Litigation

Quasi Public Records

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: When can private entities working in concert with the government be subject to public records requests?

A: A Florida appellate court recently reversed a trial court’s ruling that the Space Coast’s Economic Development Commission is subject to public records laws. Florida has made great strides to bring the government “into the sunshine” with rules that sweep even certain casual encounters between government officials into the “open meetings” category and pull certain semi-private entities into public scrutiny. The Attorney General’s Office has spoken as to economic “councils” being within the purview of public records laws when they serve, as they generally do, an advisory role to the government.

It therefore surprised some when the appellate court reopened the question as to whether an economic development commission must respond to public records requests. The real reason for reversal was that the trial court applied the wrong test. The trial court used a “delegation of functions” test to determine that economic development activities having been delegated to the commission made it as though the commission was stepping into the shoes of the government. Where there is clear and complete delegation of function, the court said, the private agency is subject to public records laws. The appellate court did not reject that test but said that the test was misapplied, because the commission was left without some economic development functions, such as job training, and could not make binding decisions on tax incentives and abatements.

Absent complete delegation of function, the appellate court held that a “totality of factors” test applied. Factors include public funding (in this case, about half of the entity’s budget), commingling of public and private funds, conducting of business on public property, whether the services are integral to governmental decision-making, performance of a function the government would otherwise perform, extent of governmental control over the entity, creation of the entity by the government, substantial financial interest in the entity by the government, and operation of the entity for the public’s or government’s benefit. Undoubtedly, some of these factors appear to weigh in favor of treating an economic development commission as public enough to respond to public records requests. But the fact that the commission at issue received substantial investor funding, sat dozens of investors and few governmental appointees on its board and committees, and lacked final decision-making power for much of its advisory role made the appellate court question whether the public records laws applied. Absent a rehearing or another appeal, the trial court will now have to apply the totality of factors test to determine whether the commission is public enough.

When a quasi-public entity refuses your requests for public records, it is important to conduct an investigation, often with the assistance of an attorney, as to whether there is a good argument that the refusal is unwarranted, in which case you could have remedies to pursue in court.

 

The December 3rd edition of “The Law” will cover end of year tax tips.

Questions can be submitted online to thelaw@clarkcampbell-law.com.

What is a Land Trust

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Should I use a land trust when purchasing property?

A: Land trusts first appeared in the United States in Illinois in the 1890s. Land trusts were codified in Florida law in 1963. During the past few decades, land trusts have grown in popularity among real estate investors purchasing property.

A Land Trust Agreement creates a land trust and vests title to real property in a trustee by a publicly recorded Deed conferring on the trustee certain powers and authority.

The buyer is the beneficiary of the land trust and chooses the trustee. Usually the buyer’s close friend, family member, business associate, or attorney serves as the trustee. Pursuant to the Land Trust Agreement, the beneficiary retains the power of direction to instruct and direct the trustee to act in accordance with the beneficiary’s wishes, and the trustee serves in a ministerial capacity.

A buyer may choose to use a land trust to keep his name out of the public records. The Land Trust Agreement can be kept confidential and prohibit the trustee from disclosing the details of the Land Trust Agreement without the beneficiary’s consent or court order.

In a land trust, the interest of the beneficiary is usually treated as personal property. This allows for easier transfer of the beneficiary’s interest by way of an Assignment of Beneficial Interest without the need for witnesses and public recording of a Deed.

A buyer may choose to use a land trust for liability avoidance reasons as well. According to law, the beneficiary of a land trust, solely by being a beneficiary, is not personally liable for any judgment, decree, or court order for a debt, obligation, or liability of the land trust.

If there are multiple buyers or a group of investors, each buyer or investor may own a percentage of the beneficial interest in the land trust property, and beneficiaries may own their interests as tenants in common, joint tenants with right of survivorship, or tenants by the entireties (i.e., husband and wife). Corporations, limited liability companies, and limited partnerships may also be beneficiaries under a Land Trust Agreement. In the event there are multiple beneficiaries, a Beneficiary Agreement should be implemented to govern the relationship among the beneficiaries in the event there is a disagreement or a beneficiary passes away.

The November 19th edition of “The Law” will review the standards and recent case law regarding whether private entities that work in concert with the government are subject to public records laws.