What is a PACE charge on a tax bill? This question just came up in the office. An agent was looking at a tax bill and it has a line item on it for a “FLORIDA PACE” in the non ad valorem assessments.
First, CLICK HERE to do the FAQ from the Palm Beach County Property Appraiser on PACE Assessments. Then CLICK HERE for the Palm Beach County information page.
PACE stands for Property Assessed Clean Energy. These are loans made by approved lenders AT 6-8% interest rate. The Palm Beach County Tax Collector collects the annual payments on these loans under the non ad valorem tax collection section of the tax bill and remits payment to the provider of the loan. These are often used by home owners to finance certain home improvements like new windows, an AC or solar panels and they run with the property as special assessments.
Now, the contracts that we Realtors use has a line item on it for which party will pay for this. The FAR/BAR As-Is Contract has a check box in paragraph 9(F) that:
If special assessments may be paid in installments (CHECK ONE): (a) Seller shall pay installments due prior to Closing and Buyer shall pay installments due after Closing. Installments prepaid or due for the year of Closing shall be prorated. (b) Seller shall pay the assessment(s) in full prior to or at the time of Closing. IF NEITHER BOX IS CHECKED, THEN OPTION (a) SHALL BE DEEMED SELECTED.
So, Buyer/Sellers and Realtors BE CAREFUL. Public body special assessments are something which we think of as being for a paved road or a sewer line extension in places like Jupiter Farms but the property this came up on is located in central Jupiter. AND, I was told that there is an argument to be made as to IF the language of the contract noted above would apply to a PACE charge. Toward this there IS a special rider to the contract for PACE charges like THIS ONE that spells out who is going to pay for this. Sellers this IS something which adversely affects the value and its not readily observable to a Buyer and thus it must be disclosed to a potential Buyer.
BTW, these liens are recorded in the pubic record in the full amount due, the annual interest rate, and the annual payments that the tax collector will place on the tax bill. This lien will also specify if it does, or does not, need to be paid off or collected upon the sale of the property.
