New Yorkers and Other Out of State Owners of Florida Real Estate: It’s Critical to Monitor the Status of the Title to Your Florida Properties

Matt E. Bales, Jr., Esq.

A recent case in the Fifth District Court of Appeals resulted in harsh consequences for an owner of Florida real estate.  In the case of Rivas v. Tsang, 45 Fla. L. Weekly D994 (5th DCA 2020), the Fifth District Court determined that an owner of a property in Florida who took no action upon learning of a fraudulent transfer of the title to his Florida property had no recourse against a bona fide purchaser of the property who had no knowledge of the fraudulent transfer of the title.

In the case, a rental home that was owned by Lenin Rivas was managed by his cousin Cesar Suarez-Rivera, who created a fraudulent power of attorney that he used to sell Mr. Rivas’ property to the Paginis in December 2012.  In February 2013, Mr. Rivas became aware of the fraudulent transfer of the property when his lender told him that his mortgage was satisfied upon the sale of the property. Mr. Suarez-Rivera acknowledged using the fraudulent power of attorney to sell the property. Notwithstanding this, Mr. Rivas did absolutely nothing until February 2014 when he hired an attorney to represent him. In April 2014, without knowledge of the existence of the fraud, the Paginis sold the property to the Tsangs who were bona fide purchasers for value. In 2015 Mr. Rivas filed a lawsuit in court seeking a declaratory judgment determining the rights of Mr. Rivas and the Tsangs in the Florida property. The trial court found that Mr. Rivas’ failure to act contributed to his losses, and therefore the Tsangs were the rightful owners of the property.

The Fifth District Court affirmed the decision of the trial court and stated “[i]f one man knowingly, though he does it passively by looking on, suffers another to purchase and expend money on land under an erroneous opinion of title, without making known his claim, he shall not afterwards be permitted to exercise his legal right against such person.”  The Tsangs being the ultimate purchasers had no notice of the fraud because of the failure of Mr. Rivas to act. The Fifth District Court also stated “where one of two seemingly innocent parties must suffer a loss caused by the misdeed of a third party, the ‘least innocent should suffer, and the least innocent is the one who could have prevented the misdeed.’” Accordingly, the Fifth District Court agreed with the trial court’s decision that Mr. Rivas due to his inaction was the least innocent party and therefore the title to the property was vested in the Tsangs.

As many Florida properties are owned by persons residing in New York and other States, this case makes its critical for all out of State owners of Florida property to check on the status of title to their properties.  In Florida real estate records are readily available online in most Counties and therefore it is relatively simple for a property owner to periodically check the public records to see if there has been any fraudulent activity relating to their Florida properties.  In the event any such fraudulent activity should occur, it is imperative for the property owner to immediately seek the advice of an experienced Florida real estate attorney to make a claim in Court to avoid the unfortunate results suffered by Mr. Rivas.