In a case of first impression for Florida, Miami partner David M. Gersten secured a written opinion in favor of Gordon & Rees' client, U.S. Home Corporation (Lennar), in Florida’s Second District Court of Appeal. The appeal centered around the enforcement of an arbitration provision contained in a recorded deed.
The appellants, who had no contractual relationship with U.S. Home, were subsequent purchasers of the property. Thereafter, the appellants sued U.S. Home for installing a faulty stucco system pursuant to statute. The appellants argued they were not bound by the arbitration provision in the original recorded deed because they were subsequent purchasers and they had no contract with the builder.
This case of first impression is the first time any Florida court has addressed whether arbitration provisions contained in a recorded deed can be enforced upon subsequent purchasers. To date, only three other courts in the country have addressed this issue. Gersten successfully argued that the appellants are bound by the arbitration provision contained in U.S. Home’s original recorded deed because the arbitration provision is a covenant running with the land. This case will have a lasting impact as it will impact thousands of properties conveyed in Florida.
The appellate court, recognizing the important and wide-ranging impact of this case also certified the following question as one of great public importance: “Does a mandatory arbitration provision contained within a residential warranty deed conveying residential property from home builder to original purchaser run with the land such that it is binding on subsequent purchasers where the intended nature of the provision is clear and the party against whom enforcement is sought was on notice of the provision?”
Other Gordon & Rees attorneys who helped in the process are Joe Sacher, Jack Cohn, and Jocelyn Ramos.