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Florida’s vibrant real estate market and thriving tourism industry make it an attractive destination for property investors and landlords. However, with the allure of sandy beaches and sunny days comes a unique set of challenges for those in the rental business. From unpredictable weather to evolving legal regulations, Florida landlords must be well-prepared to handle a range of issues to ensure a smooth and successful rental experience. This article will focus on four challenges that confront landlords and guidance to manage them.
Continue Reading Navigating the Sunshine State’s Rental Landscape: Tips for Florida Landlords

When buying or selling a property in Florida, it is essential to ensure that the title is clear and free of any issues affecting ownership rights. Unfortunately, title issues can arise even after a property has been purchased, leading to significant legal problems. If you find yourself in this situation, it is important to understand the legal remedies available.
Continue Reading From Quiet Title Action to Breach of Warranty: Florida’s Legal Remedies for Title Issues

As a landlord, you’ve probably heard horror stories about tenants who refuse to pay rent, damage your property, or violate the terms of the lease agreement. These disputes can quickly escalate into costly lawsuits, leaving both parties frustrated and stressed. As a landlord, it’s crucial to be aware of the common disputes that can arise with tenants and take steps to prevent them from occurring. …
Continue Reading Navigating Landlord Tenant Disputes in Florida: 5 Common Challenges and How to Overcome Them

Lee County 50% Rule Changes To follow-up on my previous post, on November 8, the Lee County Commissioners considered several changes to facilitate repairs to buildings damaged by Hurricane Ian. The most significant changes involve how the “50% Rule” will be calculated.

The calculations for the 50% Rule along with other guidelines relating to the 50% rule are based on local regulation. Lee County Board of Commissioners were presented with and approved the following changes:

  • Allowing for a “permit-by-permit” valuation of the cost of repairs. The past County regulations required a cumulative consideration of improvements made over the previous 5 years. This change would not apply to “repetitive loss” properties that have received two or more NFIP payouts in excess of $1000 over a 10-year period.
  • Amending cumulative period for “repetitive loss” properties from 5 years to 1 year for 50% calculation.
  • Updating elevation requirements for manufactured homes in special flood hazard areas and coastal high hazard areas.
  • Amendment reflecting that the newest version of FEMA flood insurance rate maps for Lee County take effect November, 17, 2022.

Continue Reading Outcome of November 8 Lee County’s Meeting Regarding 50% Rule for Hurricane Ian Repairs

At its upcoming Special Meeting on November 8, the Lee County Commission will consider several changes to facilitate repairs to buildings damaged by Hurricane Ian.  The Local Planning Agency (LPA) will consider and make a recommendation on the proposed changes at its meeting on November 7.

The most significant changes involve how the “50% Rule” will be calculated.  The 50% Rule, required by FEMA as part of the National Flood Insurance Program (NFIP), states that repairs to damaged structures cannot exceed 50% of the value of the building unless the structure is brought into full compliance with current flood regulations, including minimum finished floor elevations.Continue Reading Lee County to Consider Changes to 50% Rule to Facilitate Hurricane Ian Repairs

contractsOver the last year, I have noticed an alarming trend where residential builders, realtors, and sellers enter into contracts for new construction that utilize the “As Is” Residential Contract for Sale and Purchase (commonly referred to as “FARBAR Contract”), which is a standard form contract published by the Florida Realtors and The Florida Bar. The FARBAR Contract is a valuable tool in most residential real estate transactions; it provides standardized terms governing a transaction as well as provides for the basic outline to get to closing.

While immensely valuable in the resale market, the FARBAR Contract is ill-suited for the new construction context. The primary reason for this seems fairly obvious, as the FARBAR Contract assumes that the home exists at the time the contract is entered into. As a result, the FARBAR Contract fails to address many issues that arise during the construction process.

The most common of these issues are construction delays, increases in the price of material, and financing contingencies. These issues combined with external factors such as supply shortages, labor shortages, governmental delays and increasing interest rates have highlighted the inadequacies of the FARBAR Contract in the new construction context in recent months.

Construction Delays

construction delayConstruction delays are simply not accounted for under the FARBAR Contract; again, the assumption underpinning the FARBAR Contract is that the home exists, and the seller’s performance merely requires delivering clear title, possession of the property at closing, and executing the necessary closing documents. Extensions are certainly common with the FARBAR Contract, but they often do not extend for months on end.

With new construction, supply and labor shortages and delays at the permitting office can mean delays that go on for months. This often leaves buyers frustrated and on the hook for alternate housing and storage throughout the duration of the delay. Rising interest rates also pose an issue with new construction projects. Delays in construction could result in a buyer’s interest rate lock expiring or require per diem payments to preserve the interest rate. Significant delays could mean thousands of dollars in per diem charges to avoid large jumps in interest rates.Continue Reading Inappropriate Contracting: Using FARBAR Form Contracts for Residential New Construction

The Florida legislature’s special session held this week resulted in new laws aimed to promote condominium building safety. Senate Bill 4D passed the House of Representatives and Senate each, and was signed into law by Governor Ron DeSantis on May 26, 2022.

The legislation comes nearly one year after the devastating partial collapse of the Champlain Towers South residential condominium in Surfside, Florida. Following the tragedy, Florida’s legislature grappled with proposed legislative during the regular session in March 2022, but the condominium building safety laws proposed ultimately were not passed at that time. The special session presented a second, and successful, opportunity to revisit these proposals. The new laws represent statewide and industry-wide efforts to prevent similar tragedies in the future by mandating a variety of preventative measures, including:

  • “Milestone inspections” of condominium buildings at least three stories in height must be performed when the structures reaches 30 years since its Certificate of Occupancy and every 10 years thereafter. For similarly situated condominium buildings that are within 3 miles of a coastline, the milestone inspection must be performed when the structure reaches 25 years, and every 10 years thereafter.
  • A “structural integrity reserve study” is now required to be performed at least every 10 years after the condominium’s creation for each building on the condominium property that is three stories or higher. The study must include the roof, load bearing walls, floor, foundation, fireproofing and fire protection systems, plumbing, and any item with a deferred maintenance or replacement cost that exceeds $10,000.00.
  • Furthermore, Members cannot opt-out of the mandatory funding of reserves for structural integrity components, regardless of a membership vote approving same.
  • Requiring inspection reports and studies to be kept as Official Records and available and published to Members.
  • Clear developer requirements for building inspections, structural integrity reserve study, and funding requirements prior to transition to the residents.
  • Engagement of the Florida Department of Business and Professional Regulation and local municipalities to track condominium buildings and the inspection reporting.

While the legislation presents new requirements from the current regulations, it is not the first time that inspections have been required by the Condominium Act. In 2008, House Bill 995 was adopted, requiring inspections for three-story condominium buildings every 5 years, though a majority of voting interest could opt-out of this requirement. That law was later repealed in 2010; at that time, many advocates for repealing the law cited reducing fiscal costs in the wake of the Great Recession.

When does the new law take effect?

Continue Reading New condominium building laws adopted in Florida seek to prevent future Surfside tragedies

Leaving Real Property to Loved OnesOwning real property has always been a staple investment vehicle for people throughout history. One attractive feature of investing in real property is that it may also double as a Homestead. In other cases, real estate investments may be rental, commercial or recreational (i.e. your log cabin or private island).

Whatever the case may be, it is important to understand that real estate can be owned in several ways, each of which has important legal consequences when it comes to leaving it to your loved ones upon death. Failing to understand how you legally own your property and how it will be passed on to your loved ones can lead to unintended, and often unforeseen consequences.

Outright Gifts at Death

  1. Gifts In Your Will. Leaving real property to someone at your death can be accomplished via your Last Will and Testament. Your Estate Planning Attorney can help you create the proper testamentary language to direct that ownership of a certain parcel of property be transferred to your chosen loved one(s). This method is very straightforward and initially, often less expensive than other options. However, making this kind of gift in a Last Will and Testament usually requires the person in charge of your estate when you die (the “Personal Representative”) to submit your Last Will and Testament to the probate court and begin the probate process to transfer the asset pursuant to the terms of your Last Will and Testament. Probate can be expensive, public and time-consuming.
  2. Gifts from a Trust. Many Revocable Living Trusts are designed to serve as a substitute for a Last Will and Testament by directing who among your loved ones should receive certain items of property at your death, including real estate. The Trust, similar to a Will, can also distribute your real property to your loved one(s) pursuant to your wishes. However, the Trustee, instead of your Personal Representative will transfer the property to your designated recipient privately during the Trust Administration. One of the primary benefits of a Trust is that, as long as you transfer your property’s title to the Trust before you die, the Trustee will have the necessary power to make the post death transfer to your intended beneficiaries. Probate will be unnecessary, saving your estate and trust beneficiaries significant costs and delay.
  3. Gifts Using Enhanced Life Estate Deeds. A number of states have passed laws that allow property owners to record with the local land records office, a deed that transfers the title automatically (without the need of a probate court) to a named beneficiary at the death of the original land owner. This method for transferring real estate outright to the person whom you intend to receive it at your death can be very simple and cost-effective. Not every state allows this type of transfer, so it is important to check your state laws or consult with an attorney knowledgeable in this area before attempting to use such a tool. Florida has a unique type of deed, named the “Enhanced Life Estate Deed” (a/k/a “Lady Bird Deed”), which allows for this type of title transfer.

Gifting Real Estate to Multiple Individuals

Continue Reading 7 Ways to Leave Real Property to Loved Ones

grandparents homeThe short answer to this question is no. Naming your child as the recipient of your home in your will does not give them any right to your home while you are still living. However, understanding why requires a little more explanation.

Title Is Key

When it comes to real property such as a house, the person who has title to (or legal ownership of) the property controls the property. The title holder (owner) can lease, mortgage, refinance, sell, gift, or do anything else with the property. When you purchased your home, you received title to it through a deed. This deed proves you are the owner and you have all rights to your property.

A Will Is Effective Only upon Your Death

Continue Reading If I Give My Home to My Child in My Will, Can They Take My Home While I Am Still Alive?

Henderson Franklin was again honored to sponsor 2022 Market Trends, which took place on March 16, 2022, with speakers Randy Thibaut, founder of Land Solutions, Inc., Denny Grimes, President of Denny Grimes & Team at Keller Williams Realty, and Justin Thibaut, CEO of Land Solutions, Inc.

The presentation discussed the current conditions of the real estate market in Southwest Florida and provided a future forecast about what the market may look like in the coming year. The presentation also focused on the primary areas of the real estate sector: residential development, resale properties, and the commercial market.

Overall, the end of 2021 was a continuation of the rapid growth that comprised 2020 and 2021, as waves of new residents and businesses entered into the market. All sectors of the market are currently seeing growth, but nowhere is this more evident than with residential development and resale, as low inventory coupled with high demand has prompted price fairly dramatic price increases across the three counties of Lee, Collier and Charlotte. The ultimate question, however, will be whether this will continue or will the market begin to decline as prices continue to creep up higher.

Residential Development

real estateIn 2021, Southwest Florida saw a 47% increase in new single-family residential permits issued amongst the three counties, with Lee County seeing the highest increase of 59%. Total residential permits increased 39% percent to approximately 25,000 permits. These percentage increases, while dramatic, still pale in comparison to the number of permits issued in 2005, which numbered around 44,000 permits prior to the crash in 2008. Similarly, multi-family residential permits increased by 19% over the last year.

These numbers illustrate that low resale inventory is driving up the prices, leading buyers to seek new construction and rental properties. Presently, the current inventory of resale properties cannot match the demand of new homebuyers entering the market, leading to homes rising in value by as much as 77% in some areas over the last year.Continue Reading The Pulse of Southwest Florida Real Estate: A Recap of 2022 Market Trends