For those of you familiar with the extremely popular RBCA (lovingly referred to as “Rebecca” – and short for Risk Based Corrective Action) regulations that the Florida Department of Environmental Protection (“DEP”) adopted a few years ago to offer more flexibility in contaminated site cleanup, you should be keeping an eye on the revisions DEP is now proposing. Section 62-780 of the Florida Administrative Code, where RBCA is codified, has been making its way through the process for some major, and minor, revisions.

The most current and “final” version of the draft regulations was released on July 17, 2012 and can be accessed here. The most recent information indicates an expected adoption and effective date in October 2012. Some of the more important changes under the proposal include clarifying contamination reporting provisions and eliminating definitions to now refer only to statutory definitions.

In addition, DEP also released a Guidance Memorandum for Institutional Controls Procedures in June 2012. Major changes here include:

  • Unlike previous guidance, for all pending and future restrictive covenants, the property owner is not required to obtain a subordination of mortgage except in rare circumstances when a “material conflict” exists.
  • Likewise, property owners will not be required to obtain joinders and consents from other parties with a recorded interest in the property (i.e. easement holders, tenants with recorded leases, etc.) except in rare circumstances.

In the past, institutional controls have been known to take 1-2 years to get through the approval process. The new guidance document promises for a much more streamlined process which would drastically reduce the approval time to conceivably a matter of months.

For those in the regulated community, it is well worth your time to review these documents and provide any comments on the proposed RBCA changes to DEP staff at your earliest convenience.

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By now most everyone knows that a short sale occurs where the proceeds from the sale of a property are less than the debt owed on the property. Short sales have seen rapid growth recently as both investors and lenders turn to them as a way to maximize returns over foreclosure sales. As short sales have increased, so have short sale scams. Therefore, prudent homeowners, prospective buyers and real estate agents should be vigilant to avoid short sale scams.

Some examples of short sale fraud schemes include:

  • Flopping. When a property is flipped illegally, it is sold for an inflated value in order to obtain a mortgage in excess of the property’s real value. When the seller, who is often in on the scheme, is paid at closing, the difference between the actual selling price and the loan amount is split between the fraudsters. When a property is flopped, it is usually owned by an underwater borrower who has asked the lender to approve a short-sale at a price less than what is owed. In this scenario, the fraudster, which may be the owner, real estate agent, or both, supply one or more opinions of valuation that show the property to be worth significantly less than its actual fair market valuation. When the lender agrees to take the lower price, the fraudster purchases the property in his name or that of a straw buyer, thereafter flips the property to an arm-length purchaser at a higher price than the one negotiated with the lender, and pockets the difference. Like flipping, flopping is the intentional misrepresentation of a property’s true market value. However, whereas flipping usually takes place when housing prices are rising, flopping occurs when values are depressed.

Continue Reading Flip, Flop – Beware Short Sale Scams

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Tropical Storm Debby may have wreaked havoc for most Floridians, but there may be a rainbow after the storm that some permit holders can appreciate. When Governor Scott declared a state of emergency because of the storm by Executive Order, it triggered the permit extension provisions adopted by the Florida Legislature in its 2011 session, codified in F.S. 252.363.

This statute provides that the declaration of a state of emergency by the Governor tolls the period remaining for a permit or certain other authorizations for the duration of the emergency declaration (here, until August 24, 2012). Further, the emergency declaration extends the period for an additional 6 months on top of tolled period for the following:

  • The expiration of a development order issued by a local government.
  • The expiration of a building permit.
  • The expiration of a permit issued by the Department of Environmental Protection or a water management district pursuant to part IV of chapter 373.
  • The buildout date of a development of regional impact, including any extension of a buildout date that was previously granted pursuant to s. 380.06(19)(c).

The permit holder must provide written notification to the permitting agency within 90 days after the termination of the state of emergency of its intent to exercise the tolling period and identify the specific permit(s) subject to the extension. In this instance, the notification period will expire November 21, 2012.

It is important to note that this extension does not apply to:

  • A permit or other authorization for a building, improvement, or development located outside the geographic area for which the declaration of a state of emergency applies.
  • A permit issued by the Army Corps of Engineers.
  • A permit or other authorization determined by the authorizing agency to be in significant noncompliance with the conditions of the permit through the issuance of a warning letter or notice of violation, the initiation of formal enforcement, or an equivalent action.
  • A permit or other authorization that is subject to a court order specifying an expiration date or buildout date that would be in conflict with the extensions granted in this section.
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Most home purchase contracts allow the buyer to obtain a home inspection report, even if the Seller is selling as is, and Buyers are more likely to obtain a home inspection report than ever before, even when buying a home as is. So, what should you look for when you receive the inspection and what can you ask the Seller to repair?

  1. “As Is” Contract Negotiations. With the typical “as is” contract, the Buyer can obtain an inspection and usually back out of the contract if it is unacceptable, but the Seller is not obligated to make any repairs. However, if you have an “as is” contract, a home inspection report can give you the opportunity to negotiate Seller repairs, a repair credit, or a lower purchase price. 
  2. Monetary Cap on Repairs. With a typical contract that does require Seller repairs, there is usually a limit on how much money the Seller is required to spend (usually a percentage of the sales price or a fixed dollar amount), a limit on what constitutes a “defect”, and a clause which allows the Buyer to back out of the contract if the cost of repairing the defects exceeds the Seller’s limit and the Seller is unwilling to make repairs which exceed the limit.
  3. Defects. If done properly by a qualified person or company, the home inspection report will usually note every defect in a home, whether or not it constitutes a “defect” under the contract. The inspector’s job is to find everything that is or may be a potential problem, whether or not the Seller is obligated to fix the problem. 
  4. List Repairs by Seller. When reviewing a home inspection report, look at the sales contract language which deals with Seller repairs and highlight those items noted in the report which the Seller is obligated to fix. At a minimum, if your contract requires the Seller to make repairs, you should report these to the Seller and ask them to be made.
  5. Cosmetic Issues. Most contracts do not require a Seller to repair cosmetic items, such as peeling or chipped paint, paint stains, cracks in tiles or grout, or cracks in driveways. However, cosmetic items can be evidence of potentially worse problems, such as a paint stain being evidence of water damage which may be caused by a roof leak. Be sure to ask the inspector to advise whether a cosmetic item should be cause for concern. 
  6. AC Units and Appliances. Look at the remaining useful life of major components of the home such as AC units, and appliances. Often inspection reports now give an estimated useful life of these items. Even though most contracts do not require the Seller to repair or replace something that is working, if an inspection says the AC unit, or major appliances are likely to need replacement in the near future, that information may help you decide whether the home is worth the price you are paying.
  7. Roof. Be aware that some insurance companies are now requiring the roof to have at least five years of remaining life before they will insure the home. They may cancel your insurance after you have closed on the home if they do an inspection, their inspector determines that there is less than five years remaining, and you do not agree to replace the roof. Check with your insurance company before closing and ask what their requirements are. If they require information on remaining useful life of the roof, make sure your inspection report includes that and it satisfies your insurance company.

Bottom line: Home inspections can be a valuable tool in negotiating with your Seller or in deciding whether your dream home may become a nightmare.

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A recent decision from the Florida 4th District Court of Appeal illustrates some special land use concerns that come into play when the affected party holds a leasehold interest rather than fee simple ownership.

Changing Regulations Can Affect Leaseholders

In Village of N. Palm Bch. v. S&H Foster’s, Inc., 80 So. 3d. 433 (Fla. 4th DCA 2012), the plaintiff, as a leaseholder, operated an “after hours bar” in Palm Beach County which was permitted to serve alcohol for consumption on premises until 5:00 a.m. The owner of the property filed a petition to voluntarily annex the property into the Village of North Palm Beach. The statutory procedure for annexation required only the consent of the landowner and not the leaseholder. An existing Village ordinance prohibited the sale of alcoholic beverages for consumption on premises between 2:00 a.m. and 7:00 a.m., effectively depriving Foster’s of three hours of business it had enjoyed for many years while in the unincorporated county. After approval of the annexation, the leaseholder sought relief in court prohibiting application of the Village’s ordinance and allowing the bar to remain open until 5:00 a.m.

The Ruling

The trial court ruled in favor of the bar and found that the bar was “grandfathered” to operate under the old hours until its leasehold interest expired in 2015, but the appellate court reversed. The appellate court held that the Village had the authority to regulate the sale of alcohol within its borders pursuant to State statute, and that the Village properly followed the statutory procedure for voluntary annexation. Accordingly, the bar had to comply with the Village’s liquor sales ordinance, and was not “grandfathered” under the County’s old hours of operation.

Bottom Line

The case illustrates how leaseholders can fall through the cracks with regard to zoning and land use matters. The owner of the property often has the ability to proceed through rezonings, annexations, and similar procedures without the consent of the tenant, and notices of code violation and nearby pending zoning matters frequently are sent only to the owner of record. Drafters of leases may well want to consider addressing such matters during lease negotiations, particularly when representing tenants.

1986 gave us such memories as flocking to theaters to see Top Gun and Ferris Bueller’s Day Off, groaning as that ground ball rolled right through Bill Buckner in Game 6 of the Series, and conducting a comprehensive review of Lee County’s parking regulations. Ok, maybe not that last one so much, but those other events might put in perspective that such a review of the regulations is welcome news!

At its May Management and Planning meeting, the Board of County Commissioners heard staff’s presentation of major proposed changes to parking regulations in the county’s Land Development Code. The PowerPoint presentation given at that meeting can be seen here. Staff summarized the highlights of the proposed revisions, and provided illustrations of actual properties around the county and how the revisions would affect those specific properties. Staff also shared its expectation of presenting the proposed revisions to the various advisory committees before going back to the Board for final approval this Fall. 

Given the potential impact these revisions could have, it is definitely worth some time to review the proposals and voice your support or objection to staff and at the public hearings to provide input on the direction the regulations may take. Overall, the current proposals would mostly reduce parking requirements for non-residential developments. A summary can be viewed here.

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Commercial leases often contain the option of additional or “renewal” terms to extend the lease term. Reviewing and understanding this provision in your lease can help maximize your lease rights, whether you are the landlord or the tenant. This post focuses on the importance of a well-drafted renewal option provision, and the need to monitor critical deadlines.

Mechanics of Renewal Options

Understanding the mechanics of renewal options is important. Some parties prefer automatic renewals, while others favor the delivery of notice to exercise renewals. There can be one or more renewal options. Several factors can influence how to best structure the renewal option provision, such as current and anticipated market conditions, landlord concessions, tenant incentives, business planning, and your administrative ability to monitor deadlines, to name a few. 

Continue Reading Understanding Commercial Lease Renewal Options

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While 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

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In prior posts, we mentioned the basic timing of the property tax system in Florida. As a reminder, important dates to keep in mind are:

  • January 1: all property in the State must be assessed based on its condition on that particular date (I like to call this the “snapshot photo” date);
  • March 1: the general deadline to submit exemption applications;
  • July 1: local property appraisers generally have their values determined;
  • Mid-August: TRIM notices are mailed to inform property owners of their proposed assessment and tax bill for that year;
  • September: 25 days from the date of mailing the TRIMs, the appeal period expires if you want to appeal through the Value Adjustment Board; and,
  • November: taxes can be paid for the greatest discount.

Which begs the question, “what can I do now if I’m thinking about my property taxes but haven’t paid attention to these dates?” Here are 5 quick things you can be doing: Continue Reading 5 Things You Can Do Now to Prepare for 2012 Property Taxes

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In 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.