Henderson, Franklin, Starnes & Holt, P.A.

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In an April 9, 2015 post, Scott Beatty gave some great tips to owners on how to avoid paying twice for labor, services, or materials provided on a contraction job. This post looks at another facet of the same issue and provides tips to lienors on how best to preserve and enforce their lien rights on a construction job.

Although Florida’s construction lien law is dense, nuanced, and rife with pitfalls, adherence to the following steps will cover your necessary bases in the vast majority of situations where you are working on private/non-government owned property:

Before You Begin Work

Continue Reading Checklist to Preserve and Enforce Your Lien Rights

In April of last year, David Fowler shared a post about a seller’s obligation in a residential sale to disclose facts or conditions about the property that have a substantial impact on its value or desirability, and that are not easily observable to a buyer. As the post outlined, most of the disclosures are property specific, like the presence of mold or wood destroying organisms, or whether essential components of the home, such as the roof, plumbing or HVAC, are in disrepair. Sellers typically inform buyers of these conditions in a disclosure form usually provided by the seller’s real estate agent. There are, however, other disclosures required by Florida law that are equally as important to a buyer in making an informed decision whether to purchase a home.

Here are some of those disclosures that parties involved in the sale of a residential home should also be aware of:

Homeowners Association and Condominium Association

Continue Reading Important Reminders Regarding Disclosures

The homestead application filing deadline of March 1 is approaching quickly. Below is a snapshot of eligibility and documentation requirements for real property owned in Lee County, Florida.

What is the Homestead Exemption?

The homestead exemption is a constitutional benefit of up to a $50,000 exemption deducted from the assessed value of the property.

Who Is Eligible to File for an Exemption?

Individuals whose names appear on the deed, who reside on the property as of January 1, and who are bona fide Florida residents as of January 1 are eligible to file. To be eligible for the exemption this tax year, an owner must file an Application for Homestead and related documents with the County Property Appraiser no later than March 1, 2015. Only new applicants or those who had a change of residence are required to apply. For individuals who have previously filed for and been approved for the homestead exemption, notices of automatic renewals should be received from the Lee County Property Appraiser in January of each year.

Lee County’s Application Requirements

Continue Reading Homestead Deadline Approaching for Lee County Landowners

The Lee County Board of County Commissioners (“BOCC”) is kicking off 2015 with substantial consideration of impact fees, with viewpoints expressed by stakeholders on both sides of the issue. At its January 6th meeting, the first of 2015, the BOCC voted to extend the change-of-use impact fee waiver for an additional two-year period. This…

Since the real estate meltdown which began in 2006, many condominium and homeowner associations have struggled with a significant increase in delinquent assessments. Any money received by an association from a delinquent owner helps, and many associations were willing to work out payment plans with such owners.

Many of the delinquencies were the result of the large number of foreclosures in many communities and the time lenders were taking to complete the foreclosure. Often, many years passed while a home was in foreclosure and usually the assessments were unpaid during the entire time. While the situation is improving with the recovering real estate economy, there are still thousands of pending foreclosures in Florida and many owners still delinquent in assessments.

Sometimes a condominium or homeowner association can look to the new owner for payment of all outstanding delinquent assessments. (When and if an association can bill the new owner is beyond the scope of this article.) Sometimes the new owner may not know they can be liable for all past due assessments.Continue Reading “Let’s Make a Deal”: Dangers of Condominium and Homeowner Associations Accepting Partial Payments for Delinquent Assessments

Many clients come to us when they purchase a condominium or home for investment income. One of the questions that often arises is whether they should hold their investment real estate in a separate legal entity for tax and liability purposes.

Our recommendation for most clients is that they should consider the formation of a Florida limited liability company (LLC). A Florida limited liability company offers the liability protections most often associated with a corporation, while have the tax attributes of holding the property in your individual name.

In an LLC, each owner holds a “membership” interest, often described as “units” or “percentages” that define their individual ownership, much in the way that a corporation is owned by shares of stock. The LLC should have an Operating Agreement setting forth the terms and conditions (think of them as “rules”) of ownership. There are many options in deciding what should go into an Operating Agreement. You should discuss these options with your attorney when creating the LLC.

Protections of an LLC

Continue Reading Should I Form an LLC for My Beach Rental?

With property values consistently trending upward, many Florida business owners are deciding whether to purchase or lease commercial real property. Below are a few considerations to keep in mind before making your decision.

Cost of Borrowed Funds

While there has been a stream of positive news about the general health of the economy, the Federal Reserve has kept interest rates considerably low. Therefore, it is an attractive interest rate environment for commercial borrowers who are financing real property. Depending on the term of the loan and type of property, current rates range from 3.50% to 6.50%, while prime rate (a barometer for different types of interest rates and the rate which financial institutions lend to their most prominent and creditworthy customers) remains at 3.25%. To put this into perspective, prime rate was 8.25% in 2007. Lower interest rates obviously lower the monthly payment obligation, and can accommodate a move to a higher tier property.

Judged against lease terms, the comparison changes depending on whether the owner is leasing for use as retail or office space. The former is generally based on a percentage of gross sales generated at the site, the latter normally contains an “escalation clause” that annually increases the rent obligation by 2-3%. Additionally, a commercial tenant (particularly a retail tenant) is likely liable for the real property taxes, utilities, and other expenses, which negates some of the perceived advantage that leasing may have over ownership.

Thus, a lease payment may initially have a lower payment burden but over time could exceed the payment obligation of a loan.

Beyond the Financing

Continue Reading Should I Buy or Lease Commercial Property?

In reference to some new roles of community association managers authorized by House Bill 7037, which became effective on July 1, 2014, the website, flcamtest.com directs some wise words to Florida community association managers: “As a practical tip, just because you are a CAM and CAN do those task [sic], does not mean you SHOULD do those tasks.”

Required Notices

Community associations, including condominium, residential homeowners’, and cooperative associations, are required to provide written notice to owners who are delinquent in the payment of association assessments prior to filing a lien against the delinquent owner’s property, and prior to foreclosing on the lien. While the statutes previously required certain information to be included in such notices, they now include actual forms that must be used for the notices, as well as a form for the release of the liens.

New Authorized Tasks for CAMSContinue Reading Community Association Managers Should Proceed Cautiously