This came up recently. The Evergrene HOA in Palm Beach Gardens as soo as a Property goes under contract they send out a representative to inspect the Property. If they find any violations then they send out a notice to the Owner AND they may even note it on the estoppel letter requested from the Closing Agent. Now what?

Noting the language of the base Far Bar As-Is Contract:

SELLER DISCLOSURE: Seller knows of no facts materially affecting the value of the Real Property which are not readily observable and which have not been disclosed to Buyer. Except as provided for in the preceding sentence, Seller extends and intends no warranty and makes no representation of any type, either express or implied, as to the physical condition or history of the Property. Except as otherwise disclosed in writing Seller has received no written or verbal notice from any governmental entity or agency as to a currently uncorrected building, environmental or safety code violation.

Unless Buyer exercises the right to terminate granted herein, Buyer accepts the physical condition of the Property and any violation of governmental, building, environmental, and safety codes, restrictions, or requirements, but subject to Seller’s continuing AS IS Maintenance Requirement, and Buyer shall be responsible for any and all repairs and improvements required by Buyer’s lender.

PROPERTY MAINTENANCE: Except for ordinary wear and tear and Casualty Loss, Seller shall maintain the Property, including, but not limited to, lawn, shrubbery, and pool, in the condition existing as of Effective Date (“AS IS Maintenance Requirement”).

From what I have been told and in my research assuming that the violations were in place as of the effective date then neither the base As Is Contract nor the HOA rider would provide the Buyer any recourse against the Seller to remedy any HOA violations.

The HOA recorded documents may however not allow a certificate of approval of the sale to be issued until the Property is brought into compliance and a certificate of approval is typically required by the Title Agent to prove compliance with the verbiage of the recorded documents that all sales be approved by the association.

So it looks like after years of kicking the can down the road congress is moving forward with BIG changes to the National Flood Insurance Program and it will affect Florida real estate. The new system is called “Risk Rating 2.0” and so far what I’ve heard I’m not a fan of it it for this reason: In a government subsidized program there should be transparency in how rates and premiums are calculated and this system is black magic that will be hidden behind the proprietary information veil of super secrecy.

The Congressional Research Service issued this report on Jan 2021.

Like it or not this IS being rolled out and is now set to take effect on 1 October 2021. They state from the web site for this program that…

“Risk Rating 2.0 will comply with existing statutory caps on premium increases. Risk Rating 2.0 will prevent significant premium increases by offering a glidepath discount to existing policyholders and new homeowners buying homes from existing policyholders.”

And the report linked to above notes a BIG thing for us…”Risk Rating 2.0 will not be able to increase rates faster than the existing limit for primary
residences of 5%-18% increase per year”.

WHAT DOES THIS TELL ME? IF YOU DO NOT ALREADY HAVE A FLOOD POLICY GET ONE. ONCE YOU HAVE THIS YOUR RATES CAN ONLY GO UP BY SO MUCH EACH YEAR.