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<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>Reese:<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>Have you contacted all of the speakers for the CLI regarding
their papers. Particularly, did you speak with Ty Thompson, the presenter for
the last session on surety bonds – Serving Two Masters. If so, let me know. I
would like to get him a co-presenter.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><br>
Cary<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<div>
<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>
constructionlaw-bounces@lists.flabarrpptl.org
[mailto:constructionlaw-bounces@lists.flabarrpptl.org] <b>On Behalf Of </b>Reese
J. Henderson, Jr.<br>
<b>Sent:</b> Monday, September 12, 2011 10:44 AM<br>
<b>To:</b> constructionlaw@lists.flabarrpptl.org<br>
<b>Subject:</b> [RPPTL-constructionlaw] Legislative Subcommittee Report -
amendmentto 713.10 proposal<o:p></o:p></span></p>
</div>
</div>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Folks,<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>My
report is that the Executive Council approved the proposed glitch fix for
713.10 at the August meeting at The Breakers. A copy of that bill is
attached. During the discussions leading up to the adoption of this bill,
a point was raised by the title insurance committee that the procedure for
demanding a verified copy of the lien prohibition in the lease could have the
effect of allowing construction liens to “pop up” after the closing of a sale
to a bona fide purchaser for value without notice of the potential lien due
solely to the owner’s failure to respond timely to such a demand.
Specifically, upon the sale or refinancing of any property on which there is
one or more outstanding notices of commencement for tenant improvements, and
for which there is a blanket notice recorded, the title companies are refusing
to rely upon the blanket notice to remove any exception from the title
commitment for these notices of commencement. The reason is that there is
no record evidence as to whether a demand for a verified copy of the lien
prohibiting language (“DVC”) was served or whether the owner responded timely,
with the result that liens literally could “pop up” that otherwise would be
invalid solely due to owner non-compliance with the DVC. The result has
been that these deals cannot close unless the landlord goes to the cost and
expense of terminating these notices of commencement. By one report, these
costs added between $15,000 and $20,000 to the cost of one transaction
alone. And that does not include the disruption to the tenants making the
improvements and their contractors. So the folks on the title insurance
committee requested a fix which would allow title companies to rely upon the
blanket notices, <u>at least with respect to bona fide purchasers for value
without notice and lenders for value and without notice</u>. It was
agreed at the Executive Council meeting that we on the CLC with work with the
title insurance committee and the landlord tenant committee to find such a
solution.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>
<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>The
solution they proposed (see the second attachment for the context) reads as
follows:<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal style='margin-left:.5in'><u><span style='font-size:11.0pt;
font-family:"Courier New"'>If there is already a recorded lease, short form
lease, memorandum of lease or notice of lease under s. 713.10(2)(b) with
language prohibiting the lien against the lessor, any bona fide purchaser,
mortgagee or other third party who takes any right, title or interest by an
instrument executed by the lessor takes free of any recorded claim of lien for
noncompliance with a demand made as stated above, if such claim of lien is
recorded after the execution and delivery of the instrument to such bona fide
purchaser, mortgagee or other third party, notwithstanding the previous
recording of a notice of commencement, if any. </span></u><o:p></o:p></p>
<p class=MsoNormal style='margin-left:.5in'><span style='font-size:10.0pt;
font-family:"Arial","sans-serif"'> </span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Some
concerns have been voiced that landlords somehow could manipulate this
provision to avoid liens. It should be noted, however, that a bona fide
purchaser, by definition, is not an alter ego of the owner landlord. The
net effect of this change would leave the lien still enforceable against the
owner not complying with the DVC. It would only be unenforceable against
innocent third parties.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>A
solution was proposed by Larry – to require a DVC to be served within 45 days
of first furnishing – that would arguably reduce the risk of a lien “popping
up”, but it would not eliminate the problem and, from what I understand, would
not convince title underwriters to insure over an outstanding notice of
commencement. So owners would still but stuck with the transaction costs
of terminating every outstanding NOC for tenant improvement work in order to
get title insurance on a sale or refinance transaction. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>This
language has been outstanding since last month and, frankly, we owe a response
to the other committees. I would propose moving forward with the
suggested language quoted above as a reasonable compromise of several competing
interests. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Reese<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p>
<div>
<div style='border:none;border-left:solid black 1.0pt;padding:0in 0in 0in 0in'>
<div style='border:none;border-bottom:solid black 1.0pt;padding:0in 0in 4.0pt 0in'>
<p style='margin:0in;margin-bottom:.0001pt'><strong>Reese J. Henderson, Jr.</strong><span
style='font-size:9.0pt'><o:p></o:p></span></p>
<p style='margin:0in;margin-bottom:.0001pt'><span style='font-size:9.0pt'>Board
Certified Construction Attorney <o:p></o:p></span></p>
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<p><img width=331 height=78 id="_x0000_i1025"
src="cid:image001.jpg@01CC7139.C5251C80"><o:p></o:p></p>
<p><span style='font-size:9.0pt'>707 Peninsular Place<br>
Jacksonville, Florida 32204<br>
<br>
Phone (904) 354-5200<br>
Facsimile (904) 354-5256<br>
<a href="mailto:%5Be-mail%5D">Reese.Henderson@atritt.com </a><br>
<a href="http://www.tritthenderson.com/">www.tritthenderson.com</a></span><o:p></o:p></p>
</td>
<td style='padding:3.75pt 3.75pt 3.75pt 3.75pt'>
<p align=center style='text-align:center'> <img border=0 width=94
height=123 id="_x0000_i1026" src="cid:image002.jpg@01CC7139.C5251C80"><o:p></o:p></p>
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<p style='margin:0in;margin-bottom:.0001pt'><span style='font-size:9.0pt'> <o:p></o:p></span></p>
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<p class=MsoNormal><o:p> </o:p></p>
<p style='margin:0in;margin-bottom:.0001pt'><span style='font-size:9.0pt'>CONFIDENTIALITY
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<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> Silvia Rojas
[mailto:SRojas@TheFund.com] <br>
<b>Sent:</b> Friday, August 12, 2011 4:56 PM<br>
<b>To:</b> 'Arthur J. Menor'<br>
<b>Cc:</b> Reese J. Henderson, Jr.; 'fred.dudley@hklaw.com'; 'Kristopher
Fernandez'; 'leiby@mkpalaw.com'; 'Weintraub, Lee'<br>
<b>Subject:</b> Construction Liens<o:p></o:p></span></p>
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<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>As
a recap, attached is the original email attachment I had sent.
Below is some additional alternative language to the third
paragraph that I proposed after the feedback I received from some of you in
this email:<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><u><span style='font-size:11.0pt;font-family:"Courier New"'>If
there is already a recorded lease, short form lease, memorandum of lease or
notice of lease under s. 713.10(2)(b) with language prohibiting the lien
against the lessor, any bona fide purchaser, mortgagee or other third party who
takes any right, title or interest by an instrument executed by the lessor
takes free of any recorded claim of lien for noncompliance with a demand made
as stated above, if such claim of lien is recorded after the execution and
delivery of the instrument to such bona fide purchaser, mortgagee or other
third party, notwithstanding the previous recording of a notice of
commencement, if any. <o:p></o:p></span></u></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>A
number of the construction law committee members would rather not have the
third paragraph altogether – but that would leave a purchaser/mortgagee from
the lessor completely unprotected. The first two suggested paragraphs on
the attachment are merely procedural. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>Another
suggestion from Larry Leiby with a different focus:<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>I prefer leaving it at the first two paragraphs and, for your
benefit, add that the request for lease must be made within 45 days of first
work. It is no panacea but is certainly a middle ground that has the
least opportunity for harm in my opinion.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>Kris
will be attempting to obtain feedback from several title insurance committee
members by the end of the day on Monday. I hope that we can agree on some
sort of protection to third party bona fide purchasers/mortgagees that relied
on the original notice/memo/lease indicating the prohibition against liens on
the owner’s interest. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>We
do need a fix to this. The current language allows the request to be
given even after the sale/mortgage of the property and allows the claim of lien
to revert back to a previously recorded NOC by a lessee despite third party
reliance on the previously recorded notice/memo regarding the prohibition in
the lease. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'>Thanks
to all who have participated in the discussions. <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Silvia B. Rojas</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Sr. Underwriting Counsel</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Miami-Dade Branch</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Attorneys' Title Fund Services, LLC</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>8200 NW 52nd Terrace, Suite 300</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Miami, Florida 33166-7763</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>Tel: 800-432-9594 x 7713</span><o:p></o:p></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
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<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Comic Sans MS";
color:blue'>email: </span><a href="mailto:srojas@thefund.com"><span
style='font-size:7.5pt;font-family:"Comic Sans MS"'>srojas@thefund.com</span></a><o:p></o:p></p>
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