When entering into an agreement in the real estate market in Florida, whether it is for commercial or residential purposes, there is always a chance that the situation will take a turn for the worse. In the high-end world of commercial real estate, a great number of issues can result in the need for commercial real estate litigation. Lenders and owners who are in a disagreement over a property and its payments need to be aware of how to handle legal problems that often arise with these properties. This is particularly true with retail spaces.
A bank has moved forward with a lawsuit for foreclosure after a shopping mall owner fell behind on a loan. The loan was for more than $42 million, with $382,000 in missed payments from July to September of 2016. More payments totaling $690,000 were allegedly missed in October and November. In addition, there is a lien for property taxes that were not paid. This came to $923,000. The mall in question is still open in spite of the lawsuit and allegations of missed payments.
The goal of the owner was to alter the mall and reinvent it. The company claims to have made significant upgrades to improve and expand the shopping center. It was purchased in 2013 with several department stores as tenants. The area saw an adjacent portion of land sold for the purpose of a $50 million apartment complex. However, there have been departures of tenants of the mall and the plan to build a new hotel have stagnated. One department store, Sears, closed late last year. Those in the real estate market believe that the area has good potential with office complexes being sold. Regardless, the lawsuit for failed payments moves forward.
As with any case involving commercial property, there is the chance that after a purchase the owners will have an issue making the payments if the plans to develop do not go as well as they had hoped. These owners must make sure they protect themselves against foreclosure.
Source: Orlando Sentinel, "Lender sues to foreclose on Orlando Fashion Square," Kyle Arnold, Jan. 10, 2017