Payton & Associates, LLC
Commercial Litigation Attorneys
Miami, Florida

When Florida lenders act in bad faith

When companies in Florida look to expand or move into a better space for their operations, they may decide to purchase commercial real estate. This can be a very important decision for the company and one that needs to be done carefully. There are also many steps to the process, but it usually starts with securing the money for the purchase through lending. This is usually secured from a bank or other lenders. This can be a complicated process by itself, but both sides are expected follow the terms of the contract.

Oftentimes people hear about borrowers breaching the terms of their loan, most commonly because they fall behind on monthly payments. However, the lenders can also be liable if they act in bad faith. Sometimes lenders fraudulently induce the contract, or the terms were not mutually agreed to by both parties. This can occur if the lender purposely misleads the borrower about the terms of the agreement. Another way that lenders breach is by improperly selling collateral used to secure a loan if the borrower defaults on the loan.

When lenders breach these agreements, they can be liable for the damages that the borrower suffers just like borrowers are liable when they breach. These damages can include the difference between the loan amount and the cost of finding a replacement loan, the costs associated with securing a new loan, damages associated with lost opportunities while securing new lending and others. The lender may also lose their ability to collect the amount owed at the time of the breach or forfeit their security interest in the loan.

There are many loan agreements made in Florida for commercial real estate. Each one of these agreements is negotiated and the terms of the agreements can vary depend on the needs of the borrower. However, one thing remains the same for all loans. If the lender breaches the terms of the agreement or commits other illegal acts, the lender may be liable for the damages that borrowers suffer as a result of the breach. These are complicated matters, though, so consulting with an experienced attorney can be beneficial.

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