Listen to this post

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 temporary waiver is now set to expire December 31, 2016 per Resolution 15-01-01. At the following meeting, held on January 20th, the BOCC adopted Ordinance 15-02 which allows a six-month grace period for building permits, mobile home move-on permits, or recreational vehicle park development order applications submitted by March 13, 2015 to receive the current 20% reduced impact fee rate so long as the permit is also picked up by close of business on September 11, 2015.

At its next meeting, to be held February 3rd, the BOCC will once again consider the issue of impact fees for the most significant of these votes as the 20% reduction nears sunset. If the BOCC makes no decision regarding this reduction, the 20% reduction established in Ordinance 13-06 will sunset per its terms on March 13, 2015. This would mean impact fees would begin imposition at the full rate on Monday, March 16. The BOCC could also choose to establish a new reduced rate of collection. County staff have recently recommended a collection rate of 85% for roads impact fees as well as a revised impact fee schedule. If a change to the impact fee collection rate is determined, staff is expected to bring that item back to the BOCC for a final vote with ordinance adoption at the March 3rd meeting.

Given the importance of impact fees to our community, the discussion at the February 3rd BOCC meeting is guaranteed to be rich and likely passionate. Additional information with supporting documentation can be found on the Recent Impact Fee Considerations page of the county’s website.

For any development permit holders interested in taking advantage of the two-year extension offered under HB 7023 (codified as Laws of Florida ch. 2014-218), there are some important rules to remember as the notification deadline of December 31, 2014 quickly approaches:

  • The permit you are seeking to extend must expire between January 1, 2014 and January 1, 2016;
  • The extension applies to approvals such as local development permits including development orders, building permits, DEP and environmental resource water management district permits;
  • The extension does not apply to approvals such as Army Corps of Engineers permits or consumptive use water management district permits;
  • If you have previously extended this permit under two (2) of the prior legislative extensions, for a total extension of four (4) years, you cannot utilize this extension provision; and
  • You must provide written notification to the agency who issued the permit by December 31, 2014 (some jurisdictions require a fee while others do not).

Many jurisdictions have information on this extension noted on their websites, or you may check with your consultant or attorney to determine if your permit is eligible for this extension.

Listen to this post

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

Listen to this post

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?

Listen to this post

Recent weeks have seen several developments with the condemnation of underwater mortgages. As reported by the New Jersey Spotlight, two new New Jersey mayors are moving in different directions on the underwater mortgage issue. In Newark, Mayor Ras Baraka plans “to employ eminent domain to take mortgages from the banks if necessary,” according to the New Jersey Spotlight. Meanwhile, Irvington Mayor Tony Vauss opposes the use of eminent domain to acquire underwater mortgages. Mayor Vauss’ stance contradicts Irvington’s previous position. In March 2014, the Irvington Township Council had approved a resolution calling for the Township’s Planning Board to prepare a plan to acquire underwater mortgages.

Continue Reading Update: Condemnation of Underwater Mortgages

Listen to this post

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?

Listen to this post

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 CAMS

Continue Reading Community Association Managers Should Proceed Cautiously

Listen to this post

Phase III of the Bonita Beach Road widening project may be dead in the water, at least for now. The Bonita Springs City Council has voted to withhold contributing any funds toward the widening of Bonita Beach Road from four lanes to six lanes between Old 41 Road and U.S. 41, according to the News-Press. 

Lee County and the City of Bonita Springs share the cost of funding for certain projects. Without the support of the City of Bonita Springs, the widening project’s status is in question.

Stay tuned to our blog for further developments!

House Bill 7037, recently adopted this past legislative session, expands the permitted practices of community association managers.

The bill, effective July 1, 2014, enlarges community association managers’ powers, some of which include:

  • determining the number of days required for statutory notices;
  • determining the amounts due to the association;
  • collecting amounts due to the association before the filing of a civil action;
  • calculating the number of votes required for a quorum;
  • negotiating monetary or performance terms of a contract subject to approval by an association; and,
  • drafting pre-arbitration demands.

Some members of the legal community have expressed concern that these new powers could constitute the unauthorized practice of law.

Under the Florida constitution, the Florida Supreme Court has the exclusive authority to both define and regulate the unauthorized practice of law. What constitutes the unauthorized practice of law has been partly defined as “[g]iving legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments.” Also included in the definition are activities requiring the interpretation of statutes, administrative rules, and community association governing documents.

Continue Reading Florida Legislature Expands the Legal Work Permitted by Community Association Managers

There have been some developments since the last blog post on the Homestead Road widening project. According to ABC7, funding from Lee County DOT is available for the project to proceed.

It is important to start planning now, as right-of-way acquisition may affect property owners along the segment of Homestead Road running from south of Sunset Boulevard to Alabama Road. If you are contacted by the Lee County Department of Transportation, you should contact an eminent domain attorney in order to assist you.

Stay tuned to our blog for further developments!