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Lee County has taken several steps over the last few weeks to streamline the development permitting process and improve the regulatory “climate” for new businesses and development.

Land Development Code Amendments

 On February 12, the Lee County Commission approved a series of amendments to the Land Development Code (LDC) that were recommended by the Horizon Council, the County’s economic development and business advisory board. The changes include streamlining the “sufficiency review” process for projects undergoing rezoning, providing greater flexibility to the zoning director to administratively approve changes to approved projects that formerly required a public hearing for approval, and eliminating the 5-year lifespan for planned development master plans, making these plans valid in perpetuity. The amendments were approved unanimously by the County Commission, and received support from Lee County staff and the Conservancy of Southwest Florida.

Impact Fees

 At its Management & Planning meeting on March 4, the County Commission continued its recent discussions on suspending or adjusting impact fees charged on new development. As previously reported in this blog, the Commission initiated discussions earlier this year with consideration of a 2-year suspension of all impact fees in an effort to spur development and economic growth. During public input at a workshop and public hearing, issues arose regarding the effect of such a suspension on municipalities, the school district, the fire districts and the holders of impact fee “credits” that had been issued by the County for previous improvements and land donations. In light of these concerns, the Commission reviewed its options on March 4, and a majority of commissioners appeared to reach some consensus that a significant reduction of current fees, perhaps by as much as 80%, would ameliorate some of the concerns of a complete suspension and still have the desired effect on development. Fire and EMS impact fees would be exempt from this reduction. The Commissioners requested additional information prior to the next, and possibly final, public hearing on this matter scheduled for Tuesday, March 12 at 9:30 a.m. in Commission chambers.

Plan Amendment Cycles

 On March 5, the County Commission approved a change to its administrative code to remove the “once per year” cycle for amendments to the Lee County Comprehensive Plan. Plan amendment applications will now be reviewed and processed by Lee County throughout the year as they are submitted. Previously, plan amendment applications were processed only once per calendar year beginning on September 30, potentially causing delay for those projects that required a plan amendment and missed the September 30 filing deadline. This change follows statutory revisions enacted by the Florida Legislature in recent years to loosen the plan amendment process.

As always, we will continue to update you as developments in Lee County occur.

 

 

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I last updated you on January 29, 2013, letting you know that the Homeownership Protection Program Joint Powers Authority — the entity created by San Bernardino County and the cities of Fontana, California and Ontario, California to study, develop, and carry out the underwater mortgage condemnation plan — had decided to abandon any further consideration of the use of eminent domain to acquire underwater mortgages.  It’s time for another update!

As reported by The Wall Street Journal on February 13, 2013, “Economists from the New York and Boston Fed banks found that many homeowners in San Bernardino County in California . . . have benefited from other forms of help that reduced the burden they have endured since the financial crisis and recession sacked the value of homes in the area.”

The New York Federal Reserve Bank has posted the full report on its website.  The three authors of the report noted the following:

  • “First, the share of privately securitized mortgages that are still active five years after the beginning of the subprime crisis is relatively small.”
  • “Second, while a vast majority of these loans in San Bernardino County is severely underwater, the required payment (at least on the first lien) has decreased significantly for many of them.”
  • “And though these loans continue to enter serious delinquency at relatively elevated rates, things look much better than they did three to four years ago, in part because house prices have increased quite rapidly over the past year.”

The authors acknowledged that this falls under the plain English heading “good news.”

The authors went on to observe that “[w]hen evaluating the costs and benefits of policy options such as the use of eminent domain, these facts should be kept in mind.”  To me, this means don’t use a blunt instrument like eminent domain when market forces are beginning to stabilize the housing market.

Robert Hockett, the Cornell University law professor who is advising the company behind the underwater mortgage condemnation concept, welcomed the good news in the New York Federal Reserve Bank’s report.  Professor Hockett sounded “a few cautionary notes,” however, in his response to the New York Fed’s blog post. Click here for Hockett response.

The New York Federal Reserve Bank’s blog post is additional evidence that the use of eminent domain to try to solve the foreclosure crisis would be counterproductive.  Stay tuned to our blog for further updates.

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On Tuesday, February 12, 2013, the Lee County Commission unanimously voted to delay consideration of a proposed 2-year suspension of impact fees so that additional information could be provided regarding the effect of such a suspension on the County’s infrastructure budgeting.

Also of concern was the impact on the various municipalities within Lee County and the legal implications to those parties who have received impact fee “credits” for various land donations and improvements. The motion to defer the item, which was made by Commissioner Kiker and approved by the Board at the beginning of the public hearing, included a suggestion that the Board consider a “significant” reduction in impact fees as opposed to a suspension of all fees. Despite the motion for deferral, the Board proceeded to take public input on the proposed suspension for almost two hours.

The Board will take up these issues again at its March 4 Management & Planning meeting and then again at a public hearing on March 12.

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About six months ago, I wrote a blog post asking whether local governments would use eminent domain to condemn underwater mortgages or homes in Florida. Then, late last year, I updated the August 2012 blog post for the ABA’s Condemnation, Zoning & Land Use Litigation Committee, adding information about the actions of various political players and an analysis of the impact of condemnation of underwater mortgages or homes. In my December 2012 update, I also commented on the decision of the Homeownership Protection Program Joint Powers Authority — the entity created by San Bernardino County and the cities of Fontana, California and Ontario, California to study, develop, and carry out the underwater mortgage condemnation plan — to cancel its October 25, 2012 meeting because of an expected lack of quorum. If you read the post (go on, tell me you did!), then you may well remember that I mentioned that the next meeting of the Joint Powers Authority was scheduled for January 24, 2013.

January 24, 2013 has come and gone. The Joint Powers Authority met…and has decided to abandon any further consideration of the use of eminent domain to acquire underwater mortgages, as reported in The Wall Street Journal on January 25, 2013. But, as also reported in The Wall Street Journal article, thirty communities around the nation are still considering the use of eminent domain to acquire underwater mortgages. Indeed, according to The Wall Street Journal, the mayor of one of the cities that was part of the Joint Powers Authority — Fontana Mayor Acquanetta Warren — said that the city will continue to consider the use of eminent domain to address its foreclosure situation. As a result, the possibility remains that local governments in the United States will use eminent domain to acquire underwater mortgages or homes. Stay tuned to our blog for developments.

At the January 22, 2013 meeting, and after much public input and debate, the Lee Board of County Commissioners directed staff to draft an ordinance for its review at its February 12, 2013 meeting to initiate a one-year suspension on impact fees with the possibility to renew for another year (for a total of two years).

Fire and EMS impact fees will be exempt from this suspension. The Local Planning Agency will hear the impact fee suspension ordinance at its January 28th meeting. Commissioners also directed staff to establish criteria by which they can evaluate the effectiveness of the suspension after the initial one year term to determine whether to continue the suspension at that time or cease it. The issue of how to treat impact fee credits is also being examined by the County Attorney’s office. Those on all sides of this issue should be sure to continue monitoring these discussions.

 

Looking back at 2012, there are two memorable phrases that I frequently heard from clients: “I just need a simple lease” and “you are the best real estate lawyer ever to have lived.” This article will focus on the former statement for various reasons, one of which may or may not involve honesty.

“I just need a simple lease.” Interestingly, the remainder of the exchange tends to go something like this:

Please also make sure we have exclusivity, and oh yeah, we’re going to install some improvements which the landlord will pay for, and we may move into the adjacent space if it becomes available, and, one more thing, the rents should apply to the purchase price if we decide to buy the space.”

Simple enough?

The reality is that every lease transaction contains unique facts and circumstances, and each lease should be documented accordingly. For example, a lease for a single tenant building should be structured differently than for a multi-tenant building. A small business may be less equipped to handle certain lease administrative functions as opposed to a national chain. One size does not fit all in the leasing world, and an ounce of effort up front when drafting the lease can prevent significant uncertainty and dispute down the road.

It has been said that parties should approach a lease relationship similar to a marriage (which may hold some truth considering many landlord-tenant relationships can outlast modern marriages). Taking this analogy to its next logical step, the lease document is the prenuptial agreement – which allows the parties to memorialize their agreement at a point in time when they are both optimistic about the new relationship and willing to negotiate reasonably. Otherwise, it can be difficult to negotiate once the relationship experiences hardships or setbacks.

Unfortunately, I have seen too many instances where clients are governed by sloppy lease documents that do not give the parties the benefits of their initial bargain. Some of these instances involve what I suspect to be dreadful “internet forms.” Fortunately, simplicity can be achieved in most lease transactions, by striking the delicate balance of simplicity and effectiveness. Our role as real estate attorneys is to help achieve that delicate balance, to help our clients prosper throughout the lease term. The next time you are entering into a lease, it might be worthwhile to take a step back and give serious consideration to the possibility that your relationship with your landlord or tenant may change in the future, but the lease will remain the same. Of course, we hope that any change in the relationship is for the better.  

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Typical Troublesome Scenario

You have just found the perfect home and you are ready to sign the purchase offer. Either you failed to fully read the contract or your home state’s laws allow you the right to terminate the contract if you are dissatisfied with the home inspection, so you assume you have the same rights in Florida and happily sign the contract. The home inspection report later reveals problematic issues that prompt you to want to immediately terminate the contract, but you soon learn that the form contract you signed does not afford you with such right. Instead, you are now forced to proceed under a contract to purchase a home you no longer desire.

Florida Law

Continue Reading Buyer Beware: How To Avoid Purchasing An Unwanted Home After the Home Inspection

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In the past few months, several clients have contacted me with questions regarding property that had been obtained through tax deeds. For example, one client contacted me to discuss property that had been purchased from an individual who obtained the property through a tax deed sale two years earlier. At the recent purchase, the client had obtained an owner’s title policy; however, there was an exception to this policy for anyone claiming by, through or under the prior owner whose title to the property had been disgorged by the tax deed sale. My client intended to develop the property into a multi-unit residential complex and wanted to be certain that they could provide clear title to the eventual third-party purchasers.

Background

Prior to a property being sold at auction via a tax sale, several things must have occurred or, in some cases, not occurred. By way of example, let’s say that “Adam” is an individual who owns a 10 acre tract of vacant land in Lee County, Florida. After the 2008 real estate crash, Adam fell on hard times and failed to pay the 2008 ad valorem taxes due and payable on March 1, 2009. On April 1, 2009, the taxes for Adam’s property were deemed delinquent and the tax collector, as required by law, advertised Adam’s property (along with other delinquent properties) once a week for three consecutive weeks for the sale of a tax certificate on the delinquent 2008 taxes. Once the delinquent properties had been properly advertised, the tax collector established an on-line auction for a tax certificate for the delinquent 2008 taxes.

Continue Reading Tips for Understanding Tax Deeds and Tax Certificates

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The 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.

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It’s no secret that the U.S. economy remains in critical condition. Florida, along with several other states, suffered more than most during the recession, and Florida continues to suffer. Florida’s economic woes stem, in part, from the “foreclosure crisis” caused by people taking on more debt than they could afford when buying homes.  According to the August 9, 2012 edition of Gulfshore Business Daily, Florida had the nation’s third-highest foreclosure rate in July 2012. As reported by CNN, in some California communities, the unusually large number of foreclosures over the last few years has resulted in vacant homes, declining property values, and the corresponding loss of property tax revenues. The same holds true here in Florida and, in the absence of a replacement revenue source, local governments dependent on property tax revenues have had to cut costs and services to try to meet budgets. Faced with this situation, local governments in several parts of the country are considering the use of an unorthodox tool to solve the problems caused by “underwater” mortgages and homes — eminent domain.

It came from California…

Many people are familiar with the use of eminent domain to acquire private property for public use, such as the widening of a public road. The Wall Street Journal reported that San Bernardino County and two other California communities are considering the use of eminent domain to acquire home loans that are current, but “underwater.” (A home or loan is “underwater” if the amount owed exceeds the value of the home serving as collateral.) The City of Chicago, Illinois, and Suffolk County, New York have also considered use of eminent domain in this manner, though on August 14, 2012 Chicago’s mayor, Rahm Emanuel, announced his opposition.

How would it work?

Continue Reading Will Local Government Use Eminent Domain to Condemn Underwater Mortgages or Homes in Florida?