tag:blogger.com,1999:blog-57036757474218220562024-03-17T23:02:32.421-04:00Florida Real Estate AttorneyA blog dedicated to all things related to real estate law in Florida including foreclosure, construction, homeowners associations, closings, refinances, leasing and titleMichael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.comBlogger67125tag:blogger.com,1999:blog-5703675747421822056.post-72623870305922289992020-11-26T15:33:00.002-05:002020-11-26T15:33:22.685-05:00Asset Protection Issues in Florida<p> I often get calls asking me to assist a client with asset
protection. Many people believe they need a revocable trust in order to obtain
asset protection. However, a revocable trust, which allows the grantor to
retain control of their assets as trustee of the trust, provides no creditor
protection to the grantor trustee, and is simply a tool for estate planning
purposes. In order to use a trust for creditor protection the grantor must give
up control of their assets and appoint a separate trustee the who is not
legally obligated to act as directed by the grantor.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> However, in
Florida, there are many methods of asset protection that occur simply by residing
as a citizen of this State. The primary protection lies in the Florida
Constitution. Article X, Section 4
provides: </p>
<p class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>There shall be exempt from forced
sale under process of any court and no judgment, decree or execution shall be
a lien thereon, except for the payment of taxes and assessments thereon,
obligations contracted for the purchase, improvement or repair thereof, or
obligations contracted for house, field or other labor performed on the
realty..”</i> </p>
<p class="MsoNormal"> This means
that if you own a home, whether married or single, with or without children,
condominium or cooperative, regardless of value and regardless of whether you
have a mortgage, a judgment creditor cannot foreclose their judgment against
your homestead property. Even a municipality is unable to foreclose a code
enforcement lien on homestead property. This protection extends past the death
as long as your property descends to your spouse or children. Note that if you file bankruptcy, the Florida
exemption preempts State law, requiring that you must have resided at the
property as your homestead for at least forty months to obtain full
protection. Prior to forty months of
continuous residency, the cap is approximately $160k. In addition, homestead property is limited to
one-half acre in a municipality and one hundred sixty acres in unincorporated
areas. <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> If you have a
judgment and wish to sell or refinance a
homestead property, Florida law allows clearance of those claims by
giving the creditor a forty-five-day notice of homestead, which gives the
creditor a limited window to challenge the homestead claim. In addition, after sale, the homestead sale
proceeds remain protected as long as the proceeds are used to purchase a new
homestead. We recommend placing same in a homestead trust rather than commingling
the funds after any such sale while searching for a replacement homestead
property.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"> Florida also
recognizes a special estate, called tenants by the entireties. This is property
owned by married couples, such as real property (non-homestead), bank accounts
or brokerage accounts. Under common law
in Florida the claims of individual creditors cannot reach properly-created
entireties property. In the eyes of the
law, property owned by a married couple is treated as one, hence not reachable
by creditors or divisible without both spouses conveying the interest.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Special rules
exist to create property as tenants by the entireties. It must be received as a married couple, each
must hold title to the property, each must have equal use and possession of the
property, must remain married and have an equal interest therein. Failure to meet each of these criteria
invalidates the entireties protection.
Also, the judgments are not invalid, only inchoate, which means that
upon breaking of the entirety’s estate (by death, divorce, or transfer), a
creditor’s judgment immediately attaches to the asset. Also, judgments against both spouses may
still reach entireties property (so no fighting over the steering wheel).</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Judgment
creditors have another tool to obtain payment of claims against Florida
debtors. They have the right to garnish
up to twenty-five (25%) percent of a person’s wages and bank accounts. However, debtors who serve as the head of a
household (married couples and single parent with children or dependent
relatives) may not have these assets garnished.
A head of household is the person that provides at least fifty percent of
the living expenses for the household. A
debtor, when served with the garnishment notice, must file notice of this
exemption within twenty days.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> A favorite
method of asset protection is the limited liability company. For example, if you own a rental property and
a tenant or guest is hurt, you are liable for any damages, even if owned as
entireties property. Any claims in
excess of insurance coverage would be a judgment against all other assets
exclusive of homestead. However, if the
property is owned in a limited liability company, the claims would only be
against the company and its assets.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Limited
liability companies have a second benefit.
Creditors can reach shares held in a corporation, but membership units
in a multi-member LLC cannot be taken away, only the available distributions
may be reached (which distributions are frequently controlled in closely held
companies.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Asset
protection is an important tool, but if deployed improperly may result in
unnecessary expenses and consequences, so working with a good estate and asset
protection attorney is key to obtaining the best results.\</p><p class="MsoNormal"><o:p></o:p></p>
<i><span style="font-family: "Arrus BT",serif; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael J Posner, Esq., is
a partner in Ward, Damon, Posner, Pheterson & Bleau, P.L. a mid-sized real
estate, estate planning and business-oriented law firm serving all of South
Florida, with three offices in Palm Beach County. They specialize in estate planning and asset
protection. They can be reached at 561.594.1452 or at mjposner@warddamon.com</span></i>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com14tag:blogger.com,1999:blog-5703675747421822056.post-91315237293538344182020-11-26T15:30:00.004-05:002020-11-26T15:30:44.295-05:00Anatomy of a House Sale<p> Due to a combination of low interest rates, Covid-19, the
desire for more space and the ability for many workers to work remotely in new
locations has led to a very active and robust residential real estate market.
Selling a residence is a multi-step process that involves a team of
professionals including Realtors, attorneys, title agents, lenders, and
government officials, all of which are necessary to conduct and complete a
typical house sale.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> The beginning
of the process is the decision on how to market and sell the property.
Traditionally most people interview and hire a local real estate agent to
handle this portion of the transaction. While most Realtors utilize a standard
form for a listing agreement, promulgated by their local Board of Realtors,
this form is negotiable and does not have to be signed as presented. Some
issues to consider include the length of the listing, whether the listing automatically
renews, the terms and conditions of the sale such as allowing VA or FHA
financing, or the offering of both leasing and sale.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> The biggest
issue is the Realtors commission. The person listing the house is known as the
listing agent and the person who brings the buyer to the transaction is known
as the selling agent (because the seller indirectly pays that agent).
Traditionally both agents were paid a 3% commission. This is negotiable
especially if the listing agent has both sides of the transaction or if the
homeowner locates a buyer on their own. For example, a common reduced
commission is known as the 5-2-1. listing.
In this type of listing, the listing agent gets 5% if they have both
sides of the transaction; 2% if they are the listing agent with 3% going to the
selling agent; and only 1% if the seller finds the buyer on their own.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Once a house
is listed for sale it will be subject to viewing both online as well as
possibly in person especially once the Covid-19 pandemic ends. This includes
the placement of a lockbox on your home which allows Realtors access for
showings when you are not home. As a precaution, any valuables or medicine
should be securely locked to prevent any question of loss during such
visitations. While those risks are small, they do occasionally happen.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> When a Buyer
decides to make an offer, they will submit a contract to your agent for review
and approval. The most common contract used is called the FAR/BAR Contract.
Most attorneys, Realtors and title companies are familiar with this contract
and its riders. The contract can either
be an “as-is contract” wherein the Buyer gets a set number of days to complete
an inspection and determine whether to cancel the contract for any reason or
proceed to close regardless of the property’s issues, or a limited repair contract
which requires the Seller to make certain repairs up to a fixed percentage
(usually a maximum of 3%) and if the Seller makes the repairs the Buyer cannot
cancel the contract. In practice, 90% of the contracts I deal with are the as-is
contract, with a fixed inspection period and free right to cancel.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Once the
contract is fully executed a closing agent must be selected. Please note it is
the Seller’s or Buyer’s choice not the Realtor’s choice as to whom to utilize
and I highly recommend that a real estate attorney be chosen instead of just a
non-attorney title company. An attorney can provide greater protection and
address more issues should they arise, and answer more questions regarding the
purchase and sale.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> In Palm Beach
County, the closing agent is customarily selected by the Seller. In Broward and
Miami-Dade Counties, the closing agent is customarily selected by the
Buyer. Usually the person selecting the
closing agent also pays the cost of the title premium. The other large cost
customarily paid by the Seller is the Florida Documentary Stamp Tax due on the
transaction, which is based on a rate of $7 per thousand in real property
value. For example, a home that sells for $300,000 will have doc stamps in the
amount of $2,100 due and payable from the Seller at closing.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Once the
inspection period passes, and any financing contingency has been met (the buyer
has obtained loan approval) the deposit becomes nonrefundable and the parties
move towards closing. The closing does not have to be formal and in most cases
today closing is done through an escrow transfer with the Sellers signing
separately from the Buyers and the sale documents exchanged for the net
proceeds to the Seller and access to the property for the Buyer. This includes
frequent remote notarization of the Buyers or Sellers signatures on closing
documents though many lenders still require a wet signature on mortgages and
notes.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> After closing,
the title agent will issue a final Title Insurance Policy, insuring the Buyer
and the Buyer’s lender have insurable and marketable title to the property. If
the Buyer intends to reside at the property, the Buyer should then make an
application for homestead with the property appraiser in order to obtain the
tax benefit provided by Florida law.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> Because
selling or purchasing a home is complicated and is also generally the most
expensive transaction a party will participate in, having an experienced real estate
attorney assist you in the transaction is, in my opinion, a wise investment.
This choice can save you money (for example by requiring a seller to provide a
survey affidavit in lieu of a new survey) and protect you should issues arise
such as improper disclosures, title defects, unknown liens and encumbrances and
other issues that may be missed by the title agent or Realtor.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><i><span style="font-family: "Arrus BT",serif; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US;">Michael J Posner, Esq., is a partner in Ward, Damon,
Posner, Pheterson & Bleau, P.L. a mid-sized real estate and business-oriented
law firm serving all of South Florida, with three offices in Palm Beach
County. They specialize in real estate
law and can assist sellers and purchaser with closing and financing of
residential and commercial real estate including remote closings. They can be reached at 561.594.1452 or at
mjposner@warddamon.com</span></i></p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com11tag:blogger.com,1999:blog-5703675747421822056.post-48561928386215096312020-09-25T10:49:00.007-04:002020-09-25T10:49:55.648-04:00New Florida Law Changes Rules for Support Animals<p> <span> </span><span style="font-size: x-large;"><b>S</b></span>everal months ago, the long-awaited update to the Housing
and Urban Development Guidelines relating to reasonable accommodations for
service and support animals under the Fair Housing Act was finally released (FHEO
Notice: 2020-01). The revised guidelines had been greatly anticipated by landlords,
apartment owners and condo/homeowner’s associations with no pet policies in the
hopes that the Department of Housing and Urban Development would crack down on (i)
the perceived falsification of applications for a reasonable accommodation for
support animals by nondisabled persons using the request to place a pet in a
non-pet residential unit based upon Internet acquired letters of disability and
the need for a support animal; (ii) limiting the number of support animals to
one per household; and (iii) addressing exotic or farm animals as support
animals.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><span> </span>Unfortunately, while HUD discussed the issue of internet-based
certificates, registrations and licensing documents for assistance animals, HUD
did not make this type documentation invalid as part of an accommodation request.
<span style="mso-spacerun: yes;"> </span>Instead HUD stated that “…many
legitimate, licensed health care professionals deliver services remotely,
including over the internet.” Therefore, under said guidelines, if an
accommodation is requested based on an Internet diagnosis, it appears that the
accommodation must still be granted if the health care professional confirms, in
writing, a person’s disability and need for a support animal when the provider
has personal knowledge of the individual.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>HUD also addressed the issue of multiple support animals and
confirmed that there must be separate disabilities addressed by each of the
support animals in order to receive a reasonable accommodation. Finally, regard
to requests for a reasonable accommodation for non-household pets, defined by
HUD as “unique animals,” HUD has stated that requests a “substantial burden of
demonstrating a disability-related therapeutic need for the specific animal or
the specific type of animal.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></p>
<p class="MsoNormal"><span> </span>The disappointment over the new HUD guidelines was
short-lived as the Florida legislature stepped in and addressed the issue of
Internet certificates in connection with requests for s reasonable
accommodation for support animals. The new act, effective July 1, 2020 under
Section 760.27 Florida Statutes, acts to block requests based solely on medical
diagnosis prescribing a support animal over the Internet, a common method used
to obtain a reasonable accommodation by many tenants and owners of dogs and
cats seeking to rent or buy a in a no pet property.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Specifically, the new legislation states that if a person’s
disability is not readily apparent (usually some form of recognized psychiatric
or mental disability, such as anxiety, post-traumatic stress disorder (ptsd),
depression, etc.) then a request is contingent upon the delivery of appropriate
healthcare information diagnosing the disability and its impact on a major life
activity.<span style="mso-spacerun: yes;"> </span>Previously, under the HUD
guidelines, a letter obtained from a licensed practitioner over the Internet
was sufficient to support a claim for a disability that warranted a reasonable
accommodation (pet owners would simply pay a fee, answer a few questions online,
and out popped a certificate prescribing a support animal for the owners
disability). The new legislation goes further, and requires that any
Internet-based diagnosis be conditioned <b>on at least one in person treatment</b>
as follows:<o:p></o:p></p>
<p class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 0in;"><i>Information from a health care
practitioner, as defined in s. 456.001; a telehealth provider, as defined in s.
456.47; or any other similarly licensed or certified practitioner or provider
in good standing with his or her profession's regulatory body in another state
but only if such out-of-state practitioner has provided in-person care or
services to the tenant on at least one occasion. Such information is reliable
if the practitioner or provider has personal knowledge of the person's
disability and is acting within the scope of his or her practice to provide the
supporting information.<o:p></o:p></i></p>
<p class="MsoNormal"><span> </span>With this new statutory restriction, the number of
anticipated requests for a reasonable accommodation will be substantially
reduced. This assumption is based on the fact that many requests for a
reasonable accommodation do not rise to the legal threshold of a diagnosable
condition that interferes with<span style="mso-spacerun: yes;"> </span>a major
life activity.<span style="mso-spacerun: yes;"> </span>Pet owners who previously
relied on Internet certificates from so-called reasonable accommodation mills
will now either have to obtain healthcare information from a local practitioner
after an in person diagnosis, at a considerably higher cost, or give up their
request for reasonable accommodation.<o:p></o:p></p>
<p class="MsoNormal"><i>This article is adapted with permission from a chapter Michael
J Posner, Esq., wrote for the new Florida Real Property Law (Bluebook),
published by Lexis (part of the new Florida Colorbook series for attorneys).
Michael specializes in real estate law and can help all parties with support
animal issues.<span style="mso-spacerun: yes;"> </span>Michael can be reached at
561.594.1452 or by e-mail at mjposner@warddamon.com.</i></p>
<p class="MsoNormal"><o:p> </o:p></p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com4tag:blogger.com,1999:blog-5703675747421822056.post-14817395213959761922020-09-25T10:47:00.003-04:002020-09-25T10:47:20.115-04:00The Coming Eviction Crisis<p> <span> </span><span style="font-size: x-large;"><b>W</b></span>ith the pandemic in full swing and the loss of a
substantial number of jobs in March 2020, the governor of the state of Florida
issued Executive Order 20-94 on April 2, 2020. The Executive Order provided, in part: “I (the Governor) hereby
suspend and toll any statute providing for an eviction cause of action under
Florida law solely as it relates to non-payment of rent by residential tenants
due to the COVID-19 emergency for 45 days from the date of this Executive
Order, including any extensions.” That order expired May 17, 2020 but was
extended through June 2, 2020 by Executive Order 20-121 and further extended
through July 1, 2020 by Executive Order 20-137 and through August 1, 2020 by
Executive Order 20-159.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><span> </span>On July 29, 2020, the Governor issued Executive Order
20-180, that continued the eviction stay, but included a condition that tenants
must meet to avoid eviction. Specifically, the non-payment of rent must be due
to the tenant being adversely affected by the COVID-19 emergency.<span style="mso-spacerun: yes;"> </span>The Order defines that as being “…loss of
employment, diminished wages or business income, or other monetary loss
realized during the Florida State of Emergency directly impacting the ability
of a residential tenant to make rent payments.”<span style="mso-spacerun: yes;">
</span>This means that in any eviction action the tenant will have an
affirmative duty to show a court that the tenant’s non-payment of rent is
Covid-19 related.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>The eviction process in Florida is regulated by Chapter 83,
Florida Statutes, the Landlord-Tenant Act.<span style="mso-spacerun: yes;">
</span>No eviction may be commenced nor may any landlord exercise a self-help
remedy without complying with the provisions of the Landlord-Tenant Act and the
judicial procedures promulgated thereunder.<span style="mso-spacerun: yes;">
</span>First, landlords must provide a delinquent tenant with a written notice
providing the tenant at least three business days to bring the lease current.
If the tenant fails to pay, the landlord may commence an action in the Florida
courts for eviction. A complaint is filed and must be served on the tenant
either by personal service (a requirement if a landlord is seeking damages for
unpaid rent) or by posting a copy of the complaint and summons on a conspicuous
location on the rental property if two attempts for personal service have
failed (only if the landlord is seeking possession and not seeking damages for
unpaid rent).<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Tenants have five business days to file a response to the Landlord’s
complaint.<span style="mso-spacerun: yes;"> </span>It is during this point in
the preceding that a tenant must raise, as an affirmative defense, that their
failure to pay rent is due to a Covid-19 emergency. Under the Landlord-Tenant
Act, no defenses to an eviction can be raised (such as maintenance issues,
leaks, mold, etc.) unless the tenant pays the unpaid rent into the registry of
the court. Presumably, this condition will not apply if a Covid-19 emergency defense
is raised. If the tenant fails to respond or raise any defenses to the
complaint, the landlord is entitled to the entry of an Order for Tenant
Removal. This Order directs the Clerk of the Court to issue a Writ of
Possession, which directs the sheriff of the county to remove any persons in
possession of the rental property. Once the Writ is issued, the sheriff will
contact the landlord or their agent and schedule a lockout of the property. The
sheriff will post notice of the lockout on the rental property, giving all
occupants 24 hours to vacate.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Because many evictions have been stayed since April 2, 2020,
there is a large backlog of unprocessed cases.<span style="mso-spacerun: yes;">
</span>In addition to previously filed cases that were stayed by the initial
Executive Order, the Clerk of Palm Beach County has indicated that an
additional 1,000 eviction cases have been filed since mid-March 2020. This
volume of cases will be difficult for the courts to process and different
judges will interpret Covid-19 emergency defenses differently, resulting in
some tenants being evicted while others will remain without paying any rent. It
is unclear how long it will take to clear this large backlog of evictions.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>One issue is the fact that the stay on evictions did not
forgive the payment of rent.<span style="mso-spacerun: yes;"> </span>The
Executive Order specifically states, “All payments, including tolled payments,
are due when an individual is no longer adversely affected by the COVID-19
emergency.”<span style="mso-spacerun: yes;"> </span>It is not clear how many
landlords will seek judgment for unpaid rent against tenants but regardless of
their ability to collect on such judgment, it will affect the tenants’ ability
to rent a new home or obtain credit.<span style="mso-spacerun: yes;">
</span>However, it appears that once the courts start processing evictions,
there will be many new homeless families who simply can no longer afford rent
at a level prior to the pandemic.<o:p></o:p></p>
<p class="MsoNormal"><i>Michael J Posner, Esq., is a partner in Ward, Damon,
Posner, Pheterson & Bleau, P.L. a mid-sized real estate, estate planning
and business-oriented law firm serving all of South Florida, with three offices
in Palm Beach County.<span style="mso-spacerun: yes;"> </span>They specialize in
residential and commercial real estate and can assist with leases and
evictions. They can be reached at 561.594.1452 or at mjposner@warddamon.com<o:p></o:p></i></p>
<p class="MsoNormal"><o:p> </o:p></p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com1tag:blogger.com,1999:blog-5703675747421822056.post-19641312480675211662020-09-25T10:46:00.000-04:002020-09-25T10:46:01.059-04:00Reverse Mortgage and Condominiums<p> <b><span style="font-size: x-large;"> </span><span style="font-size: x-large;">F</span></b>irst it was Robert Wagner and now Tom Selleck selling
reverse mortgages on daytime television. The commercial promises that its “not
to good to be true” and that its “not just another way for the Bank to get your
home.” Repayment is due “when you leave
your home” (no mention of death), and is pitched as a “way to bring a more
stable and secure retirement” and allow homeowners to “stay in the home they
love.”</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><span> </span>Reverse mortgages work by using a portion of your equity to
fund the loan with the remaining equity used to pay the accruing interest on
the loan such that the borrower never has to repay the loan until they either
permanently leave the property, die, or otherwise default under the loan (such
as for failing to pay taxes, condominium assessments or insurance). The key
feature of the reverse mortgage is cash up front, especially for people with
substantial equity in their home, and the lore of no monthly mortgage payments.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>What is never mentioned in Tom Selleck’s advertisement is
the downside to reverse mortgages. At the very end of the ad is a disclaimer,
in very small print, which actually provides a clear warning of the downsides
of this program. It makes it clear that a reverse mortgage decreases your home
equity through negative amortization; that borrowers are responsible for taxes
and homeowners insurance; and that borrowers must reside in the home and
maintain same, otherwise the “the loan becomes due and payable.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></p>
<p class="MsoNormal"><span> </span>Another thing not mentioned in the reverse mortgage
advertisement is the high cost of a reverse mortgage. Origination fees may be
as high as $6,000 plus there is normal loan closing costs and an upfront
mortgage insurance premium. These fees are usually much higher than
conventional mortgage loan closing fees. In addition, on top of the ongoing interest
charged on the reverse mortgage, the reverse mortgage borrower pays servicing
fees and annual mortgage insurance premiums equal to 0.5% of the outstanding
mortgage balance.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Using a reverse mortgage to purchase a condominium is no
different than traditional mortgage financing. However, qualification for a
reverse mortgage is restricted to persons over the age of 62 years old. In
addition, the amount that can borrow varies substantially depending on the age
of the borrower.<span style="mso-spacerun: yes;"> </span>A younger borrower is
only eligible for a smaller loan while an older borrower can borrow
substantially more on the equity in their condominium. All of this is based on
actuarial data regarding how long the condo owner will live so that there still
sufficient equity in the property when the loan comes due.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>For example, a 62-year-old purchasing a $550,000 Florida
condominium is only eligible for a reverse mortgage of $217,800 to $288,200 while
a 78-year-old would be eligible for nearly $70,000 more.<span style="mso-spacerun: yes;"> </span>In both cases, especially when considering
closing costs, a substantial amount of cash would be needed to purchase that
condominium, most likely in excess of $225,000 to $350,000.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>When the reverse mortgage comes due, mostly caused by an
elderly borrower no longer residing in the condominium or the last surviving
spouse passing away, the condominium may be sold by the owner or the owner’s
heirs to pay off the reverse mortgage. This is different than traditional
mortgages which do not become due and payable upon vacating the condo or
dying.<span style="mso-spacerun: yes;"> </span>With traditional mortgages the
owner or heirs have the option of continuing to make monthly payments until
property values go up or to keep the property as a rental income producing
property. This option is not available for reverse mortgage condominium owners.
The mortgage must be satisfied, or the mortgage will be foreclosed.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Reverse mortgages on condominiums also carry with them the
many restrictions that condominium themselves have on rentals and resales. For
example, many condominiums prohibit renting a property for one or two years
after sale. Because of the looming threat of foreclosure, it is sometimes
necessary to rush the sale of a condominium encumbered by a reverse mortgage.
Because of the rental restriction the market for buyers is reduced since
investors or second home buyers may not be interested in a property they cannot
be occasionally rented. <o:p></o:p></p>
<p class="MsoNormal"><span> </span>Many condominiums are also age restricted, prohibiting sales
to buyers under the age of 55 either in a 100% restricted community or the more
common 80/20% blended community. Again, these types of restrictions make resales
more difficult. All of this of course is on top of dealing with a deceased
parent and the probate requirements to clear the title to the condominium. In
many cases after deducting the cost of sale and ongoing, accruing interest,
there is little to no equity available and therefore, in many cases, the
condominium is not sold and instead foreclosed by the reverse mortgage lender.<o:p></o:p></p>
<p class="MsoNormal"><span> </span>Deciding on a reverse mortgage is a serious, life altering
decision that should not be made based on a commercial starring Tom Selleck.
Sometimes things are too good to be true and reverse mortgage may be one of
those for many people.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p><i>Michael J Posner, Esq., is a partner in Ward, Damon, Posner,
Pheterson & Bleau, P.L. a mid-sized real estate and business-oriented law
firm serving all of South Florida, with three offices in Palm Beach
County. They specialize in real estate
law and can assist sellers and purchaser with closing and financing of
residential and commercial real estate.
They can be reached at 561.594.1452 or at mjposner@warddamon.com</i></p><p class="MsoNormal"><o:p></o:p></p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com0tag:blogger.com,1999:blog-5703675747421822056.post-73102381255424665272020-09-25T10:44:00.007-04:002020-09-25T10:46:15.733-04:00COVID-19 effects on the Real Estate Market Part 2<p class="MsoNormal" style="text-align: justify;"><span style="text-align: left;"><span> </span><span style="font-size: x-large;"><b>I</b></span>t is now been several months since the coronavirus, Covid –
19 has existed as a substantial force on the Florida economy. This impact has
been felt especially hard in the real estate market, resulting in a substantial
drop in the number of sales compared to 2019.</span></p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal" style="text-align: justify;"><o:p> <span> </span></o:p><span style="text-align: left;">The first quarter of 2020 reflected the strong economy with
a year-over-year growth of over 10% from 2019. In addition, inventory for
single-family homes was a low 3.4 months and the inventory for
townhomes/condominiums was a more average 5.5 months. The time periods from listing to contract was
a short 43 days for single-family homes and only 55 days for
townhomes/condominiums. </span></p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>In addition to the strong economic news in the first quarter
of 2020, the low mortgage interest rates also helped encourage sales, dropping
nearly three quarters of a point from the same time in 2019, from an average of
4.37% to an average of only 3.51%.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The effects of the virus came to a head in April, 2020. In
Miami, sales declined 40% compared to April, 2019. Broward County experienced a
decline of 37.4% and Palm Beach County experienced a decline of 33.8% compared
to April, 2019.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Interestingly, the median price for sold homes actually
increased in April in all three counties. The median price increase in Dade
County was 7.3% to $382,000 for homes and 6.9% to $265,000 for condominiums.
The increase in Broward County was 6.1% to $382,000 for homes and 8% to
$183,500 for condominiums. The increase in Palm Beach County was 4.3% to
$365,000 for homes and 5.4% to 195,000 for condominiums</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>During March and April 2020 many pending deals were canceled
by purchasers asserting a force majeure clause in their real estate contract.
Some buyers gave up their deposits rather than proceed to close. Others sought
to delay closing or fight to obtain the return of their deposit. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Many sellers pulled their properties from the market and the
number of active listings in Palm Beach County fell 18.5% from April 2019 to a
total number of listings of 6,126. New listings eventually declined from 2019
as well, only 1,264 new listings in April 2020, a decline of 39.4%. The time period from listing to contract also
increased substantially from earlier in 2020 to nearly 76 days. This is a 21.6%
increase from April 2019.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Unlike April, sales actually picked up some in May, 2020.
Sales levels are still below similar levels in May, 2019 but listings and
closings increased compared to April, 2020. Houses that were withdrawn from the
market in March and April were relisted in May by many sellers. While the virus
has restricted sales throughout the market the effect has been less on very
high-end sales in excess of $10 million.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>For homes priced over $1 million May. 2020 sales figures
were encouraging. Sales surged 45% in Miami-Dade County over May. 2019 with Palm
Beach County experiencing a 26% increase over May, 2019 and Broward County had
a 23% increase for the same time. It is not clear if this increase will be
sustained for the summer of 2020 or this just includes delayed closings from
April.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Because the combination of canceled listings and fewer new
listings the inventory of homes available for sale has fallen by 28.8% for
single-family homes and 12.5% for townhomes/condominiums. This equates to a 4.2-month
supply of homes in Palm Beach County. This number is below the generally
accepted equilibrium number of 5.5 month’s supply. When the supply is below 5.5
months it is generally considered to be a sellers’ market which is reflected in
the higher median sales price for homes that actually close.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The virus also affected the mortgage foreclosure market. The
number of homes being foreclosed and sold at the courthouse has dropped
dramatically. Only 24 homes were set to go to auction in June, 2020 at the Palm
Beach County Courthouse compared to a total of 136 homes that were scheduled to
be auctioned in June, 2019. In addition,
Fannie Mae, Freddie Mac and the Department of Housing and Urban Development of
all extended their stay of mortgage foreclosures through June 30, 2020, which
make up the bulk of the residential housing market. It is also possible that a
further extension of that stay maybe entered depending on the status of the
economy at the end of June.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The appears in the short run that the real estate market
will continue to be affected by the virus but that once the public perception
is that the virus is contained and the economy is rebounding the pent-up demand
for home purchases, coupled with the continuing low mortgage interest rates,
should see increased sales at some point in the future.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p><i>Michael J Posner, Esq., is a partner in Ward, Damon,
Posner, Pheterson & Bleau, P.L. a mid-sized real estate, estate planning
and business-oriented law firm serving all of South Florida, with three offices
in Palm Beach County. They specialize in
residential and commercial real estate and can assist with a closings and
loans. They can be reached at 561.594.1452 or at mjposner@warddamon.com</i></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p> </p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-57899517600346980762020-09-25T10:42:00.005-04:002020-09-25T10:42:43.729-04:00Remote Online Notarization of Estate Documents<p> <span> </span>Last year the Florida legislature adopted a new high-tech
procedure to allow for the remote execution, witnessing and notarization of
legal documents, including last wills.
This procedure solves a problem when a person has to execute a will or
other estate documents and cannot access a notary public or witnesses, such as
when traveling overseas, on a cruise ship, bedridden, hospitalized, too ill to
travel, or homebound in a lockdown situation, such as a pandemic.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The procedure
for online notarization is far more complex than a typical will signing. For physical presence notarization, the
person whose signature is being acknowledged by the Notary Public will produce
appropriate identification, and then wet sign the estate documents as the
necessary witnesses watch, who then wet sign themselves. For in person estate documents, if the Notary
Public may have concerns about the capacity of the person signing, they may ask
a few challenge questions, such as “what is today’s date,” “who is president,”
“do you know why you are here,” and “do you want to sign a will today.” </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Starting in
July, 2020, Florida will allow for online notarization of Wills, Trusts, Health
Care Directives and Durable Powers of Attorney.
The procedure for completing a remote estate document package is far
more onerous than the in-person notarization described above. This is due to the perceived greater
possibility of both notary fraud and the possibility of manipulation of an at-risk
adult by third parties who would benefit from the estate documents to be
notarized.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The initial
step is for the attorney or notary to upload the estate documents to the online
notary platform. Once uploaded they must
be tagged for use. Tags include witness
tags, signer tags, notary tags and text tags (for filling in dates, id type,
and checkboxes, for example). Once
tagged and ready for execution, the attorney or notary tells the system to
request that the testator log in and create an account. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Once access
is granted, the testator may review the estate documents before signing. At the scheduled execution time, the testator
will be required to have their identification scanned in using an app available
on iPhone and Android smart phones. This
app is similar to apps used for mobile check deposits. Driver’s licenses and passports are
acceptable forms of identification. Once
scanned and approved, the testator will have a maximum of two minutes to answer
five multiple choice questions, which are soft pulled from credit reports, such
as where did you live in 1995, what car do you own and the like. If the testator gets eighty percent correct,
they then get to proceed to the execution phase. If the testator fails this
test twice, the testator is locked out of the system and unable to sign using a
remote notary for a period of twenty-four hours.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Signing the
estate documents requires a desktop computer or laptop with a webcam and
microphone. The testator must be running
Chrome or Firefox (no Safari) to sign.
At the same time the testator is online, the notary and the witnesses
will also be online either remotely or, as to the witnesses, with the testator. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The notary
must then verify that the testator is not (i) on drugs or alcohol that impair
mental function; (ii) verify no physical or mental condition or long-term
disability that impairs the ability to perform the normal activities of daily
living; and (iii) ask if the testator requires assistance with daily care. If any answer is affirmative, then the estate
documents may only be completed if the witnesses are physically present with
the testator. In addition, the notary
must advise the testator that if they are a vulnerable adult, the estate documents
they are about to sign will not be valid if witnessed by means of remote audio-video
communication technology. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Once the
foregoing provisions are met, the notary must then verify five questions:</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> 1. Are you currently married and if so, what
is the name your spouse.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> 2. Who assisted you in accessing this video
notarization today.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"> 3. Who assisted you in preparing the estate
documents you are signing today.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> 4. Where are you currently located?</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p> 5. Who is in the room with you?</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>The notary
must weigh all of the foregoing before allowing the estate documents to be
executed. Any invalid responses may form
the basis of invalidating the estate documents in a later legal challenge.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> <span> </span></o:p>Once all the
estate documents are signed, they will be given a special encryption key which
is designed to prevent future alteration.
In addition, the notary host site creates a digital log of all
transactions and a video record of the closing, which must be deposited with a
qualified custodian until the testator dies, in which event the electronic
estate document must be filed with the court.
While more onerous, the ability to remotely notarize estate documents
will facilitate planning when other solutions are unavailable.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p><i>Michael
J Posner, Esq., is a partner in Ward, Damon, Posner, Pheterson & Bleau,
P.L. a mid-sized real estate, estate planning and business-oriented law firm
serving all of South Florida, with three offices in Palm Beach County. They specialize in probate, estate and trust
planning and can assist with a variety of estate documents including remote and
electronic estate documents. They can be
reached at 561.594.1452 or at mjposner@warddamon.com</i></p>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com5tag:blogger.com,1999:blog-5703675747421822056.post-82423396054315243882020-03-23T09:14:00.000-04:002020-03-23T09:14:00.332-04:00COVID-19 effects on the Real Estate Market<br />
<div class="MsoNormal">
With the Coronavirus effects growing with each passing day the Florida real
estate market has been turned upside down, in both negative and positive ways.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>2019 ended
with Florida single family sales up nearly six percent, with townhomes and
condos mostly flat.<span style="mso-spacerun: yes;"> </span>South Florida had a
more modest two percent growth rate for single family homes, but townhomes and
condos fell by nearly two percent over 2018.<span style="mso-spacerun: yes;">
</span>Prices continued to climb with the average single-family homes selling
for $360,000.00.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>2020 started
with a bang, with single family sales through February 2020 up thirteen percent
and townhomes and condos up twelve and one-half percent.<span style="mso-spacerun: yes;"> </span>Nationally, new home sales jumped nearly
eight percent, to a seasonally adjusted annual rate of 764,000 units last February,
the highest level since July 2007.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Then the
virus hit, dramatically changing the real estate landscape.<span style="mso-spacerun: yes;"> </span>Reaction in the financial sector was
swift.<span style="mso-spacerun: yes;"> </span>At the beginning of March, the
Federal Reserve cut interest rates by one-half percent, then two weeks later,
another rate cut to make the borrowing rate from the Federal Reserve
essentially zero percent.<span style="mso-spacerun: yes;"> </span>The goal was
to make money cheaper and protect the economy from falling into recession.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Despite these
moves, and now a promise of an over one trillion-dollar infusion by the federal
government, the stock market has dropped dramatically, losing nearly 1/3<sup>rd</sup>
of its value since record highs on February 12.<span style="mso-spacerun: yes;">
</span>This has caused the yield on treasury bills to also fall dramatically,
falling nearly one percent in one month.<span style="mso-spacerun: yes;">
</span>The 10-year treasury yield, the rate most correlated with mortgages, has
fallen from 1.5% in mid-February to below one percent on March 21.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>This has led
to a drop in home mortgage rates, perhaps the one silver lining in this
otherwise catastrophic problem.<span style="mso-spacerun: yes;">
</span>Thirty-year fixed rates have remained low, dropping from five percent in
late 2018 to three and three quarters to start 2020.<span style="mso-spacerun: yes;"> </span>Rates dipped as low as to three and one
quarter (a record all-time low) on March 5 amid worsening virus news but have
now increased to mid to high threes in response to the large number of loan
applications inundating lenders.<span style="mso-tab-count: 1;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Once the
backlog lessens, and assuming the commitment to buy mortgage back securities by
the Federal Reserve continues (started at 200 billion and could go over 1
trillion), rates will likely again fall, with some predicting rates at or below
three percent by June 2020. <span style="mso-spacerun: yes;"> </span>If you are
currently paying over four percent on your home mortgage you should watch these
rates carefully and be prepared to lock in timely.<span style="mso-spacerun: yes;"> </span>On a typical $300,000.00 loan, a one percent
drop in interest will save over $2,000 the first year.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Closing on
these new loans, as well as existing home sales, has become a challenge for
attorneys and title companies due to all the movement restrictions.<span style="mso-spacerun: yes;"> </span>However, a new law that went into effect on
January 1 is providing some relief for those still willing to close on sales
and refinances.<span style="mso-spacerun: yes;"> </span>The law now allows for
remote online notarization of legal documents, including affidavits, deeds and
mortgages.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Using a
computer equipped with a webcam, two forms of photo identification and a
cellphone that can take pictures and upload the images will be what is needed
to conduct a remote closing from any location, including overseas (for United
States citizens).<span style="mso-spacerun: yes;"> </span>A seller or
buyer/borrower will be given an email link to log into a special website to
conduct the closing.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>A common
setup will have a text messaging window and instructions on the left, documents
to sign in the middle and three video windows on the right.<span style="mso-spacerun: yes;"> </span>Once logged in the consumer will see
themselves in a video window, along with the notary public and the closing
agent.<span style="mso-spacerun: yes;"> </span>The user will hold-up their two
ids for the notary to review, and once confirmed as valid, the consumer will
use a special application on their cell phone to upload pictures of the ids for
further verification.<span style="mso-spacerun: yes;"> </span>Once verified, a
set of common, consumer credit derived multiple choice questions, will further
verify identity, such as what street did you live on 1995 and what color car do
you own.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Once identity
is verified, the closing agent will direct the consumer to read and sign the
documents on screen using their choice of simulated signatures and
initials.<span style="mso-spacerun: yes;"> </span>As each document is signed,
the notary will notarize where needed, and for documents requiring witnesses,
such as deeds, both the notary and the closing agent will sign as witnesses to
the document.<span style="mso-spacerun: yes;"> </span>Once all closing documents
are signed, the consumer can either download a copy or wait for an emailed
copy.<span style="mso-spacerun: yes;"> </span>The closing agent will take the
documents that have to be recorded, such as mortgages and deeds, and
electronically submit them to the Clerk of the Circuit Court using an e-filing
program to official record the document<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>So now a
sequestered seller in California can sell and a vacationing buyer/borrower
stuck in Italy can buy and close on their loan as if they had flown in and
closed at the closing agent's office.<span style="mso-spacerun: yes;">
</span>With low rates and remote closings, the devastation to the real estate
industry from the virus will be partially blunted, but make no mistake, it will
hurt sales dramatically and may take months or the rest of the year to recover.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i>Michael J Posner, Esq., is a partner in Ward, Damon,
Posner, Pheterson & Bleau, P.L. a mid-sized real estate and
business-oriented law firm serving all of South Florida, with three offices in
Palm Beach County.<span style="mso-spacerun: yes;"> </span>They specialize in
real estate law and can assist sellers and purchaser remotely with closing and
financing of residential and commercial real estate.<span style="mso-spacerun: yes;"> </span>They can be reached at 561.594.1452 or at
mjposner@warddamon.com<o:p></o:p></i></div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com3tag:blogger.com,1999:blog-5703675747421822056.post-49023130448083390522019-12-24T09:38:00.005-05:002019-12-24T09:38:44.791-05:00“1031” TAX FREE EXCHANGES<br />
<div class="MsoNormal" style="line-height: 150%;">
Since
the 1920s, property owners could trade investment property on a tax-free
basis. The only catch was that you had
to find someone to trade properties with you simultaneously. Mr. Starker had investment property he wanted
to trade, but no one to trade with, so being resourceful, he sold his
investment property and immediately used all of the proceeds to buy another,
claiming that he had really traded the property, that his investment was
converted to tangible funds for only a short period of time, and that should
not be counted against him for tax purposes.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
Unfortunately,
the <st1:stockticker w:st="on">IRS</st1:stockticker> did not agree, and they
demanded he pay the profits on his sale.
This result was challenged by Starker and he eventually won,
successfully deferring his profits from his sale.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
In
order to address this result, Congress approved a revision to the Tax Code to authorize
“Tax Free Exchanges” for certain types of real and personal property. This code section created a labyrinth of
regulation, requirements, issues and strict timelines that must be complied
with for a successful tax-free exchange.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
The
most common 1031 exchange is the sale of real estate with all the proceeds used
to buy new investment property. For
example, Mr. Jones owns a building in Scranton that he bought for
$100,000. Assuming no depreciation or
capital improvements, his purchase price is his basis in the property which he
wants to sell, which is often referred to as the “relinquished property.”<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
In
2019 Mr. Jones’ building is now worth 1.6 million dollars. If he sells and pockets the money, he will
owe almost $225-300k in capital gains taxes.
However, if Mr. Jones uses the proceeds from the sale to buy a building
in Florida, he can defer all the tax due.
<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
Note
this is not tax avoidance, because the new apartment in Florida, called the
“replacement property” will also have a basis of $100,000. When it is sold in the future, the gain will
be recaptured.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
In
order to effectuate a 1031 exchange, a seller of relinquished property must
enter into an exchange agreement with an independent third party prior to
closing, called a Qualified Intermediary.
Once the relinquished property is sold, the net proceeds must be
directly delivered to the QI. In no case
can the money go to the Seller or his agents, as the fiction of “no control”
over the sale proceeds is required to protect the tax-free exchange.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
Within
45 days of the sale of the relinquished property, the Seller must identify the
replacement property by written notice to the QI. Up to 3 properties can be identified without special
consequences.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
The
seller has 180 days to close on the identified property(ies), with the monies
held in escrow by the QI transferred directly to the seller of the replacement
property. If the closing is not timely
completed the exchange fails, and the tax becomes due. Please note that if the 180-day window
overlaps April 15, you must file for an extension, or your window will be terminate
on April 15.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
When
originally promulgated, 1031 exchanges required deeding of the relinquished and
replacement properties to the QI, resulting in extra costs and potential title
issues. However, the <st1:stockticker w:st="on">IRS</st1:stockticker> now allows direct deeding, which eliminates this
step. However, the QI should still be
listed as the seller or buyer on your closing statement, to reflect the
exchange status of the transaction.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
While
1031 exchanges are limited to investment property, it does not mean that you
can not invest in residential real estate.
For example, if you are selling investment property with a large gain,
it is permissible to complete and exchange that property for a residence in Florida,
so long as your initial intent is to use same as an investment property. While there are no promulgated time periods
for establishing investment intent, the property should be rented for at least
two or more years in a true, arms length fashion, to avoid an <st1:stockticker w:st="on">IRS</st1:stockticker> challenge before you take personal residency of
the replacement property.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
1031
exchanges are not limited to equal swaps of value. You can make a partial deferment by buying a
lesser value property, with the taxes prorated on the percentage difference in
value between the relinquished and the replacement property. 1031 exchange proceeds can be used to
leverage more than one replacement property and can be used to acquire a slice
of a much more expensive property, in the form of tenants in common purchase.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
One
key element of 1031 exchanges are the strict timelines relating to the time
frames. These are strictly applied and
exchanges outside these periods will be rejected. Reverse exchanges are also
permitted, allowing the acquisition of the replacement property up to 180 days
before the sale of the relinquished property.
<o:p></o:p></div>
<div align="center" class="MsoNormal" style="text-align: center;">
</div>
<div class="MsoNormal" style="line-height: 150%;">
As
exchanges are complicated, the cost of completing an exchange may make the benefit
of deferral of taxes less enticing. Our firm charges approximately $1,000.00
for a simple exchange, plus costs. In
addition, there are extra accounting charges for exchanges, and your sale
proceeds will be tied up at least 180 days, usually without interest, during
the exchange period. Therefore, a well
thought out exchange strategy, including a thorough tax analysis, should be
made prior to proceeding with an exchange.<o:p></o:p></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-83241332963187910622019-09-22T15:58:00.005-04:002019-09-22T15:58:50.811-04:00Fannie Mae and Freddie Mac Reorganization<div class="MsoNormal">
President Trump has just announced plans to seek substantial
reorganization of the Federal National Mortgage Association (FNMA) and known
commonly as Fannie Mae, and the Federal Home Loan Mortgage Corporation and
known commonly as Freddie Mac, the two main government sponsored entities that
provide the funds for nearly half of the residential mortgage loans in the
United States.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Fannie Mae
was formed in 1938 during the Roosevelt Administration as a government agency
to expand mortgage lending so as to encourage homeownership and home
building. Prior to its creation, most
mortgage loans were short term with a balloon feature, as banks were mostly
dependent on their own savings accounts to fund the home loans. Any long-term
lending meant tying up capital, precluding new, potentially more lucrative, new
home loans and with defaults as high as 25% in the 1930s. substantial risk<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Fannie Mae
allowed banks to make long term, fixed rate mortgages without the commensurate
tying up their capital (or default risk) by buying the mortgage loans from banks. They created a secondary mortgage market wherein
loans purchased by Fannie Mae would be sold as collateralized mortgage
obligations or later as mortgage-backed securities (MBS) to investors. This freed up the banks to make new loans and
receive a fee for each loan originated and sold to Fannie Mae. In addition, the loans sold by Fannie Mae
were guaranteed by the full faith and credit of the United States making the
loans less risky even if the underlying borrower stopped payment and the
mortgage was foreclosed.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In 1954,
Fannie Mae was reorganized into a mixed ownership corporation, selling off
common shares to the public while the federal government retained control
through its ownership of Fannie Mae preferred shares. Further changes occurred in 1968 when Fannie
Mae was converted into a fully private corporation, splitting the entity into
Fannie Mae and the Government National Mortgage Association (commonly known as
Ginnie Mae, which remained a government organization, and which insures certain
mortgages such as loans by the Veteran’s Administration). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
To increase competition
in the secondary mortgage market (which Fannie Mae had controlled for thirty years),
the government created a new government sponsored entity, Freddie Mac. Freddie Mac was also a public company and
also bought mortgage loans for sale on the secondary market. <o:p></o:p></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
The 1970s saw
the steady rise of mortgage backed securities as the main vehicle of bundling
of large blocks of mortgage loans. The
attractiveness of these MBS was due, in part, to the implied belief that the
MBS was guaranteed by the United States, even though the entities were no
longer owned by the government. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The 1990s and
early 2000s saw the push towards expansion of the loan market to (i) increase
home ownership, (ii) expand lending in areas that were previously avoided by
lenders (known as redlining), and (iii) assist low to moderate income parties
to obtain a mortgage loan. This led to
loosening of credit standards to meet these homeownership goals. In addition, competition from private
investment companies, who were also bundling more attractively priced mortgage
backed securities, led to a more aggressive, riskier approach in lending
approval by Fannie and Freddie<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This led to
the subprime mortgage crisis in the mid to late 2000s with substantial defaults
and failures of private investment firms and banks. As of 2008, Fannie and Freddie owned one-half
of the estimated 12 trillion-dollar mortgage market, and a true public collapse
would have substantially damaged an already weak home loan market. Instead, and as a result of mounting losses
at Fannie and Freddie, the federal government placed both entities into
conservatorship (essentially bankruptcy) to stabilize the housing market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
After
investing hundreds of billions of dollars into Freddie and Fannie, the
institutions stabilized, and eventually became profitable, paying back the
monies invested. In fact, they have now
repaid the full amount invested and a profit of nearly 110 billion dollars to
the federal coffers. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Given this
state of affairs, and the deregulatory mindset of the President, it is no
surprise that he would propose modifying or even ending conservatorship. The stated goal is to create a limited role
for the federal government in the housing finance system, enhance taxpayer
protections and increase the role of private sector competition. This would be done by reducing the dividend
paid to the federal government, allowing Fannie and Freddie to increase its
capital reserve (now at only three billion dollars), a limited public offering
and the long-term goal of total privatization.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Given a
divided Congress and the bad taste of 2008’s housing crisis, it appears that
any materially changes may take years to settle. In the meantime, low interest rates and high
profits continue to benefit the federal government by holding onto Fannie and
Freddie.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<i><span style="font-family: "Arrus BT",serif; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael
J Posner, Esq., is a former Value Adjustment Board Commissioner, a board-certified
real estate attorney and a partner in Ward Damon a mid-sized real estate and
business oriented law firm with offices in Palm Beach County that handles
purchase and refinance closing throughout South Florida. They can be reached at
561.594.1452, or at </span></i><span style="font-family: "Arrus BT",serif; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><a href="mailto:mjposner@warddamon.com"><i>mjposner@warddamon.com</i></a></span>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-63695759426727471982019-08-21T07:32:00.000-04:002019-08-21T07:32:07.805-04:00Real Estate Update 2019<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"> The biggest change in the real estate market this year has been the dramatic decline in the interest rate on mortgage. After enjoying several years of very low rates, the strong economy, rising federal rates and inflation caused rates to rise substantially last year, with the average 30-year fixed rate mortgage in August 2018 reaching 4.5% and climbing to a peak of nearly 5% in November, 2018. Since then, the average has fallen 134 basis points to about 3.6%. This means that the monthly cost of a $250,000 mortgage has decreased from $1,332 to $1,136, a savings of $196 per month. </span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"> Lower rates also mean improved housing affordability. In May of 2018, national housing buying power was at $361,184. One year later, the index increased to $391,913, or over $30,000 more in affordability. In Florida the year-over data went from $314,574 to $341,844, or over $27,000 more in home affordability. Nationally, this is due to a combination of falling interest rates and a decline in the real house prices of almost 4%, but in the same time period Florida home prices has actually increased nearly 9%.</span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"> For many homebuyers, a thirty-year fixed rate mortgage is not the best choice. Only about 1/3 of homeowners stay in the same home for more than ten years. That means a majority of buyer/borrowers stay less than ten years. Therefore, an adjustable rate mortgage (an ARM) with a fixed term (5-, 7- and 10-year products are available) before adjusting may be a better alternative. Currently a 10-year ARM can be obtained at about 3.1%. This is a half-point savings, which, on a $250,000 mortgage costs $1,067 per month, a savings of $69 per month. Over ten years that equals $8,280 in lower payments, and another $3,500 in less interest, for a total savings of $11,780.</span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"> For sellers looking to sell their own homes (FSBOs or “for sale by owners”), there is a new alternative to craigslist. Facebook Marketplace is a free online site where an owner can list a home for sale or rent. Unlike craigslist, which gives total anonymity, Facebook shows you who the sellers are so that there is (hopefully) a lower risk of a scam. </span></div>
<div align="left" class="MsoNormal">
<br /></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"> If you are considering selling on your own, you can still place your home in the local multiple listing service (MLS) at very low cost. Companies like flatfee.com charge $95.00 to list your home (with packages to include more photos at higher prices). This gets you six months in the MLS and a listing on realtor.com. If you want to attract buyers working with a local real estate agent, you will still need to offer a cooperating broker commission to incentivize these agents to show their customers your home. This means paying 2-3% of the sales price to the buyer’s agent.</span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: "Times New Roman", serif;"> August is the time for the Notice of Proposed Property Taxes, otherwise known as the “Truth in Millage” (TRIM) Notices from the Palm Beach County Property Appraiser. These should be examined carefully and if there are valuation or exemption </span><span style="font-family: "Times New Roman", serif;">issues, a Petition to the Value Adjustment Board should be filed. These are due the 25th day following the mailing of the TRIM notice, but such time period may be extended if the petitioner can establish a good faith basis for a late filing.</span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"> </span><span style="font-family: "Times New Roman", serif;">Many petitions are resolved pre-hearing by the Appraiser’s office, but if not, a quasi-judicial hearing is held by in front of an attorney (for exemption issues) or an appraiser (for value issues) appointed by the County. Because the issues can be complex, and considering the cost of losing an otherwise valid claim, I recommend that an owner hire an exemption or valuation expert to review the case and, if warranted after review, to represent an owner at the hearing.</span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"><br /></span></div>
<div align="left" class="MsoNormal">
<span style="font-family: Times New Roman, serif;"> </span><span style="font-family: "Times New Roman", serif;">With values continuing to rise despite the 3% homestead cap and the 10% non-homestead cap, tax revenues continue to rise, allowing the County to maintain the same tax rate. However, voters last November approved a new property tax to help fund public schools. An additional $1.00 for each $1,000 in property value will be assessed for the next four years with the goal to raise 800 million dollars for schools. With a median tax value of $261,900, a homeowner with a homestead exemption of $50,000 will pay an additional $211 in property taxes to cover this new tax.</span></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-90614041634779980092019-08-19T09:13:00.002-04:002019-08-19T09:13:12.520-04:00Understanding Surveys<br />
<div class="MsoNormal">
If you ever purchased a home with a mortgage, or refinanced a
home you acquired many years ago you may be asked to pay for a two dimensional
drawing of the boundary of your property together with the location of all
improvements shown thereon at a cost which can run several hundred dollars or
even more for very large properties. Many people are confused by this expense,
arguing that since the home has been located in its current position for years
if not decades why do they need to pay someone to redraw and locate what are
obviously perfectly good homes located in their proper position. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>This drawing
is called a Boundary or Land Survey and is one of the primary requirements of a
lender when purchasing/refinancing a home in Florida.<span style="mso-spacerun: yes;"> </span>The primary purpose of the Survey is to
ensure that all improvements located on a subject property are located within
the boundaries of that property. Furthermore, the purpose of the survey is to
show easements which could interfere with the improvements located on the
property, and to show encroachments of improvements either over the property
line onto adjoining property as well as encroachments from improvements on
neighboring property which encroach into the property being surveyed. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Virtually no
lender in Florida will make a loan without a Survey of the property being
completed.<span style="mso-spacerun: yes;"> </span>One of the main reasons is
the requirement that the Lender’s Title Insurance Policy must have the survey
exception deleted, which exception may only be deleted under certain
circumstances (including the requirement for a proper Survey.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Under Florida
law, the practice of surveying is limited to licensed professionals who have
met the minimum requirements for registration as a surveyor or mapper under
Florida law. These requirements are set forth in Chapter 472, Land Surveying and
Mapping, Florida Statutes.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>In order to
understand surveys, a person must first understand how property legal
descriptions are created. Traditionally, descriptions were created based on the
vast surveys of the United States created over two centuries ago. These
north-south and east-west grids created the starting points for locating
property and are known as metes and bounds descriptions. In order to facilitate
development, the concept of platting was created which took the metes and
bounds description and divided it into fixed lots which identify a specific
property in each subdivision. For example, what was once the North 60 feet of
the East 60 feet of the Southwest Quarter of the Northwest Quarter of Section
16, Township 23 South, Range 30 East, lying and being in Palm Beach County
became the platted property known as Lot 1, Happy Acres, recorded in Plat Book
7, Page 9 of the Public Records Beach County, Florida.<span style="mso-spacerun: yes;"> </span>Alternatively, condominiums described their
legal description of both the common areas and buildings within the Declaration
of Condominium itself, creating a legal description by unit and not by metes
and bounds of the underlying land.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>There are
several instances wherein the survey expense may be avoided. For example, a
condominium does not require a new survey because the original survey is
included in the recorded Declaration. This is sufficient to allow for the
deletion of the survey exception in the Lender’s Title Policy. In addition, if
the seller has an existing survey which is certified to that seller then that
survey may also be used if the seller is willing to execute an affidavit
stating that no new improvements have been installed on the subject property
since the date of that survey. Finally, a person not financing the purchase of
their property (a cash buyer) can waive the requirement of a survey, assuming
the risk of any possible survey defects.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>In addition
to providing the boundary description of a property, a licensed Surveyor can
provide an Elevation Certificate which is used to determine the elevation of property
pursuant to the Federal Floodplain Management Rules.<span style="mso-spacerun: yes;"> </span>This Certificate is used to determine whether
or not flood insurance is required or only optional.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>While survey
defects are rare, they do occur, and can include problems such as fences located
on other people’s property, improvements constructed over the property line or
constructed within required setbacks, easements which grant access rights to
third parties that are blocked by constructed improvements and even issues
relating to boundary lines and access and ownership to land abutting water or
to a public road. Therefore, the expense of a survey is worthwhile and can help
avoid these potential future problems that are unknowable without a proper
survey.</div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com0tag:blogger.com,1999:blog-5703675747421822056.post-14272438291506978172019-06-22T07:05:00.004-04:002019-06-22T07:05:41.349-04:00Reverse Mortgages Update<br />
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
A In 2015 I explained
reverse mortgages in this column.<span style="mso-spacerun: yes;">
</span>Recently an article published in USA Today on June 13, 2019 (<i>tinyurl.com/y36lvwjp</i>)
basically claimed that reverse mortgages were simply predatory lending designed
to steal seniors and the heirs homes without any benefit or knowledge.<span style="mso-spacerun: yes;"> </span>The flaw in the article is that it fails to
clearly mention several important facts:<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>1.<span style="mso-tab-count: 1;"> </span>Without
the loans, many seniors would have been forced to sell the homes anyway, due to
the inability to pau maintenance costs, existing loans or taxes and insurance; <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>2.<span style="mso-tab-count: 1;"> </span>No
one forced these seniors to take the loans and spend the money they received,
even if spent frivolously; <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>3.<span style="mso-tab-count: 1;"> </span>That
a majority of foreclosures occur not due to defaults relating to non-payment of
taxes or insurance but due to either abandonment of the home (residing in the
home is a condition of getting and keeping the loan) or death; <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>4.<span style="mso-tab-count: 1;"> </span>Claiming
that the heirs lost out on getting the home due to the reverse mortgage is a
false premise, because it presupposes that the heirs deserve the home even
though their parents needed and got to enjoy the benefits of the money; and <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>5.<span style="mso-tab-count: 1;"> </span>Many
foreclosures occur simply because many reverse mortgages were granted before
the crash, and the monies given were based on a higher pre-crash value.<span style="mso-spacerun: yes;"> </span>Combined with the accrued interest over 10 to
15 years (a key to how these work, seniors pay nothing during the term of the
loan) and all the costs of sale (as high as 8% for real estate commissions,
taxes, transfer taxes and title insurance), there is little to no equity left
to interest the heirs or the estate to consider selling the properties.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>As a Florida HUD Commissioner, I have
handled hundreds of reverse mortgage foreclosures for HUD.<span style="mso-spacerun: yes;"> </span>In only one instance was a foreclosure based
on the failure to pay taxes.<span style="mso-spacerun: yes;"> </span>All other
cases were either abandonment of the home or death.<span style="mso-spacerun: yes;"> </span>HUD is only obligated to wait one year after
abandonment of the home or death to begin a foreclosure action, but in all
cases, HUD gave the family more time to decide whether to sell or walk
away.<span style="mso-spacerun: yes;"> </span>In all my years, I have never
received a complaint from a senior or beneficiary that HUD has stolen their
home.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> A</span>s I stated in 2015 there are several
criticisms of the reverse mortgage program.<span style="mso-spacerun: yes;">
</span>High upfront costs are an issue and frequently not properly discussed
with borrowers.<span style="mso-spacerun: yes;"> </span>Interest rates are
higher than conventional loans.<span style="mso-spacerun: yes;"> </span>High
pressure sales tactics (including late night tv ads) have encouraged seniors to
take out reverse mortgages, spend the money on vacations and gifts, without
consideration of the ability to pay and maintain the property going
forward.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>As a result of the number of reverse
mortgage foreclosures, there was a revamping of the HUD program in 2017 to
address such issues.<span style="mso-spacerun: yes;"> </span>First, the mortgage
insurance premiums charged to fund the government’s guarantee of the loan has
changed.<span style="mso-spacerun: yes;"> </span>Instead of a floating premium
of up to 2.5% based on the amount advanced at closing and in the loan’s first
year, a lump sum of 2% is taken at closing.<span style="mso-spacerun: yes;">
</span>This could result in higher premiums for some borrowers.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>However, the monthly mortgage
insurance premium has been reduced from 1.25% to 0.5%, saving borrowers on the
accrued monthly charges at a rate of about $166 for each $50,000 borrowed.<span style="mso-spacerun: yes;"> </span>The new rules will benefit borrowers who use
their available funds at closing, but likely cost seniors who open a reverse
mortgage as a line of credit for future use without drawing out fund.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<span style="mso-tab-count: 1;"> </span>In addition, the new guidelines have
reduced the amount that can be borrowed.<span style="mso-spacerun: yes;">
</span>The maximum amount is a complicated formula based on the value of the
home, the age of the borrower and the interest rate.<span style="mso-spacerun: yes;"> </span>Lowering the amount borrowed will likely
reduce the number of foreclosures, benefiting both seniors and the guarantee
fund.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: .5in;">
A reverse mortgage
can be a great tool for many homeowners, but it is a program that should be
carefully reviewed to insure that it fits an individual’s needs. Discussions
with a cpa, your children and a HUD loan counselor are a must before taking out
a reverse mortgage.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: .5in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 0in; text-indent: 0in;">
<i style="mso-bidi-font-style: normal;">Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real
estate and business oriented law firm serving all of South Florida, with
offices in Palm Beach County.<span style="mso-spacerun: yes;"> </span>He serves
as the HUD Foreclosure Commissioner for the state of Florida.<span style="mso-spacerun: yes;"> </span>They can be reached at 561.594.1452 or by
e-mail at mjposner@warddamon.com<o:p></o:p></i></div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com1tag:blogger.com,1999:blog-5703675747421822056.post-56533806378075144642019-03-19T18:00:00.003-04:002019-03-19T18:00:19.806-04:00Trust Basics<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> The creation of a trust for estate planning is a valuable
tool that can be used to solve many specific needs, such as avoiding probate,
reducing estate taxes, creating a charitable legacy, providing for future
generations, protection of disabled or spendthrift beneficiaries, obtaining
Medicaid reimbursement and other estate needs.
Depending on the issue to be addressed, specific types of trust can be
created to provide for these goals.
Trusts can be complex or simple, can combine multiple outcomes, can be
standalone or incorporated into a will as a pour over trust. The most common types of trusts are as
follows:<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 1. <u>Revocable Trust</u>. A revocable trust that holds real and
personal property with the creator or grantor of the trust serving as the
trustee and initial beneficiary, with the power to terminate the trust at any time. This is the most common and is used to reduce
or eliminate the need for probate after death.
Upon the death of the grantor/trustee, a successor trust takes their
place and directs the distribution of the trust assets to the grantor’s
beneficiaries as directed in the trust.
A revocable trust does not provide creditor protection for the grantor
or the grantor’s assets in trust.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 2. <u>Irrevocable Trust</u>: An irrevocable
trust is similar to a revocable trust that holds real and personal property. However, the main difference is that the
grantor is not the trustee of the trust and does not have the power to
terminate or amend the trust after creation. Unlike a revocable trust, a
properly created irrevocable trust can provide creditor protection for the
grantor’s assets in trust.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 3. <u>Qualified Terminable Interest Property
or QTIP Trust</u>: QTIP Trusts are used
to gift a surviving spouse a lifetime income in an asset or property, and have
the remainder pass to a third party (like children from a previous marriage),
but gain the benefit of marital exemption from gift or estate tax that usually
requires the surviving spouse to obtain 100% title to the asset.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 4. <u>Credit Shelter Trust</u>: Allows for the first spouse to place the
value of the estate tax exemption in Trust at death with the remaining sum
passed tax free to the spouse. After the
death of the surviving spouse, the beneficiaries get the sheltered funds tax
free plus the surviving spouse’s funds with a full exemption as opposed to the
surviving spouse getting the whole estate and then passing on a large tax bill
to the beneficiaries.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 5. <u>Qualified Personal Residence Trust or
QPRT</u>: A QPRT Trust allows for the
owner of a valuable residence to place their home in trust for the purpose of
reducing the amount of gift tax that is incurred when transferring assets to a
beneficiary. The grantor of the trust
receives exclusive rent-free use, possession and enjoyment of the residence
during the term of the QPRT and any tax deduction benefit for taxes they
pay. The benefit only works if the
grantor outlives the term of the trust, when the property must be transferred
to the beneficiaries.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 6. <u>Charitable Trusts</u>: These are irrevocable trusts that provide
charitable benefits for the grantor and/or beneficiary. A Charitable Lead Trust
gives the designated charity payments for a fixed term and at the end of the
trust term, the remaining funds go to
the designated beneficiary tax free. A Charitable
Remainder Trust gives the trust funds to the charity subject to the charities’
obligation to pay the beneficiary income from the trust funds for up to twenty
years with an income spread of not less than 5% or more than 50% of the initial
fair market value of the trust’s assets<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 7. <u>Special Needs Trust</u>: An irrevocable trust that allows the disabled
beneficiary to enjoy the use of property that is held in the trust for his or
her benefit, while at the same time allowing the beneficiary to receive essential
needs-based government benefits such as Medicaid and Supplemental Security
Income.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 8. <u>Irrevocable Asset Protection Trusts
for Medicaid</u>: A specialized irrevocable
trust created to allow the preservation of principal to prevent the loss for
medical expenses that would otherwise be covered by Medicaid benefits. The trust must be created and funded at least
five years before applying for Medicaid benefits. A child can usually serve as Trustee, and
income from the trust can be paid to the grantor.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"> 9. <u>Spendthrift Trust</u>: A spendthrift trust is a type of trust (or a
provision in a trust) that prevents the creditors of a trust reaching the
beneficiary’s interest by forcing the Trustee to pay over the claimed sum. This does not apply to federal and state
taxes or an enforceable support order.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-size: 12pt;"><span style="font-family: Times, Times New Roman, serif;"> Creation of an appropriate trust can result in substantial
benefits to both the grantor and the beneficiary. While estate taxes are not currently an issue
today due to the high exemption (11 million for individuals, 22 million for
couples), these exemptions can change so proper planning is still
warranted. Choosing the right attorney,
financial planner and tax accountant can assist in creating the proper tools
without wasting funds on unnecessary products.</span></span>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com3tag:blogger.com,1999:blog-5703675747421822056.post-29319252158848527002019-03-19T17:45:00.000-04:002019-03-19T17:45:00.521-04:004 Steps To Real Estate Investing (guest blog)Did You Know that 90% of millionaires have one thing in common? This investment is what<br />
helped countless entrepreneurs into millionaire status.<br />
<br />
Real Estate Investing. Many millionaires owe their success to this strategy.<br />
<br />
No wonder house flipping has spiked in the last few years!<br />
<br />
But real estate investing is easier said than done. With the right tools, you can start real estate<br />
investing and be one step closing to your million.<br />
<br />
Step 1: Know Where To Invest<br />
<br />
Realtors love to say this: “It’s all about the location.” But there’s a reason why everyone repeats<br />
this.<br />
<br />
“Finding the right locations is key to being a successful real estate Investor. In order to<br />
maximize the return on interest of a property it has to be sellable, and if the area is bad, it’s hard<br />
to hit the ROI.” - Loren Howard, Phoenix Hard Money Lender, Prime Plus Mortgages.<br />
<br />
How can you find the right areas to invest in?<br />
<br />
Thankfully, sites like Zillow and Trulia make it easy to find the right areas. Your ideal investing<br />
locations will have the following:<br />
<br />
● Low Crime<br />
● Good Schools<br />
● Room For Growth<br />
● Easy Access To Amenities<br />
● Nearby Business Parks<br />
<br />
If your heart is set on a property that does not have some of the following, that is okay. Areas with<br />
strong development promise can be very smart investments, so make sure to keep an eye on<br />
the commercial real estate projections.<br />
<br />
2: Know What Kind Of Investment<br />
<br />
Know what kind of investment strategy works best for you before you begin looking at properties<br />
will save you a major headache.<br />
<br />
The 2 most common types of real estate investing are:<br />
<br />
A. House Flipping<br />
B. Renting<br />
<br />
Similar to the shows, house flipping means that you buy undervalued properties, make crucial<br />
repairs, and ‘flipping’ them for a profit. For first-time investors house flipping can be tricky, as it<br />
requires a lot of capital to not only purchase the property, and fund the repairs. Thankfully Fix<br />
and Flip Loans make funding first-time investments easy.<br />
<br />
Some first-time investors find that renting is easy for a first-time real estate investment as it<br />
guarantees a monthly passive income to fuel your other investments. Home Rehab loans are<br />
especially helpful for first-time investors. Home Rehab Loans make upgrading your properties<br />
easy and making it easier to rent your property<br />
<br />
3: Pick Your Investing Team<br />
<br />
It takes a village. One of the most important real estate tools you can have is a great team<br />
behind you. Here are the top 4 team members you need to have to be a successful real estate<br />
investor:<br />
<br />
1. Contractor<br />
2. Lender<br />
3. Accountant<br />
4. Realtor<br />
<br />
Each of these team members makes real estate investing easy, from building, financing, listing<br />
and keeping the books clean. Finding these valuable team members can be tricky, but a well<br />
oiled investing machine brings you one step closer to successful real estate investing.<br />
<br />
4: Fund Your Investments<br />
<br />
Many first time investors don’t know where to go for funding. For most real estate investors<br />
finding funds for their first-time investment can be nearly impossible, especially with high credit<br />
scores requirements, proof of income, and other strings attached,<br />
<br />
For house flippers looking to fund their first real estate investments, hard money loans say yes,<br />
in a sea of no’s. Hard money lenders use properties After Repair Value (ARV) to determine the<br />
loan amount. That means with a Hard Money Loan you can get funded for the property, and<br />
repairs, and still, make a profit.<br />
<br />
Without having to wait for funds, you can purchase more properties and start investing today!<br />
Summary:<br />
<br />
Real Estate Investing can be tricky, but it doesn’t have to be. By having the following knowledge<br />
and tools you can start investing smarter today.<br />
<br />
● Step 1: Know Where To Invest. Pick the right locations in your city that you know will<br />
have high market demand, like those with the best schools, or plans for business parks.<br />
<br />
● Step 2: Know What Kind Of Investment. Know the ins and outs of your preferred type of<br />
real estate investment and learn what other real estate investors are doing to be more<br />
successful.<br />
<br />
● Step 3: Pick Your Investing Team. Make your real estate investing A-team that can help<br />
you find, upgrade, list and fund your investments.<br />
<br />
● Step 4: Fund Your Investments. Have funding to put down on great properties before<br />
someone else picks up a great property. Hard money loans are fast, don’t require credit<br />
checks, and are more flexible than a traditional mortgage.<br />
<br />
What’s the best real estate investing advice you have received?<br />
<br />
<i>Catherine Way has never been able to stop talking. She took her love of talking and graduated</i><br />
<i>from Michigan State University with her Bachelor’s of Advertising with a specialization in</i><br />
<i>Graphic Design. She spends her free time finding new ways to talk to people, through writing,</i><br />
<i>designing, dancing, and more. You can see her newest creations here. <a href="https://www.linkedin.com/in/catherineway07/">You can see her new creations here</a></i>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com0tag:blogger.com,1999:blog-5703675747421822056.post-30044989596186245422019-03-19T17:40:00.001-04:002019-03-19T17:40:02.095-04:00Condominium and HOA Approval Issues - Part 2<br />
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>In
addition to the issue of Association and landlord denying approvals based on
criminal history, many Associations and landlords are restricting, limiting or
outright denying applicants based solely on credit history, employment issues
and past bad conduct unrelated to a criminal matter. These restrictions,
coupled with the already restrictive criminal matters, has made purchasing and
leasing property even more difficult for those people with a previous felony
conviction, bad credit, short employment history, or other background matter
that, in the past, would not have prohibited the purchasing or leasing of
property as long as the prospective buyer or tenant had sufficient funds to
consummate the transaction.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>A
credit check of a prospective buyer or tenant is now a very common requirement
of Associations and landlords. Obtaining the credit score of any prospective
purchaser or tenant is an inexpensive way to weed out candidates who may not be
financially responsible. The real question is whether or not a credit score is
determinative of a person’s ability to pay assessments as an owner or rent as a
tenant.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>Much
of what determines a person’s credit score is proprietary based on the formula created
by the Fair Isaac Corporation.<span style="mso-spacerun: yes;"> </span>The
company uses credit data included in a consumer’s credit report consisting of
the following five elements: payment history; credit utilization; length of
credit history; new credit and credit mix.<span style="mso-spacerun: yes;">
</span>These five items are then put through a proprietary system by the Fair
Isaac Corporation to create a credit score which ranges from 300 to 850 (for
the most common FICO8 program).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>The
FICO score does not include a person’s employment, income or bank account
information. Therefore, having a low FICO score does not necessarily equate to
having low income or low savings. Many people who go through a divorce or a difficult
medical issue may have had their credit score fall substantially, either due to
a short-term inability to pay past due obligations, the running up of credit to
cover substantial medical expenses, or even have issues relating to a spouse or
child or issues due to identity theft.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>Fair
Isaac provides scoring but does not specifically state the value of each
number. However, a typical breakdown of the various scores is as follows:<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="margin-left: .5in; text-align: left; text-indent: .5in;">
<span style="font-family: "Times New Roman",serif;">580 and
below<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>very
poor credit score<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="margin-left: .5in; text-align: left; text-indent: .5in;">
<span style="font-family: "Times New Roman",serif;">580-660<span style="mso-tab-count: 2;"> </span>fair credit score<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="margin-left: .5in; text-align: left; text-indent: .5in;">
<span style="font-family: "Times New Roman",serif;">661-720<span style="mso-tab-count: 2;"> </span>good credit score<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="margin-left: .5in; text-align: left; text-indent: .5in;">
<span style="font-family: "Times New Roman",serif;">721-799<span style="mso-tab-count: 2;"> </span>very good credit score<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="margin-left: .5in; text-align: left; text-indent: .5in;">
<span style="font-family: "Times New Roman",serif;">800+<span style="mso-tab-count: 3;"> </span>excellent credit
score<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>Utilizing
the foregoing system, many landlords and Associations are conditioning approval
on a minimum credit score for each occupant over 18. This score generally
ranges from 620 to 700 as a minimum for approva,l regardless of an applicant’s
other information. In addition, many Associations and landlords impose
conditional approval on scores below 700, adding additional requirements that
other applicants may not have to address, such as additional deposits or a third-party
guarantor.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>Currently,
the average credit score is 695, which is below the threshold that some
Associations or landlords have established for approval. In addition, a
majority of Americans have a credit score between 660 and 720, and at least 15%
have no credit score.<span style="mso-spacerun: yes;"> </span>This means many
candidates for purchasing or leasing a property may not qualify due to credit
score restrictions.<span style="mso-spacerun: yes;"> </span>At least one third
of all consumers have a credit score below 620. These low scores can make
purchasing or leasing a property virtually impossible, and a whole industry has
sprung up to help people improve their credit scores due to the debilitating
effects that a low score can have.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>Some
consumer advocates have stated that imposing restrictions on leasing and
purchasing based on credit score is a form of discrimination, but so far no
guidelines have been promulgated by the HUD regarding same as they have done
for the issues relating to approvals and past felonies. It is possible that
such guidelines may arise, or a court may determine that the usage of a credit
score to deny an applicant is, on its face, discriminatory.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<span style="font-family: "Times New Roman",serif;"><span style="mso-tab-count: 1;"> </span>In
processing any application for lease or purchase approval, it is recommended
that the credit score be a factor but not the only determining factor in
whether or not to grant approval. Age, employment, income and savings should be
used side-by-side with the credit score in order to determine an applicant’s
suitability and financial ability. Furthermore, if an applicant is denied as a
result of the credit score, it is imperative that the Association or landlord
provide adequate written notice of the denial based on credit score and the
name and address of the credit reporting agency that provided the credit
information.<o:p></o:p></span></div>
<div align="left" class="MsoNormal" style="text-align: left;">
<br /></div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-61611146868567478532019-01-27T09:55:00.002-05:002019-01-27T09:55:29.464-05:00Condominium and HOA Approval Issues - Part 1<br />
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>A few years ago a
client sought to purchase a small cooperative unit on Palm Beach at a price far
south of $100,000.00.It was a cash purchase by a very successful independent
contractor.<span style="mso-spacerun: yes;"> </span>The contract was summarily
rejected by the Cooperative Association without any written explanation.<span style="mso-spacerun: yes;"> </span>When pushed, they said it was an income
issue, they had just completed a large project with high monthly unit expenses,
and they were concerned that my client did not have sufficient “regular income”
to pay the estimated $1,300 extra per month.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>My client amended
the contract to add her daughter as a purchaser, and resubmitted the
application, showing that the daughter, a salaried employee made six figures a
year.<span style="mso-spacerun: yes;"> </span>The revised contract was also
summarily rejected by the Cooperative Association, again without any written
explanation.<span style="mso-spacerun: yes;"> </span>At this point my client
called me and after threatening the Association with a lawsuit, they agreed to
approve the sale, subject to our client maintaining a three year escrow of
assessments of nearly $40,000.<span style="mso-spacerun: yes;"> </span>While
there was a suspicion of animosity toward my client due to her religion, it was
never proven and she has had no further issues.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>This story
illustrates a growing problem for certain buyers and tenants looking to buy or
rent in many communities in South Florida.<span style="mso-spacerun: yes;">
</span>Communities are increasingly adopting tighter rules regarding ownership
and occupancy, in order to improve their communities and to reduce the number
of investors and renters in favor of family owners who will reside in the home
full time.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>The tools adopted
by Associations relate to criminal history, credit, employment and past
history.<span style="mso-spacerun: yes;"> </span>The starting point for any
Association is having the actual power to restrict ownership and leasing.<span style="mso-spacerun: yes;"> </span>This power must be in the Declaration of
Covenants or Declaration of Condominium.<span style="mso-spacerun: yes;">
</span>Absent enabling power to regulate sales and leases, the use of simple
Board level rules is suspect at best and most likely unenforceable if challenged
in court.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>Assuming the
power to regulate ownership and leasing is granted in the Declaration, the
Board has authority to establish rules regarding such powers (as long as such
rules are not unreasonable, discriminatory or exceed the authority granted in
the Declaration).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>To enforce these
rules, Associations require all applicants for ownership/residency to submit a
detailed application about their past living and employment history as well as
an applicant’s agreement to submit to a credit and criminal background check.
Fees for the application may be charged and are capped by the Condominium Act
at $100 per person (husband and wife are considered one person).<span style="mso-spacerun: yes;"> </span>Most Associations also charge for the
criminal/credit check, which can run $30-$70 per person.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>Many Associations
have adopted outright bans on any applicant with a criminal history, regardless
of the length of time since the act or the nature and severity of the criminal
act.<span style="mso-spacerun: yes;"> </span>These restrictions have been challenged
successfully based on the grounds that such bans are discriminatory in nature
since many felonious applicants are minorities.<span style="mso-spacerun: yes;">
</span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>The US Housing
and Urban Development has issued guidelines regarding this issue, after a study
showed that the recidivism rate for felons was no greater than non-felons after
seven years and the Supreme Court allowed challenges to rental restrictions
based on past criminal behavior.<span style="mso-spacerun: yes;"> </span>This
means that banning someone for a felony more than twenty years ago would, on
its face, be deemed discriminatory in most cases.<span style="mso-spacerun: yes;"> </span>In addition HUD requires Associations to
adopt reasonable rules regarding those with criminal backgrounds, including
whether a conviction was obtained, was the criminal conviction for a violent or
non-violent crime, how long ago was the crime committed, how old was applicant
at the time of the crime and other factors to show that the Association is
using the least discriminatory policies possible.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>At least two
exceptions exist with regard to the foregoing limitations, a criminal act
relating to a felony conviction for drug manufacturing and distribution and a
felony conviction as a sexual predator.<span style="mso-spacerun: yes;">
</span>It appears that lifetime bans for these actions may be reasonable and
enforceable by an Association.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span>In my next post I will address the Associations review relating to credit, employment and life
history, and address possible compromises to assist owners and tenants in
obtaining approvals.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-spacerun: yes;"> </span><span style="text-transform: uppercase;"><o:p></o:p></span></div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com0tag:blogger.com,1999:blog-5703675747421822056.post-74446038994849980812018-10-31T07:48:00.002-04:002018-10-31T07:49:51.867-04:00Think you are ready to buy a house? Here's 4 signs (Guest Blog)<div dir="ltr" style="line-height: 1.44; margin-bottom: 3pt; margin-top: 24pt; text-align: justify;">
<img src="https://lh4.googleusercontent.com/keIzl2MywwxaA58C826mvafRtbcleRv5z28NAzlOaEhircB_416rANffXLT4E7_2sVcxSCy4U308RdswjDU61I4Df6GLwGujxMBgVZQ5Lg-UHaTGcEH7eK4K2kiMDP6ueLXtckjH" style="font-family: "Didact Gothic"; font-size: 26pt; font-weight: 700; white-space: pre-wrap;" /></div>
<div dir="ltr" style="line-height: 1.92; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"><img height="266" src="https://lh5.googleusercontent.com/3vFgIZpCInVmasrLINJXp_LMIjB7qrAdmtJAO-zIQpTdDCjdlCzEXtz7T4a9aYh-fv4iE1Ad94KVk1SjXSAIq-97XSszaIyKHMJvQI10miSbQccd_lLt_pSS3XVhQuqkT9BCPYHa" style="border: none; transform: rotate(0rad);" width="400" /></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">“Am I ready to buy a house, or should I just keep renting?”</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">It is </span><a href="https://www.apartmenttherapy.com/am-i-ready-to-buy-a-house-248835" style="text-decoration: none;"><span style="background-color: transparent; color: #fb9179; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: underline; vertical-align: baseline; white-space: pre;">one of the questions</span></a><span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"> that we hear most often and something</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">to which first-time home buyers often spend months, if not years, </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">trying to figure out the answer.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Below are a list of four tell-tale signs that you are ready to bite </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">the bullet and take the leap into home ownership:</span></div>
<h2 dir="ltr" style="line-height: 1.44; margin-bottom: 4pt; margin-top: 18pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">Sign #1: </span>You are ready to settle down</h2>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">The first sign that you are in the right mindset to become a </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">homeowner is that you are ready to stay put -- at least for a little while.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"><img alt="Settle down" height="266" src="https://lh5.googleusercontent.com/bRT6_yZbf-pNFoa1uWiVSjX1E8fbczwJJAj3Q2KU4c1uO4gvBDc5_8IWhZcIbpuT_4Q_K6m5YMbaikMG6USKhsO3x-cOCR25Lc4VBVzgvzzIsQojRvsrrv-CjabeV1GcTQXmZHAA" style="border: none; transform: rotate(0rad);" width="400" /></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Conventional wisdom states that in order for your purchase to </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">make financial sense, you’ll want to plan on staying put for at</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">least the next five years. When you sit down to think about house </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">hunting, you’ll want to use that time frame as your reference point.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">Ask yourself the following questions:</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; vertical-align: baseline; white-space: pre-wrap;"> <i>Can you see yourself staying at your job for that </i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<i><span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; vertical-align: baseline; white-space: pre-wrap;">long, or</span><span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"> will you be looking for new opportunities?</span></i></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"><i> If the right position came along, would you be willing </i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"><i>to move for it?</i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"><i> Do you like the area you are living in, or would you </i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"><i>like to explore other options?</i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;"><i> Do you see your living situation changing soon?</i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; vertical-align: baseline; white-space: pre-wrap;"><i> Are you planning on moving in with a significant </i></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: left;">
<i><span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; vertical-align: baseline; white-space: pre-wrap;">other </span><span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; white-space: pre-wrap;">or expanding your family?</span></i></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">If these questions make you squirmy, the idea of looking five </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">years into the future still feels a little too far ahead for you to </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">grasp, or you still want to see where life life takes you, you may </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">want to consider renting for a bit longer or thinking about </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">a </span><a href="https://www.openlistings.com/blog/buying-a-starter-home-or-forever-home/" style="text-decoration: none;"><span style="background-color: transparent; color: #fb9179; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: underline; vertical-align: baseline; white-space: pre;">for-a-few-years home vs. a forever home</span></a><span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">.</span></div>
<h2 dir="ltr" style="line-height: 1.44; margin-bottom: 4pt; margin-top: 18pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">2. You are done living paycheck-to-paycheck</span></h2>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Let’s face it, becoming a homeowner is expensive.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"><img alt="Home ownership is expensive" height="146" src="https://lh6.googleusercontent.com/8PRL6KyPUyaWK3hZZMVMAxISgAhp7NYQ8TnmQNlkTJKLfiE_VvlS1AluSPt2AGmveXSHMNz2tEGD5KGVOe3EejJWoCAItxHaP7ytX05_c59ki0b2dd7MdH92OXiIuQTQZO-YshpN" style="border: none; transform: rotate(0rad);" width="400" /></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Not only is there a monthly mortgage mortgage payment to</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">consider, which will likely be more than your current rent </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">check, but prospective home buyers need to be prepared to </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">come up with a sizable down payment, shoulder a portion </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">of the closing costs, and have the dough to take care of any </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">necessary repairs.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Luckily, there is a way that you can prepare for the added </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">financial pressure before the big day comes and understand </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<a href="https://www.openlistings.com/blog/how-much-house-can-you-afford-get-your-answer-with-these-11-key-considerations/" style="text-decoration: none;"><span style="background-color: transparent; color: #fb9179; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: underline; vertical-align: baseline; white-space: pre;">how much house you can afford</span></a><span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">. Use a mortgage calculator </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">to estimate what a monthly payment could based on the </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">type of home you are looking to buy. Then, subtract the </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">amount you pay in rent each month, and aim to put the </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">the remainder into savings.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Start by working towards a down payment that could </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">be worth 3%-10% of a home’s sale price, and then move </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">onto a separate emergency fund.</span></div>
<h2 dir="ltr" style="line-height: 1.44; margin-bottom: 4pt; margin-top: 18pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">3. You are ready for more responsibility</span></h2>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;"><img alt="Responsible home owner" height="266" src="https://lh4.googleusercontent.com/ujmgU0sSASwRiroHEFKpqLXpVG6usvQ6vIMzpone_KfCsViimlwALatby_J5grY1NFNF5EgCqH4rNlPyWVWslcC_mMn5yaPki5RTpsmtqQdZAzBfjgle09UdmvnLS8P1CrNyxn1x" style="border: none; transform: rotate(0rad);" width="400" /></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Once you find a home and actually buy it, that is really </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">where all the fun begins.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Yes, </span><a href="https://blog.allstate.com/the-am-i-ready-to-buy-a-house-checklist/" style="text-decoration: none;"><span style="background-color: transparent; color: #fb9179; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: underline; vertical-align: baseline; white-space: pre;">owning a home</span></a><span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"> means that you have a lot more </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">freedom to improve the property as you see fit -- </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">whether that means putting in an entirely new kitchen </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">or redoing the hardwood floors.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">However, in addition to that creative freedom comes </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">an added layer of responsibility. As the homeowner, </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">you are the one who is responsible for any necessary </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">maintenance and upkeep on the property.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Think about what you are like as a tenant now.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Are you willing to roll up your sleeves and help </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">with small tasks or are you relieved to know that </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">you have someone to call? If you are less handy, </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">you may want to take some time to familiarize yourself </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">with common home maintenance tasks before committing </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">to buying anything. It always helps to have a fair idea of </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">what you are getting into.</span></div>
<h2 dir="ltr" style="line-height: 1.44; margin-bottom: 4pt; margin-top: 18pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;">4. You know what you are looking for</span></h2>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 18pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: none; vertical-align: baseline; white-space: pre;"><img alt="Know your house hunt" height="266" src="https://lh4.googleusercontent.com/adMOo__M4I0QSNsVJx6f5Vu7wpBKIyzC9a0Munny_R0qVAZfZ-prHj4ErJZ8jFmY8EBfs5m3XHFSiD3nT6HfFRVucNogtD7FziLIQMiAUa8_8AZyshTR5Yo9cC6RaytHmU4BoEim" style="border: none; transform: rotate(0rad);" width="400" /></span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Last, but not least, though it may sound self-explanatory, </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">when you are trying to determine whether or not you are </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">ready to buy a home, it is useful to have an idea of what</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">you are looking for.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">You don’t have to have every single detail set in stone. </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">(In fact, it is preferable if you leave some room to flexibility</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">in your home search.) That said, though, having a basic </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">set of parameters in mind will make the home buying </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">process go much easier.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">Here, you’ll want to think about the most important </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">factors that you absolutely must have in a home. These </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">will be the things that you would not feel comfortable </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">buying a home without. This may include details like </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">your preferred location, an ideal number of bedrooms and </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">bathrooms, a target sale price, or any specific must-have </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">features like that perfect picture window view.</span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">If you have a strong idea of your must-haves and can't </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">see that changing in the near future, and the above signs </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">sound like you, </span><a href="https://www.moneyunder30.com/how-do-you-know-youre-ready-to-buy-a-home" style="text-decoration: none;"><span style="background-color: transparent; color: #fb9179; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 700; text-decoration: underline; vertical-align: baseline; white-space: pre;">you may just be ready</span></a><span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;"> to take the </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">plunge into home ownership. If not, there is no </span></div>
<div dir="ltr" style="line-height: 2.4; margin-bottom: 0pt; margin-top: 0pt; text-align: justify;">
<span style="background-color: transparent; color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: normal; font-variant: normal; font-weight: 400; text-decoration: none; vertical-align: baseline; white-space: pre;">shame in the game waiting.</span></div>
<div style="text-align: justify;">
<span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">This </span><a href="https://www.openlistings.com/blog/am-i-ready-to-buy-a-house/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "didact gothic"; font-size: 12pt; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">article</span></a><span style="color: #1a1919; font-family: "didact gothic"; font-size: 12pt; font-style: italic; vertical-align: baseline; white-space: pre-wrap;"> originally </span><span style="color: #1a1919; font-family: "Didact Gothic"; font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">appeared on </span><a href="https://www.openlistings.com/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "Didact Gothic"; font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">OpenListings</span></a><span style="color: #1a1919; font-family: "Didact Gothic"; font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">.</span></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com5tag:blogger.com,1999:blog-5703675747421822056.post-60293037580679880702018-10-29T19:15:00.003-04:002018-10-29T19:15:36.219-04:00New Home Purchase Scams<br />
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I just purchased my first new home in sixteen years and my
family was very excited.<span style="mso-spacerun: yes;"> </span>We still have
our old house to sell, which gives us the luxury of the slow move, but with the
burden of carrying two houses.<span style="mso-spacerun: yes;"> </span>Since we
moved in we have been inundated with unsolicited mail, many of which are either
scams or overpriced rip-offs.<o:p></o:p></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>The most
direct scam was a very official looking letter that offered to provide me with
a copy of my deed and property appraiser’s report for the small price of only
$86.00, with free shipping.<span style="mso-spacerun: yes;"> </span>This type of
letter preys on people’s fear, by implying in legalese that these are “must
have” documents.<span style="mso-spacerun: yes;"> </span>This company simply
downloads the information, for free from the county, and then passes it off as
if it was some valuable, expensive and hard service to justify the price.<o:p></o:p></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>If you do not
have a copy or the original of your deed, you can download a copy from <i style="mso-bidi-font-style: normal;">oris.co.palm-beach.fl.us/or_web1/or_sch_1.asp</i>.<span style="mso-spacerun: yes;"> </span>In the search box, type your name (last first
with no comma) and you can restrict the results to deeds, by placing a “D” in Restrict
Search by Document Type Code box.<span style="mso-spacerun: yes;"> </span>From
the list, select the deed you want, then select “get image” to see a copy.<span style="mso-spacerun: yes;"> </span>From that screen you can print or save a copy
as a pdf (with a big This is Not a Certified Copy watermark).<span style="mso-spacerun: yes;"> </span>If you want a certified copy of your deed,
you can request a copy by mail to Clerk & Comptroller, Palm Beach County, P.O.
Box 4526, West Palm Beach, FL 33402.<o:p></o:p></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>When ordering
a deed, you will need to include the Official Records Book and Page and the
number of pages of the deed, along with payment.<span style="mso-spacerun: yes;"> </span>The charge is usually $1.00 per page plus an
extra $2.00 to certify the copy.<span style="mso-spacerun: yes;"> </span>So a
two page deed will only costs $4.00 plus postage, far cheaper than the scam
artists.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>If you want
the information available from the property appraiser, simply navigate to <a href="http://www.pbcgov.org/papa"><i style="mso-bidi-font-style: normal;">www.pbcgov.org/papa</i></a>.<span style="mso-spacerun: yes;"> </span>Input your name (if you closed recently it
will take a while to be updated, I closed September 7 and as of October 20 my
property is still shown as owned by my seller), or your street address.<span style="mso-spacerun: yes;"> </span>The property appraiser will provide detailed
information about size, exemptions, structures and sales of the property
searched, and you can easily print a property summary for your records.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>The second
scam was letters purporting to be from or on behalf of my mortgage lender
suggesting that it is necessary to purchase special mortgage insurance to
protect my family if I died.<span style="mso-spacerun: yes;"> </span>While the
concept is not truly a scam, the sheer quantity of letters (two dozen to date)
and the presentation as being “sanctioned” by my lender, makes the requests
very suspicious.<span style="mso-spacerun: yes;"> </span>These companies simply
monitor the public records for new mortgages being recorded and then pounce and
are not sanctioned by your lender (though your own lender may also try and sell
you the same product).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Also known as
credit life insurance, it is really a protection for the lender, not the
borrower.<span style="mso-spacerun: yes;"> </span>Mortgage life insurance costs
more than regular life insurance for the same type or amount of coverage, the
lender is the beneficiary of the policy, not your family, and mortgage life
insurance is not required for taking out a loan (though some lenders try to
imply that it is as the commissions are very high).<span style="mso-tab-count: 1;"> </span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>The policy
works by paying off your mortgage loan should the borrower die.<span style="mso-spacerun: yes;"> </span>The costs is often rolled into the monthly
mortgage payment or paid monthly to a separate insurance company.<span style="mso-spacerun: yes;"> </span>State Farm, for example, sells this product
at a cost of $258 a year for $100,000 of coverage on a 30 year mortgage.<span style="mso-spacerun: yes;"> </span>They age limit this coverage to those under
45 at the time of the policy issuance.<span style="mso-spacerun: yes;">
</span>This is a bad deal compared to regular term life insurance.<span style="mso-spacerun: yes;"> </span>For example, Geico quotes a healthy 40
year-old male can buy a $500,000 term life policy with a 20 year rate guarantee
for just $345 per year.<span style="mso-spacerun: yes;"> </span>That much
coverage under the State Farm plan would be four times greater.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>The lesson is
to be wary of any unsolicited letters selling services that appear to be from
an official source, whether from the local government or your home lender.<span style="mso-spacerun: yes;"> </span>In most cases these are scams or over priced
products.<span style="mso-spacerun: yes;"> </span>A simple online search can
easily confirm the validity and value of such products.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<i style="mso-bidi-font-style: normal;">Michael J Posner,
Esq., is a partner in Ward Damon a mid-sized real estate and business oriented
law firm serving all of South Florida, with offices in Palm Beach County.<span style="mso-spacerun: yes;"> </span>He specializes in real estate law.<span style="mso-spacerun: yes;"> </span>They can be reached at 561.594.1452, or at
mjposner@warddamon.com</i><o:p></o:p></div>
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<br /></div>
<br />Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com1tag:blogger.com,1999:blog-5703675747421822056.post-87173792764747914282018-10-08T21:17:00.003-04:002018-10-08T21:17:41.078-04:00Contractor Fraud on the Rise: What You Need to Know<div class="MsoNormal">
Contractors in the construction market make up a large
portion of the overall employment statistics for the industry. There are more
than six million employees who work in construction industry each year across
an estimated 650,000 employers, many of which represent themselves as
independent contractors. Without construction contractors, many residential and
commercial projects would remain unfinished. However, not all contractors in
the construction industry are created equal.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In a recent case brought in Washington, D.C., an individual
home improvement contractor was found guilty of defrauding customers and
avoiding personal and business creditors through misleading statements in
bankruptcy court. The case found that the contractor neither had the skills nor
the intention to complete the projects he was paid to do, leaving homeowners with
significant financial loss. More and more of these cases are brought to light,
even for contractors with the right licensing and bonding requirements in
place. As contractor fraud continues to rise, it is important for homeowners to
recognize the common types of fraud and warning signs.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Common Types of Fraud</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Construction contractor fraud comes in many forms which
makes it difficult to spot from the start. However, the most common types of
fraud include the following:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Fraudulent billing schemes – some contractors make up
payments to suppliers and vendors on paper and pocket the funds, while others
charge an excessive amount for materials or equipment.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Theft – contractor theft can be costly and it is fairly
common in the industry. Contractors can take materials and supplies paid for by
the customer that are difficult to track down or to recoup after the fact.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Equipment use – tools, construction equipment, and vehicles
may all be abused or used for personal gain instead of the job at hand, leading
to higher costs over time.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Any combination of these common fraud types may be a
challenge to see as a project progresses. This makes it difficult for
homeowners and small businesses to know that they are being taken advantage of
until after the work is completed. The worst types of fraud involve a
contractor promising to complete a job but instead, taking the deposit/payment and
never looking back. Individuals in need of a construction contractor can look
to the possible warning signs below to help protect against fraud.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Warning Signs</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Construction contractors who ask for a large upfront
payment, in full, should signal a red flag for homeowners and business owners.
In many cases, receiving full payment for a new project gives little to no
incentive for bad actors to come back and complete the job, and if they do, it
may not be up to building standards. In addition to receiving large upfront
payments, contractors without the appropriate licensing through the state or county,
or the right type of surety bond in place should not be hired for a project.
Surety bonds are required for nearly many large construction contracts, and the
price paid for having this peace of mind in place is minimal for most.
Contractors who are unwilling to provide these details should not be trusted.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Additionally, contractors who do not present the customer
with a written contract to sign before starting a new project may require more
review. A contract helps protect both the customer and the contractor, and
without one, there is no proof that a job was agreed upon or what the project
actually entails. Finally, contractors who fail to provide references from
satisfied customers or those who have little to no online presence or business
location may not be trustworthy.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Protecting Your Investment</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Homeowners and business owners can take certain steps to
protect their investment in a construction contractor, starting with
understanding common fraud types and the warning signs mentioned above. A
contractor should be willing and able to provide documentation of licensing,
bonding, and insurance, as well as references from past customers or online
reviews. If these items are not readily available, check with the state or county’s
licensing board to see if a contractor is listed. If he or she is nowhere to be
found, or represents they have a license when they do not, may mean there is no
intention of completing the work requested.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Take care to select a contractor that checks the right boxes
before making any payment, and keep an
eye on the progression of work as agreed upon in the contract. These small
actions can make a significant difference in getting a construction job done
correctly and in-budget.<o:p></o:p></div>
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<div class="MsoNormal">
Author: <i style="font-family: "Arrus BT", serif; font-size: 12pt;">Eric Weisbrot is the Chief
Marketing Officer of JW Surety Bonds. With years of experience in the surety
industry under several different roles within the company, he is also a
contributing author to the surety bond blog. </i><span style="font-family: "Arrus BT", serif; font-size: 12pt;"> </span></div>
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<span style="font-family: "Arrus BT", serif; font-size: 12pt;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://2.bp.blogspot.com/-fE7_Z_kJAAI/W7wBo9TVHlI/AAAAAAAB2kA/351PlcJR2Nk1h3xlzDZNjv77AaqYHtt5gCLcBGAs/s1600/Eric-Weisbrot---Marketing-Manager.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="265" data-original-width="285" src="https://2.bp.blogspot.com/-fE7_Z_kJAAI/W7wBo9TVHlI/AAAAAAAB2kA/351PlcJR2Nk1h3xlzDZNjv77AaqYHtt5gCLcBGAs/s1600/Eric-Weisbrot---Marketing-Manager.jpg" /></a></div>
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<span style="font-family: "Arrus BT", serif; font-size: 12pt;"><br /></span></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com2tag:blogger.com,1999:blog-5703675747421822056.post-4365001363499953682018-04-25T09:23:00.002-04:002018-04-25T09:23:41.392-04:00Palm Beach Post one-sided attack on title insurance continues In an article nominally addressing the possible merger of two large title companies (https://tinyurl.com/yd5p3ew7 April 14, 2018) the post took the opportunity to again lambaste the cost of title insurance. here is my letter to the editor which the Post has so far refused to run:<br />
<br />
<br />
<div class="MsoNormal">
Dear Editor:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>I read with
dismay Craig Elmore’s piece in April 14, 2018 Post about the merger between Fidelity
National Financial and Stewart Title.<span style="mso-spacerun: yes;">
</span>Instead of addressing the issues that the merger may cause, the main
thrust of the article is to lambast the cost of title insurance in a one-sided
rant replete with mistakes and misstatements.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>First Elmore
claims it is, “It’s a kind of insurance designed to defend and compensate
buyers and lenders in case of challenges to the title ownership, involving
records that show who has rightful legal claim to the property.”<span style="mso-spacerun: yes;"> </span>That is only one thing title insurance
insures for under the policy.<span style="mso-spacerun: yes;"> </span>It also
provides coverage for unpaid liens, assessments, missed mortgages and mistakes
(deeds with missing witnesses, errors in abstracting, etc.).<span style="mso-spacerun: yes;"> </span>Also, title insurance does not simply wait
for challenges but will affirmatively take action to fix issues when discovered
by either filing suit or paying compensation. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Elmore also
states that shopping around is fruitless because no simple task to locate
dramatic price differences, as title insurers wearing a whole raft of different
brand names operate in a handful of corporate “families,” implying that
underwriter’s set prices for title premiums.<span style="mso-spacerun: yes;">
</span>This is simply false in Florida.<span style="mso-spacerun: yes;">
</span>Prices are set by the Florida Department of Insurance, and these fixed
premiums have fallen over 30% against inflation in the last 25 years.<span style="mso-spacerun: yes;"> </span>Local title agents will compete on price and
may Realtor shop closings to save their customers hundreds of dollars.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Premiums are
rising because the economy is doing better plus prices have recovered from
there dramatic drops, not because the costs of coverage has increased.<span style="mso-spacerun: yes;"> </span>In fact premiums have not increased at all
since 2011 (or in fact since 1994 in Florida).<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Comparing
loss ratios for title insurance to casualty insurance is also without
merit.<span style="mso-spacerun: yes;"> </span>Buy a home and pay a one-time
title premium for lifetime coverage, or pay more than that per year to cover
casualty insurance.<span style="mso-spacerun: yes;"> </span>They are simply not
equivalent coverages.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>The claim of
the CFA about “huge kickbacks, expensive gifts, and other inducements from the
insurers to real estate professionals” is simply not true for the most part.<span style="mso-spacerun: yes;"> </span>These activities are illegal in residential
real estate with federally insured loans, and has had no effect or premiums to
“raise the price of title insurance to “absurdly high levels.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Elmore’s last
fallback is to tout Iowa’s low costs for coverage.<span style="mso-spacerun: yes;"> </span>What he fails to state is that Iowa has a
government run not-for-profit company that issues policies.<span style="mso-spacerun: yes;"> </span>I am sure if Florida took over FP&L and
ran it as a not for profit, our electric bills would be cheaper too.<span style="mso-spacerun: yes;"> </span>What Elmore fails to mention is that if
losses exceed revenue, the taxpayers of Iowa must cover the difference.<span style="mso-spacerun: yes;"> </span>He also fails to mention that to get that
cheap $110 policy, one must hire an abstracter to abstract title and an
attorney to issue a title opinion.<span style="mso-spacerun: yes;">
</span>Abstracts in Iowa costs about $350 and up, (versus $75-125 in Florida)
and title opinions prices vary by attorney.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>This is the
second time the Post has run a one-sided article about title insurance.<span style="mso-spacerun: yes;"> </span>This type of coverage belongs in the editorial
section, not as unbiased business news reporting.</div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com9tag:blogger.com,1999:blog-5703675747421822056.post-29540673278634802072018-01-11T08:21:00.004-05:002018-01-11T08:21:50.548-05:00Home Title Lock/Property Fraud<div class="MsoNormal">
If you listen to the radio you probably have heard an
ominous radio advertisement about thieves taking title to your home,
refinancing the mortgage and leaving you to suffer when the mortgage is not
paid, resulting in you being served as the unknown tenant in the bank’s
foreclosure. The advertisement then
offers to protect you by monitoring your property title for only $9.99 per
month. Their tag line is “Title
Insurance Doesn't Protect You and Neither Does Your Bank or Identity Theft
Protection. HOME TITLE LOCK DOES!” <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
According to
the FBI, property and mortgage fraud is the fastest growing white-collar crime
in the United States. The threat described above is real and I have been
involved in property fraud cases in the past.
These usually involved sophisticated parties with knowledge of deeds,
recordings and the like, and the willingness to steal notary seals and alter
corporate records. The game has now
changed due to online records and images, high quality printers and
e-recording. My most recent property
theft case was against a lender who had foreclosed a property in 2014 that sat
vacant for two years. Thieves simply
created a deed template, used Photoshop to insert a real signatures and notary
stamp from prior recorded deeds in New Jersey on the Florida forgery, added a
few fake unintelligible witnesses and then slipped a clerk at a title company a
few dollars to e-record the deed. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The thieves
used a fake title company name as the deed preparer, and a fake trust name as
the new owner, without naming an actual Trustee (which is required to have a
valid grantee/buyer in Florida as Trusts alone cannot hold title under Florida
law). Since the property had been
foreclosed, it was free and clear of liens and mortgages, and the deed forger
could have easily obtained a loan secured by the property. Alternatively, and the more common criminal
act, is the deed forger uses the deed to take physical control of the property,
acting as landlord to rent the home while its true owner thinks it is vacant,
waiting for a future sale.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The forgery
was discovered by the new owner who purchased the house days after the forged
deed was recorded. She was denied
homestead, made a claim on her title policy and we successfully filed suit to
quiet title. The cost was paid by the
title company because the forged deed was recorded <b><u>before</u></b> her insured deed.
However, if this happens to you after your deed is recorded, your title
insurance owner’s policy will not insure the title claim, forcing you to have
to cover the cost of any lawsuit to correct the defect.<o:p></o:p></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
Home Title
Lock is a for profit company that claims to protect your title for only $9.99
per month. Essentially they monitor the
title to you property by searching public records for any changes, such as any
newly filed deeds, mortgages or liens.
They claim that they use “proprietary technology (that) forms a virtual
perimeter around your home and property title.”
If an instrument is recorded, they claim they “ALERT you immediately
with key information such as names involved with the transaction, the amount of
loan, date of such loan, (and <i>sic</i>) document
name.” They also claim that if a
detected activity is not authorized to “mobilize all our resources to help you
shut it down - FAST!” However, the
website provides no documentation on this last element, which would normally
require local legal assistance and a high legal cost. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Alternatively
you have two other free options that you can use to protect the title to your
property. The easiest approach is to
simply act as your own monitor of title by searching the public records to see
if any changes have occurred. All
counties in Florida maintain a name index which is accessible online (Using <a href="http://www.tinyurl/">www.tinyurl</a> as a prefix: Palm Beach: <i>qejqo</i>; Broward: <i>ycmj9fce</i>; and Miami-Dade: <i>ybzr6xds</i>). Simply search your name to determine if
anyone has tried to file a deed or lien using your name as a forgery. A ninety day search of my own name showed a
deed, notice and mortgage (but not any of my own property), so no issues.<o:p></o:p></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
An
alternative offered by some County Clerks of Court is a Property Fraud Alert
registry. Palm Beach County (tinyurl.com/ya9m766b)
allows owners to register to receive free alerts when a document such as a deed
or mortgage is recorded with the clerk using your name or business name. Sign-up is a one page application that simply
requests your name and whether you wish to be contacted by phone or email. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Being
vigilant regarding your most valuable possession is the only way to protect
yourself from this growing problem.
Monitor your title, register for fraud alerts, petition your local
county to offer this service if not yet available, and take quick action if
anything is recorded. <i>To be forewarned is to be forearmed</i>, and
in this battle, that is the real key.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<i><span style="font-family: "Arrus BT","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Michael J Posner, Esq., is a partner in Ward
Damon a mid-sized real estate and business oriented law firm serving all of
South Florida, with offices in Palm Beach County. They specialize in real estate and can assist
owners in addressing title fraud issues.
They can be reached at 561.594.1452, or at mjposner@warddamon.com</span></i>Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com49tag:blogger.com,1999:blog-5703675747421822056.post-61936207124895268772017-10-22T08:36:00.003-04:002017-10-22T08:36:43.713-04:00Termination of Condominiums (Bulk Owner)<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
Many condominiums in Florida have been
subject to bulk buy-outs, either due to poor sales from the great recession or,
in the case of older buildings, due to an aging ownership, high special
assessments or major future repairs (roof or concrete restoration).<b> </b>This issue has led the Florida
legislature to recognize that, in certain circumstances, continued operation of
a condominium “may create economic waste and areas of disrepair which threaten
the safety and welfare of the public or cause obsolescence of the property for
its intended use and thereby lower property tax values.” <o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
To address this issue, the Florida
legislature amended Florida Statute Section 718.117 to create a termination
procedure outside the Declaration of Condominium process which generally requires
unanimous approval of all owners in order to terminate the condominium under
existing condominium documents.
Specifically, the termination under this new section is “not an
amendment subject to Florida Statute Section 718.110(4)” which sets forth that
“no amendment may change the configuration or size of any unit in any material
fashion, materially alter or modify the appurtenances to the unit, or change
the proportion or percentage by which the unit owner shares the common expenses
of the condominium and owns the common surplus of the condominium unless the
record owner of the unit and all record owners of liens on the unit join in the
execution of the amendment and unless all the record owners of all other units
in the same condominium approve the amendment.”<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
The procedure often raised by bulk owners is
known as an Optional Termination.
Specifically, this type of termination may be initiated pursuant to a
Plan of Termination of the Condominium as follows:<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
1. Must
be approved by at least eight (80%) percent of Unit Owners.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
2. If
proposed by a Bulk Owner (an owner who directly or through affiliates controls
80% or more of the voting units), then, in addition, the following requirements:<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
a. Payment to owners of “at least 100
percent of the fair market value of their units.”<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
b. “Provide for payment of a first
mortgage encumbering a unit to the extent necessary to satisfy the lien, but
the payment may not exceed the unit’s share of the proceeds of termination
under the plan.”<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
c. Include special notice within any
proposed Plan that states: <o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
i.
“The identity of any person or entity that owns or controls 25 percent or more
of the units in the condominium and, if the units are owned by an artificial
entity or entities, a disclosure of the natural person or persons who, directly
or indirectly, manage or control the entity or entities and the natural person
or persons who, directly or indirectly, own or control 10 percent or more of
the artificial entity or entities that constitute the bulk owner.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
ii. The
units acquired by any bulk owner, the date each unit was acquired, and the
total amount of compensation paid to each prior unit owner by the bulk owner,
regardless of whether attributed to the purchase price of the unit.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
iii. The
relationship of any board member to the bulk owner or any person or entity
affiliated with the bulk owner subject to disclosure pursuant to this
subparagraph.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: .5in;">
iv. The
factual circumstances that show that the plan complies with the requirements of
this section and that the plan supports the expressed public policies of this
section.<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: .5in;">
Once the Plan of Termination is presented to
the owners, it must be approved by Bureau of Condominium within forty-five days
of presentation. If no owners object
(see below) and the division approves the Plan (or if no approval, no rejection
with forty-five days) then the termination may proceed as outlined within the
Plan.<o:p></o:p></div>
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Once the Plan is presented to owners, should
five (5%) percent or more of the total voting interests of the condominium reject
the plan of termination by negative vote or by written objection, the plan of
termination <u>may not proceed</u>. In
addition, if rejected by the required voting percentage, “a subsequent plan of
termination pursuant to this subsection may not be considered for 24 months
after the date of the rejection.”<o:p></o:p></div>
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By way of example, if a condominium consists
of one hundred units, then it would require the holder of not less than eighty
units to vote to proceed with a plan of termination, and five or more-unit
owners reject such plan, then termination will not be permitted. All such rejections should be made in writing
and if the plan has been submitted to the Bureau of Condominium, that the
written objection be filed therewith.<o:p></o:p></div>
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With the continuing strength in the rental
market and the ongoing failures at many condominiums, termination and
conversion thereafter into apartments will continue to be a viable process for
distressed condominiums and their owners.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify; text-indent: .5in;">
<i>Michael
Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business
oriented law firm serving all of South Florida, with offices in Palm Beach
County. They specialize in real estate
and can assist associations in all legal matters including bulk termination.
They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>
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</div>
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<i><span style="font-size: 9.0pt; mso-bidi-font-weight: bold;"><o:p></o:p></span></i></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com6tag:blogger.com,1999:blog-5703675747421822056.post-46477548396898597412017-09-30T14:04:00.003-04:002017-09-30T14:04:15.341-04:00What Lawyers Do, a Specialization Guide<div class="MsoNormal" style="text-align: left;">
Two things
struck me this week regarding my profession. First, my son is trying to decide
what type of lawyer he wants to be when he graduates from law school next
spring. Second, while binge watching <i>Better
Call Saul</i>, I was struck by Saul’s attempt to label himself an Elder Law
Attorney simply by drafting a few wills.
Putting aside that a lawyer who drafts wills is considered a Trust and Estates
attorney, not an Elder Law attorney, I began to think about all the areas of
practice in which we, as lawyers, specialize which, in many ways, are unknown
to the public who think lawyers, know or should know, all areas of the law.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There are two
main branches of practice, commonly divided between trial attorneys and
transactional attorneys. Historically, and in actual practice in some
countries, the trial attorneys were known as barristers. These attorneys
present all cases in court at the direction of solicitors who handle the actual
day-to-day practice of law and who handle all client relations. In many cases,
the barrister receives the trial materials merely a day or two before the trial,
presenting the case prepared by the solicitor. Barristers were forbidden to meet
with clients or to even form partnerships with other barristers. However, many
barristers banded together in groups called chambers in which they could share
resources, office space and clerks.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
In the United
Kingdom for example, barristers are still the most common trial attorneys
though the fusion of practice between barristers and certain solicitors is
continuing to expand in the United Kingdom. Barristers still wear horsehair wigs,
stiff collars, bands, and a gown when appearing in court in the United Kingdom. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
In the United
States, the separation of barristers and solicitors has been eliminated and
anyone who is licensed as an attorney may appear in any state court in which
they are licensed. However, appearances in federal court still require an
application, and in some cases also require the taking of a test. In many
jurisdictions, including federal, admission to the appellate bar also requires
an application and in some cases an examination. Admissions to the Federal
Bankruptcy Bar requires both admission to the federal District Court for the
applicable bankruptcy court, and passage of an examination and a minimum of
continuing legal education credits. Admission to the United States Patent and Trademark
bar requires passage of a very difficult exam and a scientific or engineering
undergraduate degree. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Most lawyers
today have a jurist doctorate degree issued by one of the United States’ one-hundred
fifty plus accredited law schools. Many law schools also now offer certificates
to their students, which allows a student to “major” in a specific area of law
while in law school. These programs require the students to take a specific
coursework in their “major,” and also to take one or two additional classes
beyond the normal number required to graduate. Some programs also require
maintaining a minimum GPA in the specialized area. Upon graduation, the student
receives a separate certificate indicating the completion of the specialized
coursework program.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
In addition, there
is also post-law school graduate work for further specialization. The most
common is the Masters in Law in Tax, commonly known as the LLM degree. Many tax
attorneys practicing today hold this graduate degree. Other LLM’s are available today including
LLMs in international, real estate, health or environmental law.<o:p></o:p></div>
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<br /></div>
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On
television, lawyers appear to handle a variety of legal matters including
criminal and civil, transactional and litigation. While there still are some
lawyers who handle a wide variety of cases, most lawyers specialize in a
limited area of law. In litigation, there are lawyers who specialize in
criminal cases, family law cases, commercial litigation, or civil litigation.
Transactional lawyers also specialize, including areas such as real estate, corporate,
intellectual property, licensing, sports law and other areas.<o:p></o:p></div>
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<br /></div>
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In Florida,
lawyers who specialize in a specific area may, after practicing five years,
stand for one of the many certification exams offered by the Florida Bar. These
exams, when passed, allow a lawyer to state that they are Board Certified in
that specific area. There are currently
twenty-six areas of law for which lawyers may become Board Certified. This list
continues to grow and includes both litigation and transactional areas of law. <o:p></o:p></div>
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<br /></div>
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Armed with
this knowledge, it makes it easier for you to properly select a lawyer to
represent you in whatever matter your legal needs require. Choosing the correct
lawyer is the first step to resolving your legal needs, and selecting someone
who is not qualified to handle your case can lead to poor representation and an
unhappy outcome.<o:p></o:p></div>
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<br /></div>
<br />
<div class="MsoNormal">
<i>Michael
J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business
oriented law firm with offices in Palm Beach County and a Board Certified Real
Estate Attorney who handles a variety of real estate matters throughout South
Florida. He can be reached at
561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com11tag:blogger.com,1999:blog-5703675747421822056.post-21589033286496387902017-03-11T13:03:00.002-05:002017-03-11T13:03:15.489-05:00President Trump and Real Estate<div class="MsoNormal">
Many people believe that Trump will be good for business and
real estate, due to his career which was heavily involved in commercial and real
estate. This is yet to be seen, but
right out of the gate Trump had an effect on the real estate market by his
issuance of his first Executive Order on inauguration day.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The issue in
question was the action by President Obama, in the waning days of his
administration, to reduce the premium for mortgage insurance on mortgages
guaranteed by the Federal Housing Administration (FHA). These loans are usually financed with only
three to five percent down, and as such, require mortgage insurance to cover
the possibility of a deficiency upon default due to the limited amount of
equity in the property.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The mortgage
insurance premium is a monthly fee tied to the loan size, loan term and
includes an upfront premium of 1.75% of the loan amount and between 45 and 105
basis points (0.45% to 1.05%) annually on the loan balance, paid in monthly
installments with the principal and interest payments.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Earlier in
January, 2017, President Obama directed a 25-basis point (0.25%) cut in the
premium which was estimated to save consumers, on average, at least $25.00 per
month. This decision was based, in part,
on the belief that the funds that insure these mortgages have sufficient
reserves to allow for a premium reduction. However, only four years ago,
taxpayers funded a 1.7-billion-dollar bailout of the FHA to fund shortfalls in
the insurance fund due to a large number of loan defaults.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
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In response
to the action by the outgoing President, Trump issued an Executive Order
cancelling the reduction. This action
was taken, in part, as a reaction to the Obama administration adopting new
policies as it prepared to leave office, but was also taken due to the concern
that a premium reduction puts taxpayers at risk due to decrease in the
insurance funds available to the FHA to cover defaults.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Another issue
on President Trumps agenda is reducing or eliminating the mortgage interest
deduction. Currently married homeowners who itemize their taxes can deduct
interest on mortgages of up to one million dollars ($500,000 for single
persons). The deduction is supported by
Realtors, home builders and bankers who use it as a selling point to potential
home buyers.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, the
number of home owners who itemize is not as popular as some believe. At least a third of homeowners have no
mortgage, and many lower and middle income homeowners do not itemize their
taxes, losing any potential deduction from the interest that they pay on their
mortgage. The Tax Policy Center states
that the mortgage interest deduction mostly benefits wealthier Americans. “Instead of turning renters into homeowners,
homeownership tax expenditures encourage middle- and upper-income individuals
to purchase more expensive homes, take on more debt, or buy second homes.”<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Trump’s plan
is to cap total available deductions at $100,000. This cap will only affect the wealthiest,
since even on a $500,000-dollar loan at five percent, the total interest
deduction in year one of the loan would be $25,000. However, when you consider other deductions
that come into play such as property taxes, charity, medical expenses and the
like, the cap will affect some homeowners, especially wealthier homeowners who
now have deductions that far exceed $100,000.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The National
Association of Realtors will strongly oppose any measure to reduce the mortgage
interest rate deduction, as they believe that this will impact home
ownership. With ownership levels
continuing to fall, the President of NAR has said that NAR is “adamant about
protecting tax deductions for residential mortgage interest and property
taxes—for primary and secondary homes.”<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<i>Michael J Posner, Esq., is a partner in Ward
Damon a mid-sized real estate and business oriented law firm serving all of
South Florida, with offices in Palm Beach County. They can be reached at 561.594.1452, or at mjposner@warddamon.com</i><o:p></o:p></div>
Michael J Posner, Esquirehttp://www.blogger.com/profile/15704354431414096845noreply@blogger.com9