are spending money again on Florida real estate.”

William Stronge, a professor emeritus in economics at Florida Atlantic University, said the cash buys are indicative of how far the market has fallen, and will have both a negative and positive effect on South Florida.

While cash is helping sell homes to international investors, it’s not helping create financial sector jobs in the mortgage industry.

“In that sense, there might be a slight negative,” Stronge said. “But on the other hand, you’re attracting people into the market who might not have come otherwise.”

A cash deal is a necessity for Paul Advani. A Toronto Realtor looking to buy a place in South Florida, Advani said he wouldn’t qualify for a U.S. loan.

“That doesn’t mean I have cash, cash, cash in my pocket,” Advani said. “But I can borrow here and pay cash there.”

Plus, Advani said he thinks he’ll get a lower price with cash.

“They know the deal is done when it’s cash, there’s no waiting” he said. “Cash has power, cash is king.”

By Kimberly Miller
Palm Beach Post Staff Writer
For full story Click Here.

“Given the vast growth in the last decade and a half in the number of people and entities regularly using e-mail,” handwriting and e-mail should now basically be considered one and the same, according to the decision in Naldi v. Grunberg, which was handed down on Oct. 5 by the Appellate Division, First Department of State Supreme Court in Manhattan. The ruling, which attracted little public notice when it was announced, was appealed on Monday to the Court of Appeals, the state’s highest court.

“As much as communication originally written or typed on paper, an e-mail retrievable from computer storage” is proof of a deal, according to the court’s opinion, which was written by Associate Justice David Friedman.

Though the case involved accusations of breach of contract in a commercial real estate transaction, the decision applies to residential deals as well. Lawyers says the ruling expands the state’s Statute of Frauds, a law with roots in 17th-century England that requires all property deals to be agreed to in writing.

In its decision, the five-judge panel also took an expansive view of a 1994 amendment, saying that if e-mail can be used for financial transactions like taking out business loans, it should be good enough for home purchases, too.

For example, a seller or a broker who, in an e-mail, uses a phrase like “$700,000 was more of what I had in mind,” he or she “might have a problem,” said Robert J. Braverman, a Manhattan real estate lawyer. “You need to be mindful of what it is you are saying in electronic communications,” he said.

Though e-mail is hardly a new form of communication, uncertainty persists about how binding it is, which means the ruling in Naldi v. Grunberg could bring some clarity.

Some brokers in the city said that they were unaware of the case and that their firms not have hard-and-fast rules in place about e-mail exchanges.

In most cases a disclaimer can inoculate senders from having e-mail backfire, real estate lawyers said. Mario J. Suarez, a lawyer at Thompson Hine who handles many commercial transactions, suggested that the wording might say the communications “shall not be deemed an offer, as no documents are binding unless and until executed.” Kirk Henckels, an executive vice president of Stribling, said he was under the impression that e-mails are “what we used to do over the phone,” and that property cannot truly change ownership until a paper document is signed by both parties. Mr. Henckels said the thinking was, “I can call this off unless I’ve received it back,” alluding to a signed contract.

Richard Steinberg, a broker with Warburg Realty, said he had always treated e-mails seriously. He said he had used e-mail as leverage to extract important information in negotiations, with the knowledge that the e-mailed information might be binding.

For instance, if the broker for the seller of a co-op wrote in an e-mail that an apartment measured 2,000 square feet, and then an architect determined it to have just 1,500 feet, Mr. Steinberg said he would call the seller out on it.

“They always respond much more liberally in e-mail than they do in writing,” he said. “And guess what? I print it out.”

Naldi v. Grunberg involves a dispute over a pair of adjacent brick apartment buildings in Midtown Manhattan, at Nos. 15 and 19 West 55th Street, owned by Michael Grunberg, a major landlord.

In 2007 an Italian developer, Robert Naldi, sought to build a hotel on the property, according to Kevin Nash, his lawyer. In an e-mail, Mr. Naldi offered $50 million for the two nine-story buildings, which have stores on their ground floors and apartments above.

A contract went out for $50 million, and Mr. Naldi, assuming that he was the buyer, began researching how much structural work the 1920s buildings required, Mr. Nash said.

Then, soon afterward, Mr. Naldi learned unexpectedly that Mr. Grunberg had sold the buildings to another hotel developer, Ark Investment Partners, for $52 million, which prompted the suit for breach of contract.

What happened might seem typical in real estate — a seller wants to make the most money he can on a sale, after all — but Mr. Naldi’s lawyers dusted off an old e-mail, sent on Feb. 12, 2007, by Mark Spinelli, a broker with Massey Knakal Realty Services.

In it Mr. Spinelli granted Mr. Naldi a right of first refusal, according to a copy of the e-mail published in court documents, meaning that he should have had at least a chance to counter Ark’s offer. Mr. Grunberg sought to dismiss the suit, but a lower chamber of the Supreme Court blocked him from doing so, while concluding that e-mail is a legitimate form for deals to take.

Mr. Grunberg then took his case to the higher appellate court, where he had better luck. In the October 2010 ruling, the justices said that the suit should be dismissed because there was no real evidence that the two sides had agreed on a deal. Because Mr. Naldi never acknowledged the e-mail from Mr. Spinelli with one of his own — in essence, because he never pressed “reply” — he could not claim that the right of first refusal had ever been extended to him, the court said.

But like the lower court, the justices affirmed that e-mails are binding in real estate negotiations, which is perhaps the most important implication for buyers and sellers.

The Naldi case is continuing. On Feb. 14, Mr. Nash filed papers in the Court of Appeals. He said Mr. Naldi was still seeking damages, “in an amount to be determined.” Mr. Grunberg did not return calls for comment, nor did Andrew N. Krinsky, his lawyer.

By C. J. HUGHES
Published: February 17, 2011
New York Times