If a debtor moved or sold business real estate after you were owed money, you may be asking whether that transfer can be undone. Florida law lets a creditor ask a court to undo a transfer made to keep property out of creditors’ reach. This page explains how a fraudulent transfer lawsuit over commercial property in Florida works. It is written for business owners and creditors in Hillsborough County and the Tampa Bay area.
What a Fraudulent Transfer Lawsuit Over Business Real Estate Is
A fraudulent transfer lawsuit asks a court to undo or limit a transfer that was made to hurt a creditor. The property is often commercial, such as an office building, warehouse, retail or industrial parcel, or land held by a closely held company.
Chapter 726 of the Florida Statutes sets the rules. It defines “transfer” broadly. A transfer includes a sale, a deed, a lease, a payment, or the creation of a lien on property (§ 726.102).
A creditor is anyone with a claim, meaning a right to payment, whether or not a judgment exists (§ 726.102). That includes unpaid contractors and subcontractors, lenders, landlords, and other parties owed money by a business or its owner.
Transfers in these cases often move property between a company and its owners, a related company, or a newly formed entity. Florida law treats those insider and affiliate relationships as important, as explained below.
If a company you deal with recently moved or sold property you are owed money on, you may have a claim worth reviewing, and our team can talk it through with you. Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Actual Fraud and Constructive Fraud: The Two Theories Florida Courts Use
Business disputes can be resolved in several ways, and the right approach depends on the contract terms and the facts involved. Actual fraud turns on intent. Constructive fraud turns on value and the debtor’s finances.
- Actual fraud: the debtor made the transfer with actual intent to hinder, delay, or defraud a creditor (§ 726.105).
- Constructive fraud, present creditors: the debtor received no reasonably equivalent value (fair value in return) and was insolvent at the time, or became insolvent because of the transfer (§ 726.106).
- Constructive fraud, any creditor: the debtor did not receive reasonably equivalent value (fair value in return), and either was engaged or about to engage in a business or transaction for which its remaining assets were unreasonably small, or intended to incur, or believed or reasonably should have believed it would incur, debts beyond its ability to pay as they became due (§ 726.105).
Constructive fraud matters because it does not require proof of intent. Intent is often hard to prove directly, so the value and finance tests give a creditor another route. Lawyers often plead both theories in one complaint, so a court can reach the transfer under either one.
Real estate deals add a writing rule. Florida law bars an action on a contract for the sale of lands unless the agreement, or a note or memo of it, is in writing and signed by the party to be charged (§ 725.01). Fla. Stat. § 725.01 reads: “unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.” Promissory estoppel may not be used to get around that rule (DK Arena, Inc. v. EB Acquisitions I, LLC).
The Badges of Fraud Courts Look At
The statute lists factors a court may consider when deciding actual intent. The court may weigh these along with other factors (§ 726.105). They work as a guide, not a checklist.
- The transfer went to an insider. For a company, insiders include its directors, officers, and anyone in control of it (§ 726.102).
- The debtor had been sued or threatened with suit before the transfer.
- The debtor kept possession or control of the property.
- The transfer was disclosed or concealed.
- The transfer covered substantially all of the debtor’s assets.
- The debtor was insolvent, or became insolvent shortly after.
- The transfer came shortly before or after a substantial debt was incurred.
- The value received was not reasonably equivalent to the asset transferred.
- The debtor removed or concealed assets.
Business transfers often look ordinary on paper. A deed to a family member or a related company can match several factors at once. Courts examine the pattern, so a clear timeline of the transfer and the debt helps.
Remedies and Court Orders Available to a Creditor
A creditor can ask a court to set aside the transfer and to restrict the property while the case is pending. Which remedies fit depends on the facts, the property’s title history, and any judgment already in hand.
- Avoidance: subject to the limitations in s. 726.109, the court can set the transfer aside, to the extent needed to satisfy the creditor’s claim (§ 726.108).
- Provisional remedies: the creditor can seek an attachment against the property or other property of the transferee (§ 726.108).
- Injunction or receiver: subject to applicable principles of equity and applicable rules of civil procedure, the court can order an injunction against further disposition of the property, or appoint a receiver to take charge of it (§ 726.108).
- Levy: with a judgment, the court may order that the transferred asset or its proceeds be levied on (§ 726.108).
Timing affects these tools. Property can be sold or borrowed against during a dispute. Early requests for a court order can address that risk.
Filing Deadlines and the Process, Step by Step
Deadlines depend on the theory. Most claims must be brought within four years, and some must be brought within one year.
- Actual fraud: within 4 years after the transfer, or if later, 1 year after it was or could reasonably have been discovered (§ 726.110).
- Constructive fraud under § 726.105(1)(b) or § 726.106(1): within 4 years after the transfer or obligation (§ 726.110).
- Transfer to an insider for an antecedent debt, under § 726.106(2): the transfer is fraudulent as to a creditor whose claim arose before the transfer was made, where the debtor was insolvent at that time and the insider had reasonable cause to believe it. An action on this type of transfer must be brought within 1 year after the transfer was made or the obligation was incurred (§ 726.110).
If no action on a fraudulent transfer or obligation under ss. 726.101-726.112 is brought in time, the claim is extinguished. Venue is also a filing question. Actions are brought only in the county where the defendant lives, where the claim arose, or where the property is located, and this rule does not apply to actions against nonresidents (§ 47.011). When defendants live in different counties, any county where one of them lives may be used (§ 47.021).
- Gather the debt or judgment, the deed or contract, the recording history, and the entity records.
- Build a timeline of the transfer, the debt, and any demand or suit against the debtor.
- Choose the remedies to request, including whether to seek an early court order.
- File the complaint in the proper Florida court and serve the debtor and the transferee.
- Discovery follows, covering bank records, entity documents, the purchase agreement, and communications about the transfer. Motions, mediation, or trial come next. Timing varies with the court calendar and the complexity of the title and entity issues.
Why Ayala Law PA for Business Real Estate Transfer Disputes
Ayala Law PA focuses its practice on business and commercial disputes in Florida courts and arbitration. The practice areas include:
- Business litigation, commercial litigation, and contract disputes
- Shareholder disputes
- Construction litigation, including contractor and subcontractor disputes and lien foreclosure
- Real estate litigation and international trade litigation
Construction and real estate issues often sit alongside a transfer claim. Unpaid contractor claims, lien issues, and commercial title disputes can all involve the same property.
The firm serves businesses and entrepreneurs in Hillsborough County, Tampa, Brandon, Riverview, Plant City, Temple Terrace, and the wider Tampa Bay area. The firm’s only office is at 1646 W Snow Ave, Tampa, Florida. Some matters may be referred to another lawyer or firm.
Eduardo A. Maura is the lawyer responsible for this page. Related topics the firm covers include stopping a commercial property sale by injunction, correcting a wrong name on a commercial deed, and prescriptive easements on business property.
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Frequently Asked Questions About Fraudulent Transfer Lawsuits
Here are short answers to common questions about a fraudulent transfer lawsuit involving commercial property in Florida.
Do I need a judgment before I can challenge a transfer?
No. A claim is a right to payment, whether or not it has been reduced to judgment. A judgment matters later, because levy on the transferred property requires a court order.
Can I challenge a transfer to a new company the debtor formed?
The statute names transfers to insiders as a factor courts may weigh, while the venue rule for multiple defendants lets actions against two or more defendants residing in different counties be brought in any county in which any defendant resides (§ 47.021). It also defines affiliates to include a corporation at least 20 percent of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the debtor (§ 726.102).
How long do I have to file?
Most claims have a four-year deadline, and some have a one-year deadline. Because the clocks start from different events, check the timing early.
Will I get the property back?
A court decides what relief to grant based on the record. No one can predict that ruling in advance.
What should I gather before I call?
Have the deed or contract, recording information, the underlying debt or judgment, company records, and a timeline of the transfer and the debt.
Case evaluations are a fee-based service. If you are dealing with a transfer like this one, you do not have to sort out the timing and paperwork alone. Call (305) 570-2208 or request a case evaluation to talk through your transfer.
