Hurricanes and Real Estate Contracts

3 10 2017

Florida residents enjoy weather that many northern neighbors envy: warm temperatures all year, combined with easy access to breezy oceans, lakes, rivers and springs.

However, the weather here occasionally turns sinister, most notably when hurricanes meander across the Atlantic to wreak havoc on our state.

When these hurricanes impact real estate transactions, many Realtors scramble to locate casualty and bad weather provisions. This short inventory provides an overview of key provisions in the Florida Realtors/Florida Bar “AS IS” Residential Contract for Sale and Purchase revised in April of 2017, along with one reference to the casualty provision contained in the Florida Residential Landlord and Tenant Act.

  1. Section 18(G) Force Majeure
    This is an automatic extension that comes into play when a dramatic event prevents a party’s performance or closing from happening. It takes an unusual and unplanned event to trigger this “Force Majeure” clause, as you can see from a few of the examples given, such as, hurricanes, acts of God and acts of terrorism. Once the clause is triggered, though, certain time periods (including the closing date, if applicable) will be extended for a reasonable time up to 7 days after the force majeure no longer prevents performance. Parties should pay attention to the time in relation to the closing date, though, since either party may terminate the contract by delivering a written notice if force majeure continues to prevent performance more than 30 days beyond the closing date.
  2. Section 18(L) Access to Property to Conduct Appraisals, Inspections, and Walk-Through
    After a hurricane passes over a property, a buyer often wants to take another look at the property, regardless of whether the buyer is still in the inspection period. This clause generally favors the buyer’s request, as it provides that “Seller shall, upon reasonable notice, provide utilities service and access to Property for appraisals and inspections, including a walk-through (or follow-up walk-through if necessary) prior to Closing.”
  3. Section 18(M) Risk of Loss
    If the buyer or seller discover casualty damage from the hurricane, this clause describes the rights and obligations of each party. If the cost to restore the property does not exceed 1.5% of the purchase price (this cost includes the cost of pruning or removing damaged trees), then the cost is a seller obligation. If the restoration isn’t complete prior to closing, the seller will escrow a sum equal to 125% of the estimated cost to complete the restoration. If the cost of restoration exceeds 1.5% of the purchase price, then buyer has the option to either take the property along with 1.5% of the purchase price, or receive a refund of the deposit, releasing buyer and seller from all further obligations under the contract.
  4. Section 83.63, Florida Statutes (Casualty Damage)
    This brief section simply provides that if rented residential premises are damaged or destroyed “so that the enjoyment of the premises is substantially impaired, the tenant may terminate the rental agreement and immediately vacate the premises.” This section continues to present a second scenario whereby a tenant may “vacate the part of the premises rendered unusable by the casualty, in which case the tenant’s liability for rent shall be reduced by the fair rental value of that part of the premises damaged or destroyed.”

Source: Florida Realtors, Florida Realtors Legal Hotline

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$250K Home Giveaway Sweepstakes for U.S. Military or Veterans

28 09 2017

Realtor.com® and Veterans United Home Loans, a U.S. Department of Veterans Affairs (VA) purchase lender, have teamed up to launch a $250,000 Veterans Day Home Giveaway Sweepstakes.

The contest will award up to $250,000 toward a home purchase to a U.S. military service member or veteran.

Veterans and current members of the military can enter the sweepstakes until Oct. 29 at realtor.com/homegiveaway.

The winner will be announced on Veterans Day, Nov. 11.

The winner will receive $250,000 (less tax withholding) at the closing of a home purchase transaction.

For more details, go to https://www.realtor.com/homegiveaway/rules.

Source: Realtor.com®





Big 6 Tax Cut from the New GOP

27 09 2017

President Trump and the congressional Republican leadership released their newest highly-promoted tax plan on 9/27/17. Although the president promised it would be a “very comprehensive report,” it is in fact only a broad outline that is silent on key details. It sketches out big tax cuts for businesses and high-income households, modest tax cuts for middle-income taxpayers, and simplification of the individual tax code—all of which would reduce federal revenues by trillions of dollars over the next decade.

Here are six key takeaways from the framework:

It is not a plan. Much like the White House effort last April, it is little more than a rough outline. Trump is approaching tax reform very differently than President Reagan, who kicked off the debate over what would become the Tax Reform Act of 1986 with a comprehensive opening bid.  Wednesday’s document leaves out many crucial details. It even fails to identify individual tax brackets (it describes the rates but not the income levels to which they’d apply). Oddly, it describes three individual income tax rates—12-25-35–then says a fourth higher bracket “may apply.”

It isn’t tax reform. It is a tax cut. There is no plausible way Congress can fully fund all of the tax cuts in this outline while complying with its constraints on revenue-raisers. Businesses would receive the biggest tax cuts, which would ultimately benefit the highest income households.

It leaves the dirty work to Congress. The framework highlights tax cuts—for corporations, pass-through businesses, and many (if not most) individuals. Yet, it fails to identify a single individual tax preference it would eliminate. Despite early rumors to the contrary, it is even silent on the state and local tax deduction.

The outline does explicitly identify those tax breaks the authors would protect, including such big-ticket preferences as the deductions for mortgage interest and charitable giving, as well as tax subsidies that “encourage work, higher education, and retirement security. “ Similarly, it identifies only one business-side revenue-raiser, a “partial” limit on interest deductibility, while promising to preserve business credits for research and low-income housing.

It would mostly benefit very high-income households. It may cut taxes modestly for some middle-income households, but it appears to be a far bigger tax cut for high-income households. Individual rate cuts, repeal of the Alternative Minimum Tax and the estate tax, and preservation of tax preferences for charitable giving, mortgage interest, and retirement savings all primarily benefit those with high-incomes. Tax cuts for corporations and, especially, pass-through businesses, would mostly benefit the highest-income households.

It would simplify the individual income tax. By doubling the standard deduction and repealing the individual AMT, it would make filing simpler for millions of taxpayers. The framework also calls for simplifying the tax treatment of education and retirement savings, a long overdue idea. However, as with so much else, it says nothing about how.

It would not generate three percent economic growth.  Despite the president’s promises, it is implausible that this plan would permanently boost the economy. Trillions of dollars in lost revenue would add to the federal debt, raise interest rates, and make it more costly for businesses to invest. Those costs would offset the benefits of lower corporate tax rates and expensing.

However, those beneficial provisions are less generous in this plan than in earlier Trump proposals that included even lower corporate tax rates and a provision to allow firms to fully–and permanently– expense their capital investments in the year they are acquired. Some analysts argued the expensing provision alone would significantly boost growth. But today’s framework would permit expensing for only five years—a provision that may accelerate the timing of new investment but do little or nothing to increase the long-term capital stock.

This tax framework tilts more closely to the plan proposed by the House Republican leadership in 2016 than it does to past Trump ideas. But by saying so little about how the president would pay for big tax cuts, this framework gives Republican lawmakers no political cover on the many tough choices they face. Thus, for all the hype, it barely moves the ball at all.

Source: Forbes





Florida ranks 12th for economic health, 13th for economic activity.

6 06 2017

Economic growth varies from state to state, according to WalletHub’s analysis of its latest study on economic health. Out of 51 rankings (including Washington, D.C.), however Florida ranks 12th for “economic activity.”

The personal-finance website WalletHub conducted an in-depth analysis of 2017’s Best & Worst State Economies. In order to determine America’s top economic performers, WalletHub says its analysts compared the 50 states and the District of Columbia across 27 key indicators of economic performance and strength.

Overall Florida rankings (1=best, 25=avg.)

  • Economic activity: 13
  • Economic health: 12
  • Innovation potential: 30

Florida’s total score was 54.48. Washington ranked at the top with 76.54 followed by California with 73.78. At the bottom of the list, West Virginia ranked 28.14, with Louisiana one slot higher at 33.22.

Economic performance of Florida (1=best, 25=avg.)

  • No. 5 – GDP (gross domestic product) growth
  • No. 37 – Exports per capita
  • No. 2 – Startup activity
  • No. 35 – Percent of jobs in high-tech industries
  • No. 39 – Annual median household income
  • No. 3 – Change in nonfarm payrolls (2016 vs. 2015)
  • No. 23 – Government surplus/deficit per capita
  • No. 31 – Unemployment rate

Source: Florida Realtors, https://wallethub.com/edu/states-with-the-best-economies/21697/





How to Prepare to Be a Homeowner

31 05 2017

Ready to Become a Homeowner?

What to Keep in Mind as You Leave Renting Behind

Each year, millions of Americans purchase a home. In 2015, that was about 5.2 million, according to the National Association of Realtors, and about 35% of them were first-time buyers. If you’re anything like those millions, you’ve been waiting for the moment you finally feel ready to become an owner yourself. You’ve probably carefully considered your budget, your rising rent, and your future prospects — do you plan to move or have kids in the next few years? Can you get by with a two-bedroom, or should you spring for three?

While you’re weighing your needs with your means, there are a few other components of the transition to keep in mind.

  1. Down Payment

Surely you haven’t overlooked this massive expense, which remains one of the biggest obstacles for hopeful homebuyers. Although you can negotiate the terms of your loan, depending on your credit score, you should plan to have 10% to 20% of your future home’s value saved up for a down payment — plus a few thousand more so you can be prepared for unanticipated repairs or other financial hiccups. If that seems impossible, the Federal Housing Administration has a program for first-time homebuyers, offering loans with down payments as low as 3.5%. However, with that small deposit comes larger monthly payments, and a larger amount paid by the end of the loan. Smaller down payments also result in another monthly cost: private mortgage insurance, which lenders sometimes require to protect themselves from loss.

  1. Closing Costs

Yes — there’s even more cash that comes into play when you finalize your home purchase. The down payment goes toward the home’s value, but then there is also a cluster of smaller fees that get thrown into the “closing costs” bucket: loan origination fee, credit report, loan underwriter, home inspection and appraisal, title search, survey fee, and taxes (on the sale, not property taxes), and other assorted fees delineated by your real estate agent. Fortunately, you’re not looking at another $30,000 — unless you’re planning to buy a $1.5 million home. Your closing costs will typically add up to between 2% and 5% of the home’s value.

  1. Insurance

As a renter, you probably paid a monthly insurance premium to make sure your personal belongings were protected in the event of a fire or other accident (at least you should have). And those premiums were probably pretty cheap. Your homeowners insurance premiums, however, will be quite a bit higher, and that’s because it has more to cover aside from the extra square footage. Homeowners insurance will financially protect you from damages incurred to your home, and all of your belongings inside of it, from damage caused by wind, hail, ice, fire, and more.

  1. Taxes

This is another one of the costs that discourages a lot of renters when they begin to consider owning. But property taxes don’t have to be scary, or even that expensive. Familiarize yourself with the local tax rate before the purchase, and then set aside money in an escrow account each month so that you have enough to make the payment when it comes due, instead of scrambling into your savings. Many lenders require this escrow account. When they’re due — and how often — depends on your location, but the average U.S. household pays just over $2,000 in annually.

  1. Maintenance

Time to start filling up that garage: Get a lawnmower, shovel, weedwacker, rake, or any other implement you’ll need to keep your property attractive and safe in every season. Additionally, plan to spend about 1% of your home’s value on annual maintenance projects, which can range from new batteries for your smoke detector to replacing your hot water heater or significant replumbing. Even brand-new houses aren’t immune to maintenance costs, so keep a devoted savings account at the ready — and don’t overlook your duties. Create (or find) a maintenance checklist and schedule to stay on top of important upkeep.

This article was provided by Sam Radbil, a contributing member of the marketing and communications team at ABODO. ABODO Gainesville apartments was founded in 2013 and is headquartered in Madison, Wisconsin.





Ready to Become a Homeowner?

31 05 2017

What to Keep in Mind as You Leave Renting Behind

Each year, millions of Americans purchase a home. In 2015, that was about 5.2 million, according to the National Association of Realtors, and about 35% of them were first-time buyers. If you’re anything like those millions, you’ve been waiting for the moment you finally feel ready to become an owner yourself. You’ve probably carefully considered your budget, your rising rent, and your future prospects — do you plan to move or have kids in the next few years? Can you get by with a two-bedroom, or should you spring for three?

Home

 

 

While you’re weighing your needs with your means, there are a few other components of the transition to keep in mind.

1. Down Payment

Surely you haven’t overlooked this massive expense, which remains one of the biggest obstacles for hopeful homebuyers. Although you can negotiate the terms of your loan, depending on your credit score, you should plan to have 10% to 20% of your future home’s value saved up for a down payment — plus a few thousand more so you can be prepared for unanticipated repairs or other financial hiccups. If that seems impossible, the Federal Housing Administration has a program for first-time homebuyers, offering loans with down payments as low as 3.5%. However, with that small deposit comes larger monthly payments, and a larger amount paid by the end of the loan. Smaller down payments also result in another monthly cost: private mortgage insurance, which lenders sometimes require to protect themselves from loss.

2. Closing Costs

Yes — there’s even more cash that comes into play when you finalize your home purchase. The down payment goes toward the home’s value, but then there is also a cluster of smaller fees that get thrown into the “closing costs” bucket: loan origination fee, credit report, loan underwriter, home inspection and appraisal, title search, survey fee, and taxes (on the sale, not property taxes), and other assorted fees delineated by your real estate agent. Fortunately, you’re not looking at another $30,000 — unless you’re planning to buy a $1.5 million home. Your closing costs will typically add up to between 2% and 5% of the home’s value.

3. Insurance

As a renter, you probably paid a monthly insurance premium to make sure your personal belongings were protected in the event of a fire or other accident (at least you should have). And those premiums were probably pretty cheap. Your homeowners insurance premiums, however, will be quite a bit higher, and that’s because it has more to cover aside from the extra square footage. Homeowners insurance will financially protect you from damages incurred to your home, and all of your belongings inside of it, from damage caused by wind, hail, ice, fire, and more.

4. Taxes

This is another one of the costs that discourages a lot of renters when they begin to consider owning. But property taxes don’t have to be scary, or even that expensive. Familiarize yourself with the local tax rate before the purchase, and then set aside money in an escrow account each month so that you have enough to make the payment when it comes due, instead of scrambling into your savings. Many lenders require this escrow account. When they’re due — and how often — depends on your location, but the average U.S. household pays just over $2,000 in annually.

5. Maintenance

Time to start filling up that garage: Get a lawnmower, shovel, weedwacker, rake, or any other implement you’ll need to keep your property attractive and safe in every season. Additionally, plan to spend about 1% of your home’s value on annual maintenance projects, which can range from new batteries for your smoke detector to replacing your hot water heater or significant replumbing. Even brand-new houses aren’t immune to maintenance costs, so keep a devoted savings account at the ready — and don’t overlook your duties. Create (or find) a maintenance checklist and schedule to stay on top of important upkeep.

This article was provided by Sam Radbil, a contributing member of the marketing and communications team at ABODO. ABODO Gainesville apartments was founded in 2013 and is headquartered in Madison, Wisconsin.




The Shipyards Project

23 02 2017

The Downtown Investment Authority (DIA) has expanded the scope of a proposal for redevelopment of the Shipyards project to also include Metropolitan Park. Previous discussion and negotiations with Shad Khan, who submitted a proposal in 2015 to redevelop the Shipyards, have been scraped and the process for redevelopment will start over. The DIA has officially begun soliciting proposals on Jan. 4, with a due date of March 20.

shipyards-activity-deck-750xx530-298-0-82The Shipyards has long been seen as a key property along the St. Johns River that would be a catalyst for more development.

There are federal strings attached to Metropolitan Park, which was developed with the help of a $1.8 million federal grant with the understanding the property would be used for public use.

DIA CEO Aundra Wallace said some portion of the about-70 acres that are being proposed for development will be public space, meeting the federal requirements with Metropolitan Park. The National Park Service would have to sign off on the plan.

The amount of time the DIA would take to select the most suitable bid was not discussed, but once that bid has been selected and approved by the City Council, an 18-month time frame was provided for negotiations.

Jaguars President Mark Lamping released the following statement following the DIA meeting.

“We support and welcome the DIA’s decision and look forward to the opportunity to take a new and broader look at a riverfront development that includes Met Park. Shad’s interest in developing the Met Park site and Downtown Jacksonville has been well documented and is consistent with the Jaguars’ overall commitment to the revitalization of our downtown core. The Daily’s Place project is an ongoing example of that commitment, and a potential riverfront development that included the Met Park property would represent a logical next phase.”

Source: Jacksonville Business Journal








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