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In 2010, the chapters of the Florida Statutes governing condominiums and homeowners associations were amended with the intention of providing community associations significantly more “teeth” to enforce collection of assessments from delinquent owners. Unfortunately, the new provisions contained several glitches which resulted in confusion for associations, owners, and community association practitioners. House Bill 1195 became effective July 1, 2011, with intent to remove such glitches and clarify provisions passed in 2010.

Prior to 2010, a homeowners’ association was permitted under Chapter 720 of the Florida Statutes to suspend an owners’ right to use common areas and facilities for the violation of provisions of the association’s governing documents. The statue did not provide such a remedy for past due assessments. One of the glitches of the 2010 legislation unintentionally resulted in the removal of the ability of a homeowners’ association to suspend an owner’s rights to use common areas and facilities for violations of the governing documents. However, the right to suspend common area use rights was added as a potential remedy for nonpayment of monetary obligations owed to the Association which are more than 90 days delinquent.

For condominium associations, prior to the 2010 legislation, suspension of common element use rights was not provided as a remedy in the statutes at all. The 2010 legislation provided for suspension of common elements and facilities as a potential remedy only for 90 day delinquencies, not for other violations of the governing documents. However, the statutory provisions providing for the hearing procedures required for suspending use rights, did reference the availability of common element use suspension as a remedy for other violations. These procedural provisions raised questions as to whether the right to suspend use of common elements and facilities was available for violations other than monetary delinquencies.

Homeowners’ Associations Right to Suspend

With the passing of House Bill 1195, a homeowners’ association may suspend the right of a member, or the member’s tenant, guest, or invitee, to use common areas and facilities both for failure to comply with any provision of the governing documents and for nonpayment of

Continue Reading Community Association Ability to Suspend Use and Voting Rights Clarified

In my household, a letter from the county property appraiser or the county tax collector is typically met with a “what-now” groan because it’s rare for good news to come from those offices. If you’re an agricultural land owner, you may have recently received such a letter from your local property appraiser notifying you that your agricultural tax classification for the 2011 tax year has been denied. And while a groan may be the proper response, tossing this letter in a pile and ignoring it is not – because you now only have 30 days to appeal this denial to the county’s Value Adjustment Board.

An agricultural classification can save a property owner tens of thousands of dollars in property tax owed to the local government, and according to the Lee County Property Appraiser’s Agricultural Division, agricultural classification denials for Lee County were mailed on or about June 27, 2011. Typically, the rationale for denial is that the property is not being “used primarily for bona fide agricultural purposes” as required by F.S. 193.461(3)(b). Any appeal of this determination must be timely filed, and evidence and testimony must be presented at a hearing to support the contention that a bona fide agricultural use existed on the property as of January 1, 2011. The statute sets forth 7 factors to be considered in determining whether a “good faith commercial use of the land” was in place:

  1. The length of time the land has been so used.
  2. Whether the use has been continuous.
  3. The purchase price paid.
  4. Size, as it relates to specific agricultural use, but a minimum acreage may not be required for agricultural assessment.
  5. Whether an indicated effort has been made to care sufficiently and adequately for the land in accordance with accepted commercial agricultural practices, including, without limitation, fertilizing, liming, tilling, mowing, reforesting, and other accepted agricultural practices.
  6. Whether the land is under lease and, if so, the effective length, terms, and conditions of the lease.
  7. Such other factors as may become applicable.

These appeals can become extremely complicated, and without the presentation of competent, relevant evidence and testimony, a property owner’s chances of success can be very low. So, if you tossed that denial letter in a “to-do” pile, dig it out and consider whether you would like to appeal the denial. The filing fee to appeal the denial is as low as $15, however waiting too long to address the issue can be quite costly.

 

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In a new twist on an old case, Florida’s 5th District Court of Appeal recently held that the failure of a county to adequately maintain a public roadway may result in a “taking” of property that is accessed by the that road. Jordan v. St. Johns County, 36 Fla. L. Weekly D1095a (May 20, 2011).

At issue was a stretch of former State Highway A1A which runs along the Atlantic Ocean in St. Johns County. The road had been deeded to the County by the State in 1979 after the State re-routed A1A approximately 800 feet west of its original location. After numerous storms and natural forces caused significant damage to the roadway, a group of owners whose property obtained access via “Old A1A” sued the County for failing to maintain the roadway in useable condition. The County took the position that it had the sole authority and discretion to determine what constituted reasonable roadway maintenance. The trial court granted summary judgment in favor of the County, and the landowners appealed.

The 5th DCA reversed the trial court and held that:

  1. the County had the obligation to maintain the roadway at a “reasonable level . . . that affords meaningful access,” unless or until the County formally abandons the road; and
  2. a county’s decision not to maintain a roadway at a reasonable level could constitute effective abandonment of the roadway, depriving the property owners of access to their property without compensation. 

The summary judgment on these counts was reversed and remanded to the trial court for further proceedings.

In recognizing a potential uncompensated taking of access rights, the 5th DCA relied on the 1989 Florida Supreme Court decision in Palm Beach County v. Tessler, 538 So.2d 846. In Tessler, the court held that roadway improvements that eliminated a commercial property owner’s direct access to an adjacent arterial could result in a compensable taking of the owner’s access rights if the remaining access to the property was so circuitous as to essentially render the property unusable for commercial purposes. Very few landowners had been able to successfully use the Tessler decision to establish a taking based upon deprivation of access, but the St. Johns County case provides a warning to local governments that decisions pertaining to roadway access can lead to a potentially compensable taking of real property. A motion for rehearing is presently pending before the court.

 

You may recall from our April 28th blog post that a recent study recommended an average 27% reduction in road impact fees imposed by Lee County. On Tuesday, June 14, in a 4-0 vote by County Commissioners (with Commissioner Hall being absent), the study’s recommendations were adopted.

This is great news for the development community and may make an otherwise un-doable project now desirable once again. You can review and download a copy of the proposed ordinance with specific fee information here.

Would you be surprised to discover that the property you would like to purchase, which is subject to a foreclosure suit, has an invalid assignment of bid rights?

Improper Assignment of Bid Rights
As a transactional real estate attorney, I am surprised at the frequency I am discovering improper assignments of bid rights filed in foreclosure cases. An improper assignment of bid rights is signed by the plaintiff’s attorney rather than being signed by the lender, without any documentation being provided to reflect the authority of the attorney to sign the assignment. This renders the assignment of bid rights invalid and creates possible title problems for the subsequent purchaser of the property.

Does this mean the foreclosure sale is invalid? Does this mean you, as the subsequent purchaser, do not have clear title to the property? The answers to these questions require review of many documents, including the pleadings filed in the foreclosure suit, your contract to purchase, all signed closing documents and the exceptions listed in your owner’s title insurance policy (assuming you obtained an owner’s title insurance policy).

Best Practice Tips
To avoid creating this title problem, the lender should sign an assignment of bid rights and the assignment should then be filed in the foreclosure case. If the lender’s attorney signs the assignment of bid rights, a power of attorney signed by the lender authorizing the attorney to execute said document is required. The power of attorney must comply with Florida Statutes to be valid, should be recorded in the official records in the county where the property is located and should be attached to the assignment of bid rights filed in the foreclosure case.

To avoid another unpleasant surprise, it is important to confirm the plaintiff/lender complied with all judicial administrative orders concerning the assignment of bid rights. For instance, Polk County, Florida requires all assignments of bid rights made after the sale be approved by the Court and filed in the court file.

The best way to avoid unpleasant surprises if you are purchasing a property currently subject to a pending foreclosure suit or property already foreclosed upon is to be thorough in your due diligence, including review the of the foreclosure case and review of documents of record impacting title to the property.

The Florida Legislature recently adopted House Bill 7207 which drastically changes the landscape of Florida’s Growth Management procedures. The bill itself comprises 349 pages (the majority of which deals with matters unrelated to growth management) and the drastic changes it proposes are too numerous to cover in a blog entry. A sampling of some of the major provisions include:

  • Eliminates the state concurrency mandate relating to transportation, schools and parks (though local governments may retain their local concurrency requirements);
  • Increases certain development of regional impact (“DRI”) thresholds (including office and commercial uses) and eliminates other uses from DRI review (including motel/hotel and industrial uses);
  • Provides a four-year extension to commencement, phase, build-out and expiration dates of DRIs regardless of any prior extensions;
  • Grants a two-year permit extension to any permit that was eligible under Senate Bill 360 but ineligible under Senate Bill 1752;
  • Provides a new two-year extension for certain permits with expiration dates falling between January 1, 2012 and January 1, 2014;
  • Removes the limitation of only twice-per-year comprehensive plan amendment cycles;
  • Allows for expedited review of most comprehensive plan amendments, with some exceptions;
  • Adjusts standards of review for challenged amendments – if the Department of Community Affairs (“DCA”) challenges a local government’s in-compliance determination, the local government’s determination is presumptively correct; the DCA can only overcome this presumption by a preponderance of the evidence standard; and
  • If a third party challenges a local government’s in-compliance finding, DCA cannot intervene in the action, and the local government’s determination must be upheld if it satisfies the more relaxed fairly debatable standard.
Of course, this bill isn’t law just yet – the Governor has 15 days after presentation of the bill to take action (sign or veto). If he signs the bill, it becomes law upon his signature. If he takes no action, the bill would become law on July 5th. There is a lot more in this bill and its companion legislation of HB 7001– look for much more to come on this important piece of legislation!

 

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In light of the significant reduction in property values and construction costs across Lee County, a recent study conducted by Duncan Associates (a consulting firm based out of Texas) concluded that the Board of County Commissioners should consider similarly significant reductions in its road impact fees.

Road impact fees are generally assessed on new construction projects to mitigate the growth impacts associated with that development. Most notably, if your project is going to result in an increase in the usage of existing roads, or require that new roads be built, the idea is that the new project should pay for that impact. This “pay as you grow” fee is common across Florida, but the actual amount imposed for the fee varies greatly by jurisdiction. Typically, this impact fee is based upon such things as the construction costs in widening or creating roadways, or the purchase price for acquiring right-of-way if needed to improve the road. Since the costs of both have dropped, it naturally follows that this fee should drop as well.

On average, Duncan Associates is proposing a 27% reduction in the county’s road impact fees. In addition to this reduction, the study also proposes to roll medical office into general office use. Traditionally, medical office uses have borne a higher road impact fee, so this would even further reduce development costs for potential medical uses, if adopted.

Specific proposed fee changes include:

  • Single family detached: Drop 25% from $8,976 to $6,701
  • Hotel/Motel: Drop 25% from $5,172 to $3,861
  • Shopping Center/General Retail: Drop 28% from $10,983 to $7,933
  • Banks: Drop 32% from $25,134 to $17,187
  • Office: Drop 27% from $7,305 to $5,355

These proposals will be reviewed by various Advisory Committees before going before the Board of County Commissioners in June. You can obtain a complete copy of the 2011 Road Impact Fee Update here and find a listing of the Advisory Committee meetings here.

 

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On March 25, we reported on a recent appellate case in which the court refused to recognized the “superpriority” status of code enforcement liens established by a local ordinance. We indicated that a motion was pending to certify the case to the Florida Supreme Court. In a recent ruling on that motion, the 5th District Court of Appeal certified the following question to the Florida Supreme Court as one of great public importance:

Whether … a municipality has the authority to enact an ordinance stating that its code enforcement liens, created pursuant to a code enforcement board order and recorded in the public records of the applicable county, shall be superior in dignity to prior recorded mortgages?” 

City of Palm Bay v. Wells Fargo Bank, N.A., 36 Fla. L. Weekly  D630a (Fla. 5th DCA March 25, 2011). 

We will report further on this case as it progresses.

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I came across an article by Lora Shinn entitled “5 Buyer Mistakes in a Short Sale.” Number 3 on Shinn’s list is “ignoring legal and insurance information.” Although I agree with the author’s list, the list focuses more on the physical attributes of a short sale property than legal issues (specifically title issues) that are often overlooked until they become a problem — either just before closing when such problems can cause further delay, or worse yet, after closing when they can become a legal and financial nightmare. I would like to expand on the buyer’s mistake of “ignoring legal information” while being blinded by the seemingly “good deal” they are getting.

Continue Reading Short Sales and Judgment Liens: Unforeseen Issues

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Code enforcement liens that were granted “superpriority” status by a local government ordinance were held to lack priority to a prior-recorded mortgage in a recent Florida appellate court decision. City of Palm Bay v. Wells Fargo Bank, N.A., 36 Fla. L. Weekly D161 (Fla. 5th DCA January 21, 2011).

The City of Palm Bay enacted an ordinance creating its Code Enforcement Board in 1997. Under the ordinance, liens on real property created by the Board would be co-equal with state and local tax liens, and would be “superior in dignity to all other liens, titles and claims.”

Continue Reading Code Enforcement Liens Lack Priority Over Prior-Recorded Mortgages