Spring is in the air, which means our elected state officials are in Tallahassee diligently considering, debating, and hopefully, actually reading thousands of proposed bills. The 60-day regular session began on Tuesday, March 8, and there are several draft bills that may have an effect on developers, property owners, and professionals involved in real estate and land development. Jay Brady, who covers state and local government issues for Gulf Coast Business Review, recently wrote an informative article regarding some of these bills, entitled “Business Bills to Watch.” It’s an excellent collection of proposed bills that deserve attention from the business community.

 

Continue Reading Top 10 Growth Management, Land Use & Property Bills Proposed for the 2011 Florida State Legislative Session

I was trading e-mails the other day with a general contractor friend of mine, Mark Stevens of Stevens Construction, Inc., and he took the words right out of my mouth: 

I wish these prospective buyers would do some more due diligence before buying these ‘bargain’ existing buildings.”

We had been discussing new projects, and I was explaining to him that my zoning and land use law caseload has transitioned from focusing on new development and obtaining development entitlements to assisting owners (sometimes involuntary bank-owners) with code violations or development permit-related problems with their property. As a contractor who does a large amount of medical office construction, Mark was lamenting that he is seeing more buyers jumping on fantastic real estate bargains and purchasing existing distressed commercial and office buildings without diligently investigating whether the building may be used for the desired purpose. 

Buyers often think that because an existing building was previously used for medical offices or some other use, they may buy and remodel it for that same use. Unfortunately, they sometimes find out much too late that the previous use was a “grandfathered” or nonconforming use, and the new and improved use the buyer desires to put in is no longer allowed or is severely restricted due to a lack of parking or on-site open space. Sometimes the local codes have changed and require more square footage for a certain use or prohibit the use entirely. Often a solution might be to seek a variance and reduce the required number of parking spaces or seek a development approval to add more spaces, but it can be tough to convince the local government to approve this remedy when the buyer essentially created the very hardship he is seeking relief from. 

In the height of the real estate boom, I often assisted clients by providing a due diligence analysis regarding the existing entitlements or development potential, and they were happy to have me do it because it added value to projects, or provided a red flag to abandon the deal. As the market peaked and then careened over a cliff, due diligence investigation has sometimes been overlooked or relegated to those who may not be aware of the latest changes to a local government’s land development code or comprehensive plan. Even worse, sometimes there is no actual change in the wording of a code, and it is the interpretation of the code that changes. Skipping a proper due diligence investigation is a huge risk for a buyer, and while it may add a few thousand dollars to a project’s bottom line, denial of the desired use or a lengthy variance or special exception approval process can kill a project altogether.

Listen to this post

The landscape of Florida has seen rapid change over the last several decades, and none has been more drastic that the urbanization and development of Florida’s farms and agricultural areas. With increased development comes higher property values and increased property taxes. In an effort to assist farmers and agricultural landowners, the Florida Legislature passed bills that became known as the Greenbelt Laws, providing a property tax break for agricultural lands.

Current laws allow for an agricultural tax classification for bona fide, commercial, agricultural use of land. Over the years, Florida courts have been called on to determine the balance between the tax benefit provided to agricultural landowners and the need for cities and counties to accurately assess non-agricultural lands and collect the taxes for municipal services. Today, it is not uncommon for a county and a landowner to disagree regarding the bona fide nature of a use, or the extent of that use on the property. For example, a property appraiser may deny the classification on a property because he feels that there are too few cows grazing on the land, or not enough has been done to properly care for the land.

So what can a landowner do to ensure that his or her agricultural classification is granted?

  • Know the commercially-accepted practices for the type of agriculture you are engaged in. For example, if all cattle ranchers mow and seed their pastures annually, following these practices may support the contention that a property should be granted the classification.
  • Ensure that there is documentation regarding the improvements or activities that are part of the agricultural operation, including any lease agreements. Some owners hire professional property managers to ensure that the agricultural use is managed properly.  
  • Communicate with the property appraiser’s office before a determination regarding the classification is made can be beneficial, as well, so that a property owner may provide additional documentation or information that will be persuasive.

Ultimately, if a property owner cannot convince the local property appraiser that a property should receive an agricultural classification – and a drastically lowered tax bill – the owner must seek appeal to the Value Adjustment Board. This appeal process generally hinges on the evidence and testimony related to the agricultural use, making it even more important to keep documentation regarding activities and expenditures related to the agricultural use. 

The filing period for submitting applications for ad valorem property tax exemptions to the county Property Appraisers opened January 1, 2011.  If you believe you might qualify for such exemption for your 2011 property taxes, you must file your application with the Property Appraiser before March 1, 2011.  The two most common exemptions applied for include:

The filing period for submitting applications for ad valorem property tax exemptions to the county Property Appraisers opened January 1, 2011. If you believe you might qualify for such exemption for your 2011 property taxes, you must file your application with the Property Appraiser before March 1, 2011. The two most common exemptions applied for include:

  • Homestead Exemption: Those who qualify for a homestead exemption can seek up to two (2) $25,000 exemptions (for a potential combined total of $50,000) from their home’s assessed value. Basic criteria are that the applicant is a bona fide Florida resident possessing title to the property and residing at the property on January 1, 2011 as their permanent residence. There are other criteria and many exceptions as well.
  • Agricultural Exemption: The property must have been used for a bona fide commercial agricultural use as of January 1, 2011. The applicant is asked to submit various supporting information, including financial documents, to support an agricultural classification on the property.

Other ad valorem real property exemptions include, among others:

  • Senior Exemption
  • Widow/Widower Exemption
  • Veterans Disability Exemption

There are a host of exemptions applicable to tangible personal property as well. Applications for these exemptions, as well as additional information on each, can be found on your local Property Appraiser’s website.

For those interested in some recent case law addressing the homestead and agricultural exemptions, see below.

Continue Reading Property Tax Exemption Filing Window Now Open – Be Sure to File Before it Closes!

On October 15, 2010, the Environmental Protection Agency will usher in a new era of water quality regulation for Florida’s lakes and flowing waters. Known as the Numeric Nutrient Criteria (“NNC”) rule, the final rule will establish specific numeric limitations on nitrogen and phosphorous concentrations in fresh water lakes and streams.

Before the implementation of this rule, Florida water quality rules were based on a narrative standard that used descriptive language to identify polluted bodies of water. The rule also creates restoration standards for water bodies that are designated as “impaired.” Impaired waters may be waters that are deemed to be polluted to the point where they no longer are suitable for their intended use. The new rule only applies to fresh water, however a similar NNC rule for coastal waters and estuaries is slated for consideration in 2011. These new water quality standards will have significant economic and operational effects on municipalities, agricultural operations, utilities, and future development.

Continue Reading EPA Numeric Nutrient Criteria

It is commonly known that a buyer should perform due diligence before purchasing property. If the buyer fails to perform due diligence (obtaining a building inspection, phase I environmental report, mold inspection, Chinese Drywall inspection, survey, etc.) the buyer may incur significant unanticipated post-closing costs and liabilities.

When purchasing property at a foreclosure sale or a property that has recently been foreclosed, a buyer must be even more diligent in his or her inspection of the property and title to the property since the buyer, in most cases, is purchasing the property “as is.”

In any type of purchase, a buyer must be concerned with the title to the property. This is especially important in today’s market since so many properties are in foreclosure. What if the foreclosure suit named the wrong lender as the plaintiff? What if a junior lien holder was not named in the foreclosure suit? These situations and many other situations can leave a buyer with title to a property that is not insurable and can cost the buyer thousands and sometimes tens of thousands of dollars to correct.

Most title companies do not understand the complexity of legal matters involved in a foreclosure suit. Further, a title company does not represent either the buyer or the seller in a real estate transaction and cannot provide legal advice to either party.  

Continue Reading Avoiding Costly Mistakes When Purchasing Property in Today's Market

Listen to this post

The 2009 Florida Legislature’s attempt to provide some relief to the development community met its demise in a Tallahassee circuit court. Circuit Judge Charles Francis’ order of Final Summary Judgment, entered on August 26, 2010, declared Senate Bill 360 unconstitutional as a violation of Article VII, Section 18(a) of the Florida Constitution, which prohibits the adoption of “unfunded mandates” to local governments. City of Weston v. Crist, Case No. 2009CA2639, 2nd Jud. Cir. According to the opinion, the law would have required certain local governments to spend over $3 million in the aggregate to process plan amendments required by the bill.

The Court found that this expenditure would not be “fiscally insignificant” so as to exempt the bill from the constitutional restrictions. Senate Bill 360 (also known as the Community Renewal Act) attempted to provide several boosts for development interests, including:

  1. exempting development from the Development of Regional Impact process in local governments identified as Dense Urban Land Areas (DULAs);
  2. establishing transportation concurrency exemption areas in local governments designated as DULAs; and
  3. providing two year extensions for certain permits that expired between September 2008 and December 2012.  

The Court’s judgment declared Senate Bill 360 unconstitutional and ordered it “expunged” from the official records of the State. During its 2010 session, the Florida Legislature took some preemptive measures anticipating a possible negative decision from the Court on Senate Bill 360. Senate Bill 1752 re-enacted the permit extension provisions of Senate Bill 360 and provided for an additional 2-year extension under certain conditions. Senate Bill 1752 requires notification be provided to the affected government agency by December 31, 2010. Because local government and agency interpretations and the application of Senate Bill 1752 may vary, permit holders who exercised their right to an extension under Senate Bill 360, or who want to exercise their rights under Senate Bill 1752, are strongly encouraged to seek competent legal review and guidance.

Listen to this post

If so and you parked it in the City of Coral Gables, you could have been cited for violating the City’s zoning code. Zoning and land use regulations to preserve aesthetics have long been recognized as a valid subject of the police power. In Kuvin v. City of Coral Gables, 35 FLW D1914b (Fla. 3d DCA August 25, 2010), the Court upheld a city ordinance that prohibited the parking of all trucks (including personal use pick-ups) in residential streets and driveways on the grounds that the ordinance was rationally related to the City’s legitimate interest in preserving the aesthetic integrity of its residential neighborhoods.

While similar ordinances have been upheld in the past, the challenge that Kuvin raised was unique. He contended that the ordinance violated his fundamental First Amendment right of freedom of association by restricting who he could visit in the City with his Ford F150 and who could visit him at his rented house in Coral Gables. The trial court held for the City and Kuvin appealed.

A three-judge panel of the Third District Court of Appeal overturned the judgment, but upon rehearing before the entire Third DCA, the Court upheld the trial court and the validity of the ordinance. In short, the Court found that the ordinance did not restrict Kuvin’s right of association, only the location of where he could park his vehicle. Kuvin was not prohibited from driving his pick-up in the City, “he simply must garage the vehicle at night.” The fact that Kuvin’s rented house did not have a garage brought no sympathy from the Court — Kuvin rented the house after the ordinance was adopted and, therefore, had notice of the parking prohibition.

A lengthy majority opinion, a concurring opinion that chastises the majority, and a dissenting opinion that calls the majority opinion a “proverbial rubber stamp” makes for some interesting reading. In the end, the original three-judge panel certified to the Florida Supreme Court the following question as a matter of “great public importance.” May a City ordinance, which prohibits the parking of any truck in a private driveway or in a public parking space at night, as applied to a personal-use light duty truck, be upheld as constitutional?
Listen to this post

Florida has long been admired for its long shoreline, tropical climate, and preserved natural beauty. For just as long, there has been strong debate over striking the delicate balance between man-made alterations to the land and preservation of its natural features. Recently, the United States Environmental Protection Agency (“EPA”) took another step toward preservation by directing the state of Florida to take specific measures to restore water quality in the Everglades. As this matter continues to unfold, it could have far-reaching impacts on landowners and agricultural operations surrounding the Everglades.

How We Got Here

EPA’s direction came in the form of an “Amended Determination” filed with the U.S. District Court in an action resulting from lawsuits brought by the Miccosukee Tribe and the Friends of the Everglades to improve the quality of water flowing through the Everglades. The Determination noted that excess levels of phosphorus were found in portions of the Everglades and directed that additional reductions of phosphorus pollution are needed. Excess phosphorus in water above permitted levels is a concern because it can cause chemical and biological changes that degrade wetlands, lakes, and other natural systems. EPA identifies agricultural operations in the area south of Lake Okeechobee as the primary source of excess phosphorus entering the Everglades through stormwater runoff.

Why It Matters

Aside from the environmental benefits of restoring this area, there are several reasons why EPA’s actions here are important. First, if EPA’s directives are accepted, it would likely lead to more stringent water quality standards for projects affecting the Everglades. Second, EPA is proposing to substantially increase the marsh treatment areas that decrease phosphorus levels in runoff water before it enters the Everglades. In addition to the nearly 60,000 acres currently in place or slated for construction for these marsh treatment areas, EPA is proposing to add another 42,000 acres. EPA is eyeing the controversial acquisition of land owned by the U.S. Sugar Corporation to the South Florida Water Management District (“SFWMD”) as providing much of this increased area. Finally, EPA proposes stringent deadlines by which the Florida Department of Environmental Protection (“DEP”) and SFWMD must take certain actions. Most notably, existing permits issued by these agencies would need to be amended to conform with the proposed discharge limits, if adopted by the court.

What Happens Next

The federal court, DEP and SFWMD are currently reviewing EPA’s Amended Determination. A hearing on the Amended Determination is scheduled for October 7, 2010.  Particularly for those with existing or proposed operations which direct runoff to this area, the court’s actions will have significant effect.

Each year, the legislature makes changes to the laws regulating condominium, cooperative, and homeowner associations.  This year, many of the legislative changes were intended to address the unique problems which arose as a result of the severely depressed housing market and the effect it has had on these associations. This article summarizes some of legislative changes that took effect on July 1.

Continue Reading Recent Developments in Condominium Cooperative and Homeowner Association Law