2014 Women Build TNR Team
Pictured above (from left to right) Tyra Read, Max Dean and Nancy Ramos (Ramos Builders), and Shawnmarie Pitts (The News Press)

One of my favorite events I look forward to every year is the Habitat for Humanity of Lee and Hendry Counties Women Build. Women Build is Habitat for Humanity’s nationwide program to empower women to take action against poor housing conditions by recruiting, educating and inspiring women to build and advocate for simple, decent and affordable homes in their communities.

According to the Census Bureau, more than 16 million children are living in poverty. The good news is that since the program began in 1998, more than 2,100 homes have been built by women crews in the United States. For Habitat for Humanity of Lee and Hendry Counties, this is the fourth year it has participated in Women Build.

Beginning in March of each year, women form teams to raise the money needed to renovate the homes. The women also physically renovate the homes, which are completed so they can be delivered to the families in May for Mother’s Day. This year, my team was comprised of members of the Cape Coral Construction Industry Association. We not only met our goal for the funds we pledged to raise, we also volunteered on various days to work on the home located in Cape Coral. The home was then officially dedicated to a wonderful mother, Vanessa Saez (pictured below), on May 10, 2014, just one day prior to Mother’s Day. There was an official Blessing of the Home, as well, at the dedication. It was an amazing experience!

2014 Women Build Homeowner
Tyra Read and New Homeowner Vanessa Saez!

Continue Reading Habitat Women Build 2014

TrustI receive many calls requesting assistance with conveying real property into a trust, whether it be a revocable trust, land trust or the like. Some people desire to hold title to their real estate in the name of a trust for estate planning purposes, which may include spouses attempting to equalize their estates. Other people desire to hold title to their real estate in the name of a trust so the beneficiaries of the trust are kept private. And other people elect to hold title in the name of a trust for no other reason than to avoid the need to probate their estate. All of these reasons are valid reasons to consider conveying your real estate into a trust. However, there are some things you should be aware of before proceeding with the conveyance.

Florida’s “Land Trust” Statute

First, here is a little history on Florida law known as the “land trust” statute. Under Florida law, legal and equitable title is vested in the name of the trustee and provides the trustee with the authority to act on behalf of the trust beneficiaries. This authority is typically stated in the deed conveying the property to the trustee. The benefit of this is that any person dealing with the trustee does not need to review the actual trust agreement and that person is protected from any action of the trustee, even if the trustee exceeded his or her trust authority. Anyone dealing with the trustee is assured the trustee has full authority to deal with the property and any claims between the trustee and the beneficiaries will not affect the transaction between the trustee and any third party.

Here are some factors to consider before deciding whether to convey your real property into a trust:

  • Is there is a mortgage encumbering the property? If so, you will need to determine if documentary stamp tax is due on the conveyance. Florida law provides that documentary stamp tax is due to the State of Florida on documents that transfer an interest in Florida real property. The current tax rate is $.70 per $100 (or portion thereof) of the total consideration paid, given, or to be paid or given, for the transfer (other than Miami-Dade County, where the tax rate is $.60 per $100 or portion thereof). If the property is mortgaged, tax is generally due on the outstanding balance of the mortgage encumbering the property. There are some exceptions to this rule that you will need to review to determine if documentary stamp is due on your conveyance.  If tax is due and you do not pay it, the State of Florida may impose penalties and interest on the conveyance and you may not be notified of this for several years after the conveyance.
  • Do you have written consent from the lender? You should also review the mortgage to determine if a conveyance into a trust is permitted, or if prior written consent is required from your lender. If the loan document requires prior written lender consent and you do not obtain the consent prior to conveying the property to a trust, this may be deemed an event of default and the lender may be able to accelerate the loan and foreclose on the property.
  • Condo and HOA Concerns. If the property is governed by a condominium, homeowners or property owners association, you should review the association documents to determine if association approval is required prior to your conveyance to the trust.
  • Florida’s Homestead Laws. If the property is your homestead (or if you anticipate the property will be your homestead in the future), you should review your situation as it relates to Florida’s complex homestead laws to determine if it is best to convey the property into a trust or continue holding title to the property in your individual name or with your spouse.

Bottom line: To avoid undesired and unanticipated consequences, it is always best to consult with a real estate attorney prior to conveying your real property into a trust.

ContractsAs a real estate lawyer, a significant part of my practice involves preparing and negotiating commercial and residential lease agreements. At times, however, potential clients may decide to find a sample lease agreement online, or have their realtor prepare the lease, to avoid attorney fees.

Proceed With Caution

Because most commercial leases are for 5, 10, or even 20 years, the length of time you will be bound by the lease terms warrants hiring legal counsel to look after your best interests. This is equally important in a residential setting, as housing costs are generally the largest monthly or yearly expenditure. From both the landlord’s and tenant’s perspectives, it is important to clearly and thoroughly set forth the terms of the agreement, whether it is a residential or commercial lease, to avoid disputes as to each party’s responsibilities and obligations. The most common issues that create disputes with lease agreements include:

  1. Condition of the property was not thoroughly investigated.
  2. Unclear language concerning the responsible party for maintenance and repairs.
  3. Unclear language as to the type and amount of insurance required to be obtained by each party.
  4. Notice and cure periods, as well as when late fees are triggered, are not clearly stated.
  5. The language is not clear as to how the tenant may exercise an option for the lease term to be extended, known as a renewal option, nor does the lease clearly provide the rent for the renewal option and what happens if the parties cannot agree upon the new rent amount.
  6. The lease was not signed as required by law or an authorized representative did not sign the lease.
  7. Language does not address who owns alterations or improvements made to the property.
  8. Unclear language as to if either party is obligated to repair or rebuild in event of partial or total destruction, or when a party has the right to terminate the lease in the event of destruction.
  9. Failure to clearly state the conditions to be satisfied for the security deposit to be returned to tenant.
  10. If tenant is given an option to purchase, the language fails to clearly provide the terms and conditions of said option and whether tenant’s deposit for the option is non-refundable.

Be extra cautious when negotiating a lease with an option to purchase. An option to purchase requires the parties to not only set forth the terms and conditions to lease the premises, but also requires all terms and conditions of a contract be discussed and clearly set forth in the lease. Often the option to purchase provision is not properly drafted and is a common cause for legal disputes.

Finally, commercial landlords should avoid using a previously prepared lease agreement for a new transaction, even if the agreement was prepared by an attorney. Not only is each transaction unique, but the laws may have changed since the previous agreement was drafted.

The value of thorough due diligence cannot be underestimated by either party before entering into a lease agreement. For instance, is the tenant credit worthy and has a background check on tenant been obtained? Is the landlord responsive when repairs are required? Is the landlord financially sound or is there pending foreclosure or other lawsuits against the landlord?

Keep in mind that once a dispute arises with a lease agreement, the attorney must work within the language in the lease agreement. It is more beneficial, and less costly, to hire an attorney to protect you before a problem arises. In the event a dispute arises, be sure to contact your legal counsel as soon as possible to protect your interests.

10.jpgLast month I wrote about the importance of due diligence before a contract is signed when purchasing commercial property. This month’s article discusses a buyer’s due diligence after the contract has been signed but prior to closing and taking title to the property.

As stated in last month’s article, a buyer must perform due diligence to ensure she is aware of all material facts concerning the investment property. The extent and scope of the due diligence differs with each property depending on the goal of the buyer. To this end, a buyer must first determine if she will be the end user or if she expects a return on her investment via an income stream from rentals? Will the property be held long term or short term? Is a business being purchased in conjunction with the real property?

Once you have signed a contract to purchase commercial property, you (the buyer) will need to revisit the questions set forth in my article last month and conduct a more thorough investigation of those matters. In addition, you must perform additional due diligence on the property prior to the expiration of the inspection period so the following questions can be answered:

  1. Are there any title concerns? A thorough review of the title commitment and all of the documents referenced therein is critical. Some title concerns may include: mortgages, liens, judgments or assessments against the property, probate issues, pending lawsuits or foreclosure suit. Although the contract will provide a buyer with a period of time for title review, the contract should be drafted so the title review period coincides with the due diligence or inspection period to provide the buyer with more flexibility.
  2. Are there any survey concerns? The survey should be ordered as soon as possible after the contract is signed and should be reviewed in conjunction with the title commitment. This allows you to determine if there are easements, encroachments or other matters that need to be addressed.
  3. Is there insurable access to the property? Many people believe that if there is a road to the property, access is not a concern. Actual access to the property is much different than insurable access to the property. If there is not insurable access, you may encounter problems in the future when you attempt to develop, finance or sell the property.
  4. Do current zoning and land use classifications allow you to use the property as you intend and what are the permitted uses for adjacent properties? You should request a zoning verification letter from the applicable municipality to obtain valuable information as to the pertinent zoning and code related matters.
  5. Are there any environmental concerns? To answer this question, a “Phase I environmental assessment” should be obtained. Depending on the results of the Phase I report, a Phase II environmental assessment may be required. Do not assume that because the property has never been used as a gas station, dry cleaning business or other type of business that has a higher likelihood of contamination that there are no environmental concerns with the property.
  6. Are there code enforcement liens, expired permits, unsatisfied development or easement obligations, unpaid municipal liens for such things as water, electricity, sewer or gas that may create potential legal liability for you, as the successor owner? Some code enforcement liens may attach to all property owned by that property owner and is not limited to the property that is in violation of the code. This is referred to as “cross attaching.” If the seller owns property with a cross attaching super priority code enforcement lien against one parcel and you purchase another parcel from the seller, the property may be subject to the lien.
  7. Are there any major issues with the building, roof, electrical, plumbing, fire sprinklers, elevator, HVAC, etc? You should obtain inspections so you can evaluate any repairs that may be required.
  8. Are there tenants? If so, carefully review each lease agreement to determine the landlord and tenant obligations, if the tenant has a right to purchase or relocate, if tenant has exclusivity, if tenant paid a deposit or advance rents. You should also obtain a tenant estoppel letter and rent roll.
  9. Are you purchasing a business along with the real property? If so, the business will have its own laundry list of due diligence matters you must investigate, which are beyond the scope of this article. Some real property related concerns you should consider are: what type of business or related licenses will be required, is a liquor license required, is outdoor dining permitted, is music permitted, is a drive-through permitted?
  10. How will you take title to the property? This should be determined before you close on the property to avoid incurring additional costs post closing, such as additional documentary stamp tax and related costs.

Bottom Line 

The above list is not exhaustive but illustrates the depth of due diligence that is required by a buyer concerning commercial real property. Yes, you may spend tens of thousands of dollars on due diligence investigations and ultimately elect to terminate the contract. That is the purpose of due diligence — so you can fully evaluate the property and the risks and costs involved should you purchase the property.

10.jpgA good portion of my practice involves representing buyers in commercial and residential transactions. Part of this representation involves advising my clients on due diligence matters pertaining to the property. Most of us know investigation of various real property matters is critical before purchasing commercial real estate. Do you also know your due diligence of the property should begin before you sign a contract to purchase? Due diligence is critical in your negotiations prior to signing a contract.

Because a lot of my clients come to me after they have signed a contract, I have decided to write about the importance of due diligence before and after a contract is signed to purchase commercial property. This month’s article discusses a buyer’s due diligence before signing a contract to purchase. Next month I will discuss a buyer’s due diligence after the contract has been signed but prior to closing and taking title to the property.

The reason a buyer must perform due diligence is to ensure he or she is aware of all material facts concerning the investment property and should begin before a contract to purchase is signed. The extent and scope of any due diligence differs with each property and the goal of the buyer. Is the buyer going to be the end user or is she going to expect a return on her investment via an income stream from rentals? Will the property be held long term or short term by the buyer? Is a business being purchased in conjunction with the real property?

Prior to signing a contract to purchase the commercial property, the buyer should obtain answers to some initial questions, including but not limited to the following:

  1. What is the real property being purchased? You need to know the legal description, street address and parcel identification or strap number. You should also obtain the size of the building and ascertain any fixtures that will be removed from the building prior to closing.
  2. Are there any development rights or obligations pertaining to the property?
  3. What is the physical condition of the property? You can ascertain this initially by either personally performing a visual inspection of the property (if you are qualified and knowledgeable with such matters) or requesting an inspector to perform a site visit with you to point out any obvious concerns with the property. This is useful information when you are negotiating with the seller prior to signing a contract to purchase.
  4. Is the current land use and zoning consistent with your plans for the property? It is important to remember that you cannot rely on the previous use of the property as being permitted in the future. Many times clients will say to me that they are certain they can use the property as they intend because their use is the same as the prior use. This is not always the case because zoning and land use regulations change with time. Therefore, it is possible the prior occupant’s use was grandfathered as a permitted use. Do not assume the previous use will be permitted in the future.
  5. Are improvements, changes or major renovations required to the property to be suitable for your intended use and what are the costs of these items?
  6. Does the property comply with Americans with Disabilities Act or is it exempt?
  7. Do you have sufficient parking?
  8. Are there any apparent encroachments or access issues with property based upon your visual inspection of the property?
  9. Are there any open permits?
  10. Are there any title concerns based upon an initial review of the official records website in the County where the property is located? I often perform an initial search of the public records for my client so I can advise them of such things as mortgages against the property, whether the mortgage amounts exceed the purchase price, if there are other recorded liens against the property and if there is pending litigation (for example, a foreclosure lawsuit). 
Bottom Line

Obtaining answers to these types of questions will assist you in negotiating a contract with the seller, as you will be able to identify some areas of concern that need to be further investigated or resolved.

The parties may elect to enter into a letter of intent to allow the buyer to perform his or her initial due diligence as discussed above with seller’s agreement to not enter into a binding contract with another buyer during said initial due diligence period. Keep in mind, however, that letters of intent can be drafted as either binding or non-binding. However, even if the letter of intent is drafted to be non-binding, it may include an obligation by both parties to negotiate the contract in good faith and with fair dealing.
Image Courtesy of Leo Reynolds on Flickr

I recently joined a collaborative effort with CapeCoral.com to provide insights on the Cape Coral real estate market, and contribute monthly to the “Breaking Down the Real Estate Market” special feature.

The CapeCoral.com March article, “A Look back at the 2012 real estate market, predictions for 2013,” shares insights and thoughts from three local real estate professionals for their opinions on past, current and future market trends, including:  

  • Realtor Erik Leitzes with Amerivest Realty, who represents buyers and sellers in Cape Coral, Fort Myers, Bonita Springs and Naples;
  • Realtor Andrew Mease with Keller Williams, who represents buyers and sellers with luxury properties in the Estero, Bonita Springs and Naples area; and,
  • Ed Ramos, Vice President of Ramos Builders, Inc., which has been serving Cape Coral and Lee County since 1991.
To read the full article, click here.


developer hard hat.jpgThe News-Press recently reported that the City of Cape Coral and Lee County are proposing changes to their land use and development regulations in order to be more flexible in how property is developed and redeveloped.

In the City of Cape Coral, new land use and development regulations concerning South Cape Coral were unanimously passed by the City’s planning and zoning committee in June. The new regulations are part of the 2030 Vision Plan and will remove obstacles, such as committee hearings and unpredictable requirements, to developers obtaining approval of their projects in hopes of saving months from the development and permitting timeline.

John Jacobsen, Executive Director of the Cape Coral Community Redevelopment Agency, stated there have been times when owners/developers have spent hundreds of thousands to millions of dollars on design and related fees, which could prove worthless if a committee rejects a developer at the last stage in the review process. The new regulations should eliminate unpredictable requirements and therefore, save developers time and money.

The Cape Coral City Council held a public hearing on the new regulations on August 20, 2012. A final public hearing is scheduled for September 10, 2012, when the Council will vote on the new regulations.

In Lee County, the Lee County Department of Community Development has been working on revisions to parking requirements for new developments in order to provide more flexibility to developers. The News-Press reported that Lisa Sands, advisor for Fort Myers-based VIP Realty-Commercial, stated “I’m pleased with the county working with the commercial real estate community and recognizing the need to change with the times.” The proposed changes will not only save developers money and provide them with more flexibility, but will also benefit the environment by decreasing the amount of impervious pavement required and therefore allow more water to seep into the ground.

A public hearing to approve the changes will be held on September 11 by the Lee County Board of Commissioners.

In our representation of developers and owners with development applications and due diligence matters, we have encountered situations where parking and development regulations have prevented the developer from pursuing the desired use of the property. I am hopeful the changes will facilitate more development in Cape Coral and Lee County, as development is needed for this area to continue to recover from the real estate downturn.

Our firm is available to assist property owners and developers with development and  due diligence matters, including development applications and permitting approvals.

Giving Alliance of Women volunteers.JPGWhile mothers across the country are hoping to receive flowers, cards or gifts on Sunday for Mother’s Day, a very special group of women will receive keys to a new Habitat home in Cape Coral. These moms are the recipients of a home built or rehabbed through Habitat for Humanity of Lee and Hendry Counties, Inc. (“Habitat”) Women Build project. Women Build encourages women to make a difference by building or rehabbing homes and helping Habitat with its home-building mission.

Habitat Women Build is a perfect fit for Giving Alliance of Women (“GAW”), a non profit organization serving Cape Coral, Florida since 1973. GAW is a component of the Cape Coral Community Foundation, consisting of a group of women involved with philanthropy in the Cape Coral community. These women, pictured above, formed a team and raised $5,000 to participate in Habitat’s 2012 Women Build.  (Front row, left to right: Tyra Read, Jennifer Coleman, Claire Avery, ToniRae Hurley, Rebecca Ross; back row: Tiffany Cleland, Mary Margaret Embroli-Swanson, Cindy Stratton.)

Continue Reading Habitat Women Build in Cape Coral, Florida – Helping Families and the Local Real Estate Market

Real Estate Upward Trend.jpgIn January 2012, I provided data showing improvement in the real estate market in the Cape Coral – Fort Myers, Florida area. There is even more positive news.

The News Press reports that Cape Coral – Fort Myers is 10th on a list of 101 housing markets showing improvement, according to an index released April 5, 2012 by the National Association of Home Builders. To obtain this rating, improvement in housing permits, employment and house prices for at least six months was required.

The good news does not stop there. Cape Coral – Fort Myers ranked 33rd in the Census Bureau’s list of the top 50 fastest growing statistical areas.

This is additional evidence that the real estate market in Cape Coral – Fort Myers is improving. As many of us have said recently, this area was the first to be burdened with a high rate of foreclosures when the real estate market declined. Now, this area is one of the first to see improvement in the real estate market and economy.

Not only have single family home prices increased, but inventory has decreased, spurring an increase in lot purchases in anticipation of new home construction. The return of single family home construction in Cape Coral will result in new jobs, increased wealth into the area and improvement in the economy.

The median sales price for Cape Coral and Fort Myers single family homes increased 20%, comparing November 2011 with November 2010 figures, according to the Florida Sales Report

Continue Reading Cape Coral, Florida, Looking Brighter: Real Estate Market Improving