The US economy at a glance.

OK, So as a Realtor we are only allowed to fill in the blanks on pre-printed forms approved by the Florida Supreme Court.  I know that and the agents should as well.  That being said a Landlord (or a Tenant) may alter or draft any language they both agree upon.  The Florida Residential Lease for Single Family Home or Duplex states that it’s only valid for less than one year.  But why?  Well, I was told at a recent law symposium that the only difference is that in a lease for more than one year the signatures must be witnessed by 2 or more people.

“FS 689.01?How real estate conveyed.—No estate or interest of freehold, or for a term of more than 1 year, or any uncertain interest of, in or out of any messuages, lands, tenements or hereditaments shall be created, made, granted, transferred or released in any other manner than by instrument in writing, signed in the presence of two subscribing witnesses by the party creating, making, granting, conveying, transferring or releasing such estate, interest, or term of more than 1 year, or by the party’s lawfully authorized agent, unless by will and testament, or other testamentary appointment, duly made according to law; and no estate or interest, either of freehold, or of term of more than 1 year, or any uncertain interest of, in, to, or out of any messuages, lands, tenements or hereditaments, shall be assigned or surrendered unless it be by instrument signed in the presence of two subscribing witnesses by the party so assigning or surrendering, or by the party’s lawfully authorized agent, or by the act and operation of law. No seal shall be necessary to give validity to any instrument executed in conformity with this section. Corporations may execute any and all conveyances in accordance with the provisions of this section or ss. 692.01 and 692.02.”

I will assume here that we are talking about a typical scenario where the the Landlord will not be posting a surety bond.

In Florida, if a Tenant gives advanced rent then only the first and second rental periods (usually months) may be distributed to the Owner and ‘spent’ on the first day of the lease. The third period (month?), fourth etc., last period and security deposits must be held in a separate Florida banking institution.  The funds in this bank account must NOT be comingled with other funds of the Landlord.  AND, the Landlord must acknowledge the funds being held and notify the Tennant in which Florida banking institution the funds are being held.  The following sections of the statute apply:

• ‘FS 83.49?(1)Whenever money is deposited or advanced by a tenant on a rental agreement as security for performance of the rental agreement or as advance rent for other than the next immediate rental period, the landlord or the landlord’s agent shall either:?(a)Hold the total amount of such money in a separate non-interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord;’
• ‘FS 83.49 (2) The landlord shall, in the lease agreement or within 30 days after receipt of advance rent or a security deposit, give written notice to the tenant which includes disclosure of the advance rent or security deposit.’ And the name and address of the banking institution.

I use the following Notice which incorporates the required language of the statute….

This serves as Notice from the Landlord to the Tenant that the Landlord is holding [$x,xxx.xx] of advance rent or security deposit. These funds are being held in a non-interest bearing account at the following Florida banking institution: [INSERT NAME AND ADDRESS OF THE BANK]

YOUR LEASE REQUIRES PAYMENT OF CERTAIN DEPOSITS. THE LANDLORD MAY TRANSFER ADVANCE RENTS TO THE LANDLORD’S ACCOUNT AS THEY ARE DUE AND WITHOUT NOTICE. WHEN YOU MOVE OUT, YOU MUST GIVE THE LANDLORD YOUR NEW ADDRESS SO THAT THE LANDLORD CAN SEND YOU NOTICES REGARDING YOUR DEPOSIT. THE LANDLORD MUST MAIL YOU NOTICE, WITHIN 30 DAYS AFTER YOU MOVE OUT, OF THE LANDLORD’S INTENT TO IMPOSE A CLAIM AGAINST THE DEPOSIT. IF YOU DO NOT REPLY TO THE LANDLORD STATING YOUR OBJECTION TO THE CLAIM WITHIN 15 DAYS AFTER RECEIPT OF THE LANDLORD’S NOTICE, THE LANDLORD WILL COLLECT THE CLAIM AND MUST MAIL YOU THE REMAINING DEPOSIT, IF ANY.
IF THE LANDLORD FAILS TO TIMELY MAIL YOU NOTICE, THE LANDLORD MUST RETURN THE DEPOSIT BUT MAY LATER FILE A LAWSUIT AGAINST YOU FOR DAMAGES. IF YOU FAIL TO TIMELY OBJECT TO A CLAIM, THE LANDLORD MAY COLLECT FROM THE DEPOSIT, BUT YOU MAY LATER FILE A LAWSUIT CLAIMING A REFUND.
YOU SHOULD ATTEMPT TO INFORMALLY RESOLVE ANY DISPUTE BEFORE FILING A LAWSUIT. GENERALLY, THE PARTY IN WHOSE FAVOR A JUDGMENT IS RENDERED WILL BE AWARDED COSTS AND ATTORNEY FEES PAYABLE BY THE LOSING PARTY.
THIS DISCLOSURE IS BASIC. PLEASE REFER TO PART II OF CHAPTER 83, FLORIDA STATUTES, TO DETERMINE YOUR LEGAL RIGHTS AND OBLIGATIONS.

Well, it’s that time of year again.  The time of year we get the Notice of Proposed Property Taxes” in Palm Beach County and across Florida.  In Florida we pay our property taxes “in arrears” or for the previous year.  Thus, here’s the time line:

January 1st 2015 – Property values are set.  Thus, the 2015 valuation of your property is based upon it’s value on January 1 2015 and thus closed sales in 2014.

August 15th – The Notice of Proposed Property Taxes is mailed to all property owners.

September 14, 2015 – Last day to file a petition with the Value Adjustment Board to dispute any information on the Notice including the property value, exemption(s) given, etc.

November 1st – Property tax bills emailed.  Click here for information on the discounts given for prepayment of the tax bill.

OK, so after the sticker shock goes away look at the bottom half of the page at the value information.  This is the important part as for most of us it’s the only part of the bill we can dispute.  Keep in mind 2 important points when looking at this.  First, is this was the value at the end of 2014, NOT TODAY.  Values are going up again so think about what your property was worth last year not this.  Also, keep in mind that the Property Appraiser systematically under appraises all properties.  This is their attempt to reduce the volume of value adjustment board petitions.  They may deny this fact at first but look at their own web site.  Look up a property in say  North Palm Beach and then use their tax calculator with a value of 400k.  The proposed non ad valorem tax is $170 and the proposed millage rate is 0.22127.  The estimated non homestead tax bill is 7693.  Now take off the $170 of non ad valorem taxes and divide by the proposed millage rate of 22.127 dollars per 1,000 of appraised value.  The result of this math is a tax appraisal number of $340k or 85% of our 400k market sale.

Now, look at your market value and divide this number by 0.85.  The result is 117,647 per hundred thousand.  If the tax man thinks your “Market Value” is say 300k then they are really saying the sales in your area support a 352,941 valuation.  Now, the question becomes, do you think this is accurate.  If the answer is no then you need to apply for a Value Adjustment Board hearing BEFORE SEPTEMBER 14, 1015.

I have made application to the VAB before and been successful.  What I took away from the process is this:  Do not use bank owned sales or short sales.  They are allowed to disregard them.  And, you will be giving an argument to an appraiser, not a judge, lawyer or Realtor.  They operate like appraisers and expect a mathematical explanation of your position.  A great way to get sales data is from the PAPA web site and look at the aerial view of recent sales.

 

Mitigation discounts for homes built before the 2001 Florida Building Code (2001 FBC).

OK, theres some math involved here but Im going to try and simplify it.  Most of all Im going to apply some figures the determine if making improvements to a property in terms of reducing my insurance costs.

How can I reduce my Florida wind storm insurance costs?

In Florida, we get hurricanes.  And our insurance costs are high for things like wind storm coverage.  In short one can always do better when one shops the coverage among agents and carriers.  I live in an area where the only carrier is stills Citizens, and they offer ‘mitigation’ discounts.

What is a mitigation discount?  Well, it works like this.  Insurance is risk assessment.  First, what is the risk of a hurricane hitting our area?  Florida’s a big state and although Tallahassee is not immune to hurricanes we certainly see more in the southeast than they do.  But we can’t move the house.

OK, so what’s the risk of damage to an insured property?  It depends on how well built the property is, right.  If a property was built after the 2001 Florida Building Code went into effect then it assumed to have what is considered an above average construction.  For insurance purposes a home is assumed to have been built in accordance with the 2001 FBC if it received a certificate of occupancy after January 1 2002.  This is arbitrary and incorrect but it’s what they use.  The “2001 FBC” did not become law until October 2002.  Anyway, the difference in construction makes some sense for Florida as a state.  If a hurricane hits 2 properties right next to each other and one of them is newer then one would expect more damage to the older home.  Now this is a simplification but statistically speaking it’s true.  If one can buy a house built in accordance with the 2001 or later Florida Building Code then all that needs to be verified is the current condition of the roof.  If the roof has been replaced after the 2001 FBC then you’re all set.  Full discounts apply and you can do no better.

OK, But what if my home was built before the 2001 Florida Building Code went into effect?  Read this blog posting.  Citizen’s mitigation discounts for homes built before the 2001 Florida Building Code (2001 FBC).