High-Value Litigation Involving Developer Bankruptcies and Breach of Contract on Major Real Estate Projects

Rising interest costs, tighter credit, and construction inflation have pushed more large U.S. companies into distress, and real estate developers are no exception. The result for Florida and other gateway markets in 2025–2026 is a visible uptick in high-value disputes tied to stalled projects, missed milestones, and bankruptcies. For owners, lenders, contractors, and trade creditors, the litigation playbook now blends bankruptcy law, lien/bond remedies, and hard-fought contract claims.

Why Bankruptcy Is Back in the Conversation

Large corporate filings have trended above historical averages. Independent research notes that 1H 2025 saw elevated Chapter 11 activity, including a jump in “mega” bankruptcies (>$1B assets), compared with long-term norms. See the mid-year data overview here:
Cornerstone Research – Bankruptcy & Financial Distress, Mid-2025 (PDF).
For a neutral primer on how Chapter 11 works, see the U.S. Courts’ resources:
Chapter 11 – Bankruptcy Basics and
Bankruptcy Basics (Overview).

What Changes When a Developer Files Chapter 11

• Automatic stay freezes most litigation and lien enforcement. Creditors must seek stay relief to proceed (see Title 11 generally:
  11 U.S.C.).
• Executory contracts can be assumed or rejected under 11 U.S.C. § 365. Construction contracts, development agreements, and ground leases may be “assumed” (cured and continued) or “rejected” (breached as of filing), with significant damages and project-control implications:
  11 U.S.C. § 365.
  For DOJ background:
  DOJ – Executory Contracts.
• Preference and fraudulent-transfer exposure. Pre-petition payments and collateral grants may be attacked as preferences or fraudulent transfers, impacting contractors, vendors, and insiders:
  § 547 (Preferences),
  § 548 (Fraudulent Transfers),
  and related recovery under
  § 550.
• Plan leverage and timing. Debtors often have an exclusive window to propose a plan of reorganization; creditors need strategy for disclosure-statement challenges, valuation fights, and cram-down. See:
  U.S. Courts – Process in Chapter 11.

Florida Remedies Still Matter: Liens and Bonds

Florida’s lien and bond framework continues to drive outcomes on large vertical and mixed-use projects, even when a bankruptcy is pending (subject to the stay).

• Construction liens (private projects). Florida’s Construction Lien Law (Chapter 713, Part I) governs notices, recording, priority, and transfers to security:
  Fla. Stat. ch. 713, Part I.
• Payment bonds (unconditional). On bonded private jobs, claims typically proceed under
  § 713.23, Fla. Stat.
  (timely notices still critical).
• Conditional payment bonds. When the bond is properly recorded and identified as “conditional,” downstream lienors may be limited to lien rights to the extent the owner pays the contractor:
  § 713.245, Fla. Stat.
• Public projects. No liens attach to public property; claimants proceed on statutory bonds under
  § 255.05, Fla. Stat.

Common High-Value Disputes on Major Projects

• Milestone and delivery slippage. Owners allege delay, defective work, or failure to meet financing/absorption targets; developers counter with force-majeure, change-order, and interference defenses.
• Rejection/assumption battles in bankruptcy. Whether a development agreement or GMP contract is assumable (with cure) or rejectable; what “adequate assurance” looks like for continued performance under
  § 365.
• Lien priority and bond exposure. Contests over perfection dates, transfer-to-bond amounts, and whether a conditional bond was properly established under
  § 713.245.
• Preference/fraudulent transfer claims. Clawback of late-stage payments or collateral granted to trades, sureties, or insiders prior to filing:
  § 547,
  § 548.
• Single-asset or single-project filings. Courts continue to scrutinize “bad-faith” or tactical filings involving one development asset; see recent reporting on limits to abusive filings:
  Reuters coverage: restrictions on filings (2025).

Playbook for Owners, Lenders, and Trade Creditors

1. Audit contracts and security early. Confirm guarantees, collateral, and step-in rights; calendar notice and cure periods that affect termination or default interest.
2. Preserve lien/bond rights. Track Chapter 713 deadlines and bond notice requirements precisely:
   Florida Construction Lien Law,
   Public Project Bonds.
3. Prepare for bankruptcy dynamics. Map contract-assumption risk, cure claims, and potential clawbacks under
   § 365,
   § 547,
   § 548.
4. Control the record. Keep contemporaneous schedules, pay apps, meeting minutes, RFIs, and critical-path analyses—essential in delay and damages models.
5. Use ADR strategically. On multi-party towers and mixed-use projects, early mediation can unlock bond proceeds, minimize stay disputes, and manage reputational risk.

What Developers Should Do Before a Filing

• Stabilize the cap stack. Evaluate DIP financing prospects and adequate protection for secured lenders; analyze milestones you can actually hit under a 13-week cash flow.
• Prioritize assumable contracts. Identify trade partners critical to completion and the cure costs to assume those contracts under
  § 365.
• Assess clawback risk. Model exposure for recent transfers (preferences/fraudulent transfer) and shore up “ordinary course,” “new value,” and solvency defenses (see
  § 547,
  definition of “new value”,
  § 548).
• Coordinate with sureties. On bonded jobs, align with surety claims handling so performance/payment issues don’t derail the case or violate the stay.

Feinstein Real Estate Litigation & Business Law

We represent owners, developers, lenders, and construction stakeholders in high-value disputes involving developer insolvency, construction delays/defects, lien and bond claims, and complex contract litigation. Our team handles emergency stay relief, adversary proceedings, preference/fraudulent-transfer defense, plan negotiations, and Florida lien/bond litigation under Chapters
713 and
255.
We also offer mediation services for multi-party project disputes, helping clients reach practical resolutions before value erodes.

Feinstein Real Estate Litigation & Business Law
501 E Las Olas Blvd, Suite 300, Fort Lauderdale, FL 33301
Phone: (954) 767-9662
Website: www.feinsteinlaw.net

Broker Commission Disputes: New Enforcement Trends & Contract Litigation Involving South Florida Agents

Commission disputes are surging into 2025–2026 as South Florida agents, brokers, and clients adapt to sweeping policy changes stemming from national settlements and updated MLS rules. Below is a practical overview of what changed, how enforcement is evolving, and where contract litigation is most active—plus steps to reduce risk before a dispute turns into a lawsuit.

What Changed in 2024–2025 (and Why It Matters Now)

• Offers of compensation are prohibited in the MLS. Pursuant to the National Association of Realtors’ 2024 policy changes, MLS participants may not publish offers of compensation to buyer representatives in any MLS field. See NAR’s policy summary and reminders:
  NAR 2024 MLS Changes and
  NAR Practice Change Implementation (Aug. 17, 2024).
• Written buyer agreements are required before showings. Agents working with buyers must use written agreements that specify services and compensation arrangements—off-MLS and fully negotiable (NAR Settlement FAQs).
• Florida-specific forms and guidance updated in 2025. Florida Realtors issued new compensation forms and FAQs to memorialize off-MLS agreements and educate members on commission flexibility and dispute pathways:
  Florida Realtors: MLS Compensation Changes and
  Florida Realtors: Compensation/Commission Library.
• Local rulebooks reflect the changes. For example, the Miami REALTORS® MLS rules include the 2024 policy effective dates and 2025 updates:
  Miami MLS Rules (updated Aug. 21, 2025).
• Federal antitrust scrutiny continues. National coverage and government filings outline the shift toward negotiated, off-MLS compensation and heightened competition:
  AP: NAR settlement and policy overhaul,
  Axios Tampa Bay: New Rules in Florida,
  U.S. DOJ Antitrust: Appellate Briefs (Real Estate matters).

Where Disputes Are Emerging in South Florida

• Earned vs. payable commission: Whether a listing or buyer-broker agreement defines commission as “earned” at contract, at closing, or upon performance—and what happens when a deal collapses.
• MLS vs. contract conflicts: Old templates that referenced MLS cooperative compensation now clash with 2024 policy. If the listing packet, buyer agreement, and addenda don’t match, disputes follow.
• Dual/competing claims: Two brokers claim the same buyer or argue “procuring cause,” especially where private off-MLS compensation terms differ from expectations.
• Termination and withdrawal: Sellers withdraw listings or switch brokerages; agents claim entitlement based on protection periods or ready-willing-able buyer production.
• Team/agent split disputes: Internal commission-split fights between brokers and associated licensees often bypass FREC and head straight to civil court, per Florida guidance (Florida Realtors Commission Library).

Enforcement & Compliance Trends

• MLS compliance actions: Local associations are policing prohibited compensation fields, remarks, and attachments. Repeated violations risk fines or access issues (Miami MLS Rules).
• Written buyer agreements: Missing or vague buyer agreements undermine claims for payment and are drawing scrutiny in arbitration, mediation, and litigation (NAR FAQs).
• FREC’s role is limited in pay disputes: The Florida Real Estate Commission does not compel commission payments between brokers/agents; these are civil contract matters (FREC/DBPR and
  Florida Realtors guidance).

Risk-Reduction Checklist for South Florida Brokerages

1. Update all templates: Replace pre-2024 language that references MLS-posted compensation. Ensure listing and buyer agreements clearly state when and how compensation is earned, negotiated, and paid (off-MLS).
2. Use written buyer agreements before showings: Spell out scope of services, fee structure (flat, hourly, percentage), and who may pay the fee (NAR FAQs).
3. Align your MLS inputs with the rules: Do not place compensation in remarks, attachments, or any MLS field (NAR 2024 Policy;
   Miami MLS Rules).
4. Document procuring cause: Maintain detailed timelines of showings, offers, negotiations, and communications. These records decide many split and procuring-cause disputes.
5. Train teams on off-MLS negotiations: Compensation is now negotiated privately. Use Florida-specific forms and keep signed copies in every file (Florida Realtors FAQs).
6. Consider ADR first: Many agreements (and board bylaws) permit or require mediation/arbitration prior to litigation. Early mediation can preserve relationships and cut legal spend.

Litigation Posture: What We’re Seeing in 2025–2026

• Contract-centric claims: Breach of listing or buyer-broker agreements; disputes over “earning” events and protection periods.
• Arbitration appeals and court challenges: Parties testing arbitration outcomes in court when MLS policy intersects with private contracts.
• Antitrust-adjacent defenses: In higher-stakes matters, parties raise competition arguments informed by national policy shifts and government filings (DOJ Antitrust Appellate Briefs and
  AP coverage).

How Feinstein Real Estate Litigation & Business Law Can Help

We represent South Florida brokerages, teams, and individual licensees in commission disputes, including contract drafting and audit, pre-suit negotiations, mediation, arbitration, and state-court litigation. We also offer mediation services designed to resolve commission conflicts efficiently—often before they escalate into expensive, public litigation.

Feinstein Real Estate Litigation & Business Law
501 E Las Olas Blvd, Suite 300, Fort Lauderdale, FL 33301
Phone: (954) 767-9662
Website: www.feinsteinlaw.net

Florida’s Live Local Act and the 2025 Surge in Zoning Litigation: How Pre-emption Is Redefining Real Estate Development

Florida’s Live Local Act, originally enacted in 2023 and strengthened in 2024 and 2025, continues to reshape the state’s development environment. While its goal is to encourage affordable housing construction, the law’s sweeping pre-emption of local zoning powers has sparked new waves of litigation between developers, municipalities, and neighborhood associations. The result: 2025 has become a landmark year for real estate disputes over density, height limits, and local authority.

What the Live Local Act Does

The Live Local Act allows qualifying affordable and mixed-income housing projects to bypass local zoning restrictions and secure approval based on the existing commercial or mixed-use designation of a parcel. It also limits a local government’s ability to deny projects meeting statutory criteria and caps parking and height restrictions under certain conditions. A summary from Florida Housing Finance Corporation notes that the law provides developers with density bonuses, streamlined approval, and partial property-tax exemptions for qualifying units.

By 2025, dozens of local governments—especially in coastal and high-value markets—had issued moratoria, adopted “interpretive” ordinances, or created new zoning overlays to slow down Live Local projects. Those restrictions have in turn triggered lawsuits alleging that cities and counties are violating the Act’s pre-emption provisions.

Rising Litigation Over Local Pre-emption

The 2025 Chambers Real Estate Litigation report highlights that Florida courts are now seeing a significant uptick in suits where developers challenge local denials or delays under the Live Local Act. Common claims include:

• Whether a project truly qualifies as “mixed-income housing” under statutory definitions;
• Whether local governments can impose design standards, impact fees, or parking requirements inconsistent with state law;
• Whether temporary zoning moratoria violate the Act’s intent to promote rapid approval;
• Conflicts between municipal comprehensive plans and the Act’s state-level pre-emption clause.

Early rulings in 2025 have generally favored state pre-emption, reinforcing that local governments cannot enact ordinances or administrative policies that effectively block qualifying projects. However, courts are also requiring developers to meet strict documentation and affordability-duration requirements before invoking the Act’s protections.

Implications for Property Owners and Developers

For developers, the Live Local Act offers both opportunity and uncertainty. When properly structured, a project can gain major entitlements in locations that previously prohibited high-density housing. But missteps—such as inadequate affordable-unit verification or failure to follow procedural notice requirements—can lead to litigation or local resistance.

Property owners considering sales or joint ventures should understand that parcels zoned for commercial use may now have expanded development potential under the Act, potentially increasing value. At the same time, neighboring owners are challenging projects that they claim are incompatible with existing neighborhoods, leading to new private litigation outside the governmental context.

Municipal Responses and State Oversight

Several Florida counties have requested legislative clarification, arguing that the law undermines local comprehensive plans and infrastructure capacity. The Florida League of Cities has called for amendments to clarify notice and compatibility standards, while the Florida Housing Finance Corporation continues issuing guidance on compliance and eligibility.

The Florida Attorney General’s Office has also issued interpretive opinions supporting the state’s authority to pre-empt local zoning where affordable housing goals are clearly established. See recent updates on MyFloridaLegal.com.

Practical Compliance Steps

1. Conduct thorough due diligence: Confirm the property’s land-use classification and verify that it meets the Live Local Act’s affordability thresholds (40% of units at or below 120% of area median income).
2. Document affordability commitments: Prepare affordability covenants and record them to satisfy state oversight and future audit requirements.
3. Engage early with local planning staff: Even though pre-emption limits denials, early communication helps prevent unnecessary delays and procedural challenges.
4. Monitor pending legislative updates: Lawmakers are expected to revisit aspects of the Act in 2026 to refine definitions and funding mechanisms. Track updates through the Florida Senate and Florida House websites.
5. Consult experienced counsel: With zoning disputes increasingly litigated at the circuit and appellate levels, having legal guidance from attorneys familiar with both development law and pre-emption issues is critical.

How Feinstein Real Estate Litigation & Business Law Can Help

At Feinstein Real Estate Litigation & Business Law, we represent developers, property owners, and investors in Florida zoning and land-use disputes, including cases involving the Live Local Act. Our team provides both proactive counsel and litigation support, helping clients navigate state pre-emption challenges, local opposition, and compliance with evolving statutory requirements.

We also offer mediation services to help developers and municipalities resolve Live Local Act conflicts before they escalate into costly litigation. As Florida continues expanding affordable housing policy through 2026, experienced legal representation will be essential to protecting your property rights and development goals.

Feinstein Real Estate Litigation & Business Law
501 E Las Olas Blvd, Suite 300, Fort Lauderdale, FL 33301
Phone: (954) 767-9662
Website: www.feinsteinlaw.net

New Flood Risk Disclosure Requirements in Florida (Effective Oct. 1, 2025): What Sellers, Landlords & Agents Must Know

Florida is expanding flood risk disclosure laws in 2025. Beginning October 1, 2025, sellers of residential real property and landlords entering into longer leases must provide new, more detailed flood disclosures to buyers and tenants. These changes bring higher transparency — and higher compliance risk.

What’s New & Who’s Covered

• Home Sales: A new statute (SB 948) amends Chapter 689, Florida Statutes, requiring sellers to disclose not just flood-insurance claims, but any known flooding damage during their period of ownership. The prior version required only claims and federal assistance; the new disclosure broadens that scope. See coverage from Florida Realtors.
• Residential Rentals: Landlords must provide a stand-alone Flood Disclosure form (not buried inside the lease) to prospective tenants in rental agreements of one year or longer, at or before lease execution. This obligation was added through HB 1015 / SB 948 analysis published by the Florida Senate.
• Developers and Others: The legislative package also extends flood-related disclosures to certain condominium, cooperative, and mobile-home sales, aligning developer obligations with the new rental rules.

Tenant & Buyer Protections / Remedies

• If a landlord fails to deliver the required disclosure and a tenant’s personal property suffers “substantial loss” (defined as damage equal to or exceeding 50% of fair-market value), the tenant may terminate the lease by written notice within 30 days of flooding. The landlord must refund prepaid rent for the remaining period. Details are available in the Florida Department of Revenue consumer guidance.
• Sellers who fail to comply may face claims of misrepresentation or breach of contract in a sales dispute, especially if flooding events occur later.

Key Steps for Compliance (Sellers, Landlords & Agents)

1. Use the updated, statutory or substantially similar flood disclosure form in all applicable sales and lease transactions. Florida Realtors has released new forms, including a “Lease Flood Disclosure (LFD-1)” to mirror statutory requirements.
2. Train agents, leasing staff, and property-management teams about the separate disclosure requirement and ensure it is delivered prior to or at lease signing.
3. Investigate the flood history of the property: review past insurance claims, FEMA records, disaster-assistance data, and county property reports to ensure accuracy. Resources can be checked via FEMA Flood Maps.
4. Keep signed copies of the flood disclosure in the transaction or lease file, with dated proof of delivery.
5. Adjust lease documents and listing packets to remove ambiguity and reflect the new statutory disclosure obligations.
6. Monitor renewals and new leases to ensure they comply with the law beginning October 1, 2025.

Implications & Risks

Inaccurate or omitted disclosures can lead to lease terminations, refund obligations, or litigation over misrepresentation. Sellers and landlords may face reputational damage and claims in closing or leasing disputes if flooding occurs later. Real-estate agents and brokers must include new flood-disclosure processes in their transaction workflows to avoid liability. Properties with a history of flooding will need to be priced and marketed accordingly, as disclosure requirements make risk more visible to buyers and tenants.

Feinstein Offers Mediation & Litigation Support

At Feinstein Real Estate Litigation & Business Law, we help sellers, landlords, tenants, and agents navigate Florida’s new flood-disclosure requirements. Our team assists clients in preparing compliant disclosure forms, resolving disputes over non-disclosure or rescission, and providing mediation services to resolve conflicts quickly and cost-effectively before litigation. When settlement isn’t possible, we represent clients in court to protect their property and contractual rights.

If you are preparing a sale or lease after October 1, 2025, contact us to ensure your documents meet state requirements and minimize legal exposure.

Feinstein Real Estate Litigation & Business Law
501 E Las Olas Blvd, Suite 300, Fort Lauderdale, FL 33301
Phone: (954) 767-9662
Website: www.feinsteinlaw.net

What Sellers, Buyers & Agents Must Know (Forms, Disclosures, Title Changes)

Florida’s 2025 legislative session delivered several significant real estate reforms—especially in the realms of disclosures, form updates, and title/permitting rules. For real estate litigators, real estate agents, and parties in transactions, staying current is essential to avoid contractual pitfalls and post-closing disputes.

Key Changes from the 2025 Session

Flood-Disclosure / Flood‐Damage Reporting (SB 948)

• As of Oct. 1, 2025, sellers of residential property must disclose Flood Risks and any past flood damage that occurred during their ownership.
• Landlords leasing residential property for one year or longer are also required to provide the existing seller flood disclosure to prospective tenants.
• Failure to provide truthful disclosure may give tenants a statutory option to terminate the lease and demand refunds of advance rents. Source: FOX 13 Tampa Bay

Revised Listing & Transaction Forms

• Florida Realtors released updated forms for residential, commercial, and vacant land sales, with clearer timeline provisions, adjusted terminology, and revised disclosure obligations. Florida Realtors
• These form updates are intended to reduce ambiguity over deadlines (e.g., inspection periods, delivery of docs) and align documentation with new statutory requirements.

New Title / Land-Use / Developer Regulations (SB 1080, Live Local Act Amendments)

• SB 1080 mandates that counties and municipalities clearly state the minimum information required for development permit applications, and shortens or standardizes local government processing windows. FOX 13 Tampa Bay

Impacts & Risk Areas for Stakeholders

For Sellers

• Enhanced liability: Sellers must be sure to disclose all known flood damage or risks. Omissions may lead to rescission, fraud claims, or damage awards.
• Greater scrutiny: Buyers’ counsel or title insurers will review disclosures carefully; errors or omissions now more defensible.
• Title / lien issues: Clarity in local permitting and developer obligations can reduce title clouds or delays in closings.

For Buyers

• Improved transparency: Buyers can better assess risk (especially in flood-prone areas).
• New options: The updated forms may provide more standardized protections in negotiation (inspection windows, contingencies).
• Insurance and due diligence: Buyers should verify that flood disclosures are accurate and consider independent flood risk or structural inspections.

For Agents & Brokerages

• Training challenge: Agents must be re-trained on new forms, deadlines, and required disclosures.
• Avoiding listing errors: Use of old forms or improperly worded clauses may expose liability or lead to contract rescission.
• Coordination with title / closing: Agents should work closely with title companies and attorneys to ensure newly required disclosures and developer notices are integrated in contracts.

For Litigators

• Contract claims: Expect disputes over whether disclosures were sufficient or timely.
• Title litigation: Developers or municipalities may be challenged over local permit or land-use regulation compliance.
• Rescission & damages: Cases will hinge on whether omitted facts were “material,” known to seller, and unavailable to buyer (the classic Johnson v. Davis doctrine in Florida) RASM

Strategic Tips & Best Practices

1. Update checklists & workflows
   Ensure all internal and client checklists incorporate the new flood disclosure, updated forms, and schedule changes.
2. Document disclosures and confirmations
   Maintain robust audit trails showing delivery of disclosures (timestamps, emails, signed acknowledgments).
3. Layer risk mitigation
   Use independent inspections or third-party reports when disclosures reveal potential issues (e.g. past flooding). Consider indemnity clauses.
4. Contract language precision
   Use clear fallback provisions for missing or late disclosures—e.g. allowing to back out, extending inspection windows, shifting risk.
5. Litigation readiness
   Preserve client communications (agent notes, emails) showing that sellers answered disclosure inquiries in good faith. Don’t rely on boilerplate disclaimers.

Contact Us

For assistance, feel free to contact our office and speak to a member of our legal team. 954-767-9662.