Florida ARECs Blog

By Rene’ Rutan, REC Relations Manager, The Fund & Florida ARECS

"Homeownership promotes stability and healthy outcomes, builds intergenerational wealth, and ultimately is fundamental to America's promise of opportunity,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon in HUD’s press release celebrating this year’s National Homeownership Month.

By Melissa Jay Murphy, Executive Vice President and General Counsel, The Fund

Over the last few months, the Florida real estate industry has experienced an ever-increasing volume of sales and mortgages that have been found to be fraudulent.  Most commonly, the property is vacant with no mortgage and often the lot is owned by a seller whose address shows they live in a foreign country.  The fraudster either forges a deed from the true owner to the fraudster, or just holds himself out as the true owner and then lists the property for sale (often on Zillow), for a very attractive price.  A buyer bites, the closing date is set, and if someone does not figure it out, the fraudster gets away with many thousands of dollars and no one knows until it is too late to recover the money.

By: Brenda Ezell, Esq., Jacksonville, Member of The Fund

By now we have all heard the term “heirs’ property,” particularly since Florida’s enactment of the Uniform Partition of Heirs Property Act (the “Act”) which became effective on July 1, 2020. This article is not a discussion of the Act, as a very thorough analysis was authored by Jalinda Davis, Senior Fund Underwriting Counsel at Attorneys’ Title Fund Services, LLC, and can be located in the November 2021 edition of The Fund Concept. Rather, this article is meant to serve as an analysis of the issues compelling passage of the Act and my own practical introduction to these issues.

By: Michael Rothman, Senior Manager, Legal Education, Attorneys’ Title Fund Services, LLC

Read on to learn what real estate agents need to consider. 

By: Romy B. Jurado, Esq., Partner at Jurado & Farshchian, PL., and a Member of The Fund

The Sunshine State has long been home to a large number of immigrants. Immigrants altogether make up more than a quarter of Florida’s labor force, and one in five residents in the state was born abroad. Additionally, one in eight residents is a native-born U.S. citizen with at least one immigrant parent. It is no surprise that Florida is one of the favorite destinations for foreigners who want to invest in real estate. As a Realtor® in Florida, it is crucial to understand foreign investment in Florida real estate and how to do it properly.

By: Michael Rothman, Esq.

I heard from my favorite uncle last week. He’s found a property in Deerfield Beach, Florida, just up the road from where I am, and is ready to submit an offer to purchase. For the past 30 years, he and my aunt have lived the rent-stabilized lifestyles of Upper East Side New Yorkers and are finally ready to retire to Florida.  My uncle went on and on about having his own study and a “real” backyard to grill for friends, which I found strange because my uncle doesn’t know a soul in Deerfield Beach and tends to study nothing more than baseball box scores. I didn’t have the heart to tell him that the south Florida barbeque season lasts about six weekends, what with the afternoon thunderstorms, oppressive humidity and the terror-inducing mosquitos. He’d learn soon enough.

By: Tony Lavargna, Esq., Lavargna Law, PLLC, Stuart, and a Member of The Fund

Probate can be a deadly word for real estate closings, but it doesn’t have to be. There are some initial aspects of Probate that we can help navigate for our clients to make sure that a real estate deal stays on course.

By: Jared Gaylord, Esq., of Marc. R. Gaylord, P.A., Hobe Sound, FL and a Member of The Fund

Unfortunately, COVID-19 is here to stay. The global pandemic has touched every aspect of American life. Real estate closings have not been spared. It is imperative to understand how the coronavirus can impact a real estate transaction to adequately protect yourself and your clients.

By: Jordan Lulich, Esquire at Lulich Attorneys & Consultants and Member of The Fund

Don’t judge a book by its cover. While for many, digital real estate closings seem like a daunting service to offer, I’m here to tell you that it’s quite simpler than you think. 

By Charles D. Nostra, The Fund

As we discussed a few months ago Property Assessed Clean Energy (PACE) loans, which are used to make certain qualifying energy efficiency and hurricane hardening improvements to commercial and residential properties, are increasing in popularity but unfortunately many buyers and sellers do not understand how they work and how they can complicate the real estate closing process.  Here is what you, as a real estate professional, need to know about this increasingly popular financial product.

By Michael Rothman, Esq., The Fund’s Legal Education Manager

Every real estate professional involved in a transaction with an out-of-town seller can relate to the dread of opening a FedEx envelope supposedly containing the fully executed deed, only to find that the seller signed in the wrong place, there are no witnesses, and the notary’s commission expired last month. Or, of the seller traveling abroad who missed her appointment at the local embassy, only to be told that the next available appointment won’t be for three weeks. Thankfully, with the advent of RON, the stressful days of “mailaway closings” may soon be a thing of the past.

By: Sebastian Jaramillo, Partner at Wolfe Pincavage LLP and Member of The Fund

Even though we are in the business of getting transactions closed and funded; on occasion, the deal falls through and we are left with the question of how to deal with the funds held in escrow. 

By: Michael G. Salmon, Managing Attorney at SalmonLaw PLLC and Member of The Fund

Liquidated damages ensure that earnest money deposits are central elements of real estate transactions utilizing the FAR/Bar residential sales contracts – the standard or “as is” contract (the “FAR/Bar Contracts”). As such, it should not be surprising that buyers and sellers have opposing motivations with respect to deposits. It is reasonable to expect real estate professionals representing buyers to get creative in protecting and/or recovering their clients’ deposits when real estate transactions go sideways. The route increasingly travailed by buyers, mortgage lenders and Realtors® is Paragraph 5(a) of the FAR/Bar Contracts relating to the Consumer Financial Protection Bureau Closing Disclosure delivery requirements (the “CFPB Delivery Requirements”), which come under the Know Before You Owe mortgage disclosure rule (i.e., TRID).

By: Shannon L. Widman, Esq. of Porath & Associates, P.A.

No one wants to see a good deal go bad. As a Realtor® your business plan survives on closed deals, not cancelled deals. Nonetheless, the more deals you do, the more likely you will, at some point, encounter the dreaded escrow dispute.

By John St. Lawrence, Esq, Legal Education Attorney, The Fund

The Consumer Financial Protection Bureau's (CFPB) Loan Originator Compensation Rule went into full effect in 2014 bringing a subset of small mortgage lenders under a previously unknown level of federal regulation.  As a result some types of private mortgage financing are now too risky or cumbersome for many to contemplate.  This is unfortunate since seller and private financing are very popular and legitimate financing sources for intra-family loans, underserved communities and rural or non-conforming properties.

By: Marshall C. Deason, Jr., Board Certified Real Estate Lawyer, Older Lundy & Alvarez, Tampa, FL

In 1998, the Florida Supreme Court decided the case of Johnson v. Davis, which created a new duty for sellers of residential real estate.  In this case, the Court ruled that sellers must disclose any material defects in the property which are known to the seller and which are not open and obvious.  In the line of cases which followed over the next several years, courts ruled that the duty to disclose applies to real estate brokers and agents and that making a sale “AS IS” does not eliminate or limit the duty to disclose.  In addition, a buyer cannot waive the right to receive disclosure.

By: René Rutan, Real Estate Council Relations Manager, Florida ARECs

In 2010, Florida was the last state in the U.S. to approve the American Land Title Association (ALTA) 2006 Title Insurance Forms, which accomplished numerous objectives, one of which was to simplify the legal nature of the language.  Despite these efforts to simplify, title insurance still has its own language so let us help you understand what the title commitment is really saying.

By: Nomiki Zervos, Associate Attorney, Davis Basta Law Firm, P.A.

Transferring property can be both exciting and complicated. It’s not as simple as tendering the purchase price to the seller or changing the name on a deed. Before reaching the end result, purchasers typically find themselves amongst a midst of several charges and cash flows.  Amongst these is the documentary stamp tax.

By: René Rutan, REC Relations Manager, Florida ARECS

If you have been shopping for a new home recently, as I have, or working with a buyer who is, you have undoubtedly encountered the Community Development District or CDD.  Many large, multi-phase communities with lifestyle amenities are now relying on this method of funding development so it is essential that homebuyers and the real estate agents serving them have a full understanding of what CDDs are and how they work. 

By: Michael Rothman, Esq., Fund Legal Education Manager 

​Introduction 

Business Email Compromise (BEC) fraud and other social engineering frauds remain a real concern for all those engaged in the real estate profession. A single uninsured and misappropriated wire transfer in the hundreds or even tens of thousands of dollars can cripple one’s business.  Per the latest FBI statistics, the real estate sector is now the most targeted area for BEC fraud. In 2017, nearly $1 billion ($969 million, to be precise) was diverted or attempted to be diverted from real estate purchase transactions and wired to criminally controlled accounts. With losses come lawsuits, and real estate licensees and title insurance agencies oftentimes are the targets. Real estate professionals therefore need ask themselves whether they have -- or need -- coverage in place to insure against a security breach, lawsuit and potentially catastrophic loss.

By: Michelle Gomez Hinden, Esq., B.C.S. and assisted by Flor Leiva, Law Clerk

FR/BAR CONTRACTS: Reconsidering the differences between the “AS IS” Contract and the Standard Contract in the wake of Diaz v. Kosch

Florida Real Estate Attorneys and Real Estate Licensees have found guidance in a 2018 landmark case, Diaz v. Kosch, coming out of Florida’s Third District Court of Appeal. After six years of litigation arising from a $2,850,000.00 residential real estate contract, the Third District Court delivered its noteworthy opinion interpreting the “AS IS” Residential Contract for Sale and Purchase that was drafted, jointly, by the Florida Realtors and the Florida Bar.

By: Charles D. Nostra, Esq.

Property Assessed Clean Energy (PACE) programs provide an alternative way for Florida property owners to finance certain energy efficiency and wind resistance (i.e. hurricane hardening) improvements. This no money down, 100% financing program is being heavily marketed in Florida ( especially South Florida) by telemarketers, mailings, TV & radio commercials and direct door-to- door solicitation.

By D. Michael Chesser, Esq.

This article first started where the last one left off. That one told of a bank-owned repossession, a commercial lot, burdened by a billboard easement. The person buying was new to the English language, and didn’t know that the easement, which I called a “blanket easement” prevented use of the entire property.

By D. Michael Chesser, Esq.

Drafting an easement is a bit like you and me landing an airplane. There will be mistakes. The difference is that you will know very quickly how the plane lands. It may be years before you know how bad your easement was.

By: Gary L. Davis, real estate lawyer in New Port Richey, Florida

My clients purchased a mortgage foreclosure property from the courthouse. After their purchase, the homeowner’s association demanded they pay back assessments that totaled more than $20,000.00. Didn’t they get the property free and clear from the sale?

By: American Land Title Association, TitleNews Online Archive

Criminals begin the wire fraud process way before the attempted theft occurs. Most often, they begin with a common social engineering technique called phishing. This can take the form of email messages, website forms or phone calls to fraudulently obtain private information. Through seemingly innocuous communication, criminals trick users into inputting their information or clicking a link that allows hackers to steal login and password information.

By: American Land Title Association, TitleNews Online Archive

Title professionals are encouraged to remind clients about the risk of wire fraud. To combat this problem, title and settlement companies have:

By: Nishad Khan, Nishad Khan P.L., Orlando, Florida

Condominium and homeowners association estoppel certificates have been a popular topic in Tallahassee for the last couple of years and it appears that this year we will have revised requirements under SB 398. The Bill and its companion have been approved by the house and senate and are headed to the Governor’s desk.

By: Roy Oppenheim, Oppenheim Law, Weston Florida

Preparing for a marathon race can only be accomplished with the right advice and preparation to help you overcome obstacles and reach the finish line. Buying a home is analogous to the kind of preparation needed to reach the finish line. Having your real estate professional team prepare and coach you in order to avoid hurdles and make the process of closing on a residential home easier.

By: Michael J. Posner, Esq., is a partner in Ward, Damon, Posner, Peterson & Bleau

Realtors and Community Association Managers provide valuable real estate services to sellers and buyers of real estate, as well as managing homeowners and condominium associations respectively. However, in providing their respective services, they frequently have issues that have substantial legal ramifications in connection therewith and, in providing advice and opinions on same, run the risk of being accused of the unlicensed practice of law. Knowing what is permitted and what requires specific use of a licensed attorney is important for both Realtors and Community Association Managers.

De: Alexander G. Cubas, Esq., Alexander G. Cubas, P.A.

Discusión de Victoria Moreno vs. First International Title, 176 So.3d 301.

By: Ira B. Price, Esq., Ira B. Price, P.A. & Legal Title Services, Inc.

Discussion of Victoria Moreno vs. First International Title, 176 So.3d 301.

By: René Rutan, Real Estate Council Relations Manager, Florida ARECs

If you have been shopping for a new home recently, as I have, you have undoubtedly discovered the Community Development District, or CDD. Many large, multi-phase communities with lifestyle amenities are now relying on this method of funding development, so it is essential that homebuyers and the real estate agents serving them have a full understanding of what CDDs are and how they work.

FIRPTA CHANGES – How much are you really making on your U.S. real property investments?

By: Sarah Gulati, Esq.

Prior to the PATH Act of 2015 (“Protecting Americans from Tax Hikes 2015”, effective 12/18/2015), if the seller of real property is a foreign person, Federal law required buyers to withhold 10% of the gross sale price and provide it to the IRS. With the implementation of the PATH Act, this 10% tax requirement has been altered. Effective February 16, 2016, the 10% withholding tax will be increased to 15%. Meaning, if you are a foreign person selling U.S. real property, 15% of the gross sales price of that property will go to the IRS in the form of a tax.

By: René Rutan, Real Estate Council Relations Manager, Florida ARECs

Title insurance is a mystery to most consumers and it really shouldn’t be. Confusion can often occur because lenders require title insurance to be purchased in order to obtain a mortgage, but it is not offered through your normal insurance agent where you purchase your homeowner’s or automobile policy. Instead, title insurance is typically issued by the party who conducts your real estate closing and is often lost in the shuffle of other concerns about obtaining the loan, finishing property inspections, and getting ready for your move. Title insurance is one of the most important things you can purchase to protect one of your largest investments and deserves a little more attention!

By: Richard Zaretsky, Esq., Richard P/ Zaretsky P.A. Attorneys at Law

There are people out there that are looking for your email address but they are neither buyers nor sellers. Their goal is for YOU to help them steal money from YOUR client. They are thieves, crooks, scoundrels, terrorists, and intentioned with the worst of motives. Why do I know about this - I just saw it happen!!

By: Connie Clark, Fund Sr. Underwriting Counsel

The party who customarily pays the owner’s title insurance policy premium in a residential transaction in Florida varies by county. In at least one county, who pays the premium depends on where the property is located within the county. For Fund Members writing or reviewing contracts for property located in a county where the Fund Member is not familiar with the local custom, this variability may create uncertainty.

By: Michael J Posner

In a previous column I mentioned the story of the Amityville, New York house, the scene of a gruesome family murder that was sold, led to claimed paranormal activity, movies, books and more sequels, all detailing the house’s sordid past and its alleged possession. That house has been occupied and sold repeatedly despite its infamy, and without further incident.

By: Michael J Posner

With the Maltz Theater bringing back Glengarry Glen Ross, I thought this would be a good time to look at how various real estate issues are portrayed in cinema. From bad salesmen, bad spouses, and bad ghosts, real estate has been a good issue as a backdrop to explore the relationship between individuals, from greed, envy and fear.

By: Jeffrey A. Grebe, Esq

Inspections and repairs in residential real estate transactions can be a major source of disputes between buyers and sellers. Many of these disputes arise simply because the parties (and often their real estate agents) do not fully understand or follow the inspection and repair procedures under the standard residential real estate contract. This article will attempt to “de-mystify” the inspection and repair procedures and help all parties avoid costly pitfalls.

Owners Don’t Always Have a Right of Approval

Section 718.112(2) of the Florida Condominium Act provides as follows: “Except as otherwise provided in this Section, there shall be no material alteration or substantial addition to the common elements … except in the manner provided in the Declaration.”

BEFORE Preparing a Sales Contract

Florida’s homestead law is one of the most generous in the United States. Florida’s Constitution provides that homestead is (1) exempt from forced sale; (2) devise and alienation is restricted; and (3) homestead affords tax exemptions. Of primary importance to real estate agents are the restrictions on alienation of homestead property.