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Florida legislature to consider new real estate laws
By Toluse Olorunnipa,
The Miami Herald March 07--The many woes of Florida's housing market are well-known: hundreds of thousands of foreclosures, millions of underwater mortgages and a four-year trail of depreciating property values.
Florida lawmakers, handicapped by a $3.6 billion budget shortfall, will take their best shot at solving some of the most pressing housing problems during this year's legislative session, which kicks off on Tuesday in Tallahassee.
In a session likely to be dominated by budget battles, public employee pensions and education reform, housing legislation isn't at the top of most lawmakers' minds, said Arden Shank, president of Neighborhood Housing Services of South Florida.
"Housing as a public policy issue is a real face-the-music issue for many homeowners and has been an issue for many years now, and folks tend to forget about it," he said. "Foreclosure prevention, at least for South Florida, is still a major issue."
A few lawmakers--many of them from South Florida--are pitching housing bills this year. The proposed laws generally fall into three categories: help for condo associations, property tax reform and changes to the foreclosure process.
ASSOCIATIONS
Last year, the Legislature passed the Distressed Condo Relief Act, which gave condominium associations the authority to collect rent directly from the tenants of delinquent unit owners, and bar any non-paying condo owners from using common amenities like pools.
A couple of bills up for consideration this year seek to expand on those powers, appealing to the growing number of condo boards frustrated by their defaulting neighbors.
Woodie Neiss, president of the condo board at The Bamboo House Condominium in Miami Beach, says his association needs every tool it can get to deal with delinquent homeowners. One unit owner, he says, is $14,000 behind on maintenance fees and has been openly defiant towards anyone trying to collect.
"He's completely milking the system. He knows that it's so hard for people to kick him out and his goal is just to stay in there rent free," he said. "We pay for the water, we pay for the insurance, we pay for the cable. It's completely ridiculous."
Since the condo building only has 12 units, each non-paying owner leaves a large burden on the other owners, said Neiss, who became president when nine of the unit owners were paying their fees.
One bill, backed by Sen. Gen Margolis, D-Aventura, would give condo associations the power to cut off cable and Internet access to unit owners who are more than 90 days behind on their maintenance fees.
The Bamboo House condo has a bulk cable agreement, Neiss said, so owners in good standing have been subsidizing the cable costs of the delinquent owner for four years. A law that would allow the condo to cut off cable in the delinquent units would be helpful, he said.
"Why do these people need cable television?" he asked. "So they can sit there and make their lives even more comfortable, while they're making life miserable for the rest of us?"
Critics say the bill is an overreach, and will not help a situation caused mostly by stubbornly high unemployment.
Sen. Jeremy Ring, D-Margate, is against the idea of cutting off unit owners' cable, but is sponsoring legislation that he believes will help associations and clean up some of the foreclosure process at the same time.
His bill provides protections for condo associations that file foreclosure against delinquent unit owners, so that they are not held liable for that owner's past due assessments when they take title. Banks have been accused of delaying foreclosures on condos, waiting for condo associations to foreclose so that the associations would be stuck holding the bill for past past-due assessments.
"We have to do two things--we have to be able force the banks to foreclose quicker," Ring said. "Then we try to make sure the banks remain liable for what their statutory obligation is."
Another provision in Sen. Ring's bill would allow associations to continue collecting 100 percent of the rent payments from tenants of delinquent owners until those units are brought current, clearing up some of the confusion left behind by last year's bill.
PROPERTY TAXES
After a head-scratching property tax season in which many homeowners saw their market values slump and their assessed values increase, a number of lawmakers have their sights set on the "recapture rule" tucked within Florida's Save Our Homes law. There are a number of bills circulating the Legislature this year seeking to eliminate the rule, which mandates that while a property's assessed value can only increase by a maximum of three percent each year, it must continue increasing until it matches up with market value. For homeowners who purchased long before the housing boom, their homes' assessed values--which determine property taxes--have not yet caught up with market values, meaning continued tax increases in a slumping market.
Sen. Anitere Flores, a Democrat representing Southwest Miami-Dade County, is one of a handful of lawmakers pitching a bill that would scrap the recapture rule.
Sen. Flores's bill is likely to have a lot of popular appeal in South Florida, where more than 300,000 homes were hit by the recapture rule this year. In Miami-Dade County, a tax rate increase in 2010 combined with the recapture rule to cause property tax jumps for a number of homeowners, even as their values fell an average of 13 percent. Mayor Carlos Alvarez and County Commissioner Natacha Seijas, who signed off on the millage rate increase, are now both facing recall elections as voters signed petitions to have them removed from office.
But even with the popular support from struggling long-homesteaded property owners, the bill faces its share of criticism . As cities and counties stare at gaping budget holes, an elimination of the recapture rule could mean less property tax revenue for local governments, or possibly millage rate increases to make up the balance. When a similar bill was considered last year, the Revenue Estimating Conference estimated that eliminating the recapture rule would result in a revenue reduction of at least $135 million a year.
The bill would also mean boom-era homebuyers could face an even more disproportionately large property tax burden than those who have owned their homes for a decade or more.
Another property tax-focused bill being pitched by Rep. Chris Dorworth, R-Lake Mary, would lower property tax assessments for new homeowners and investors. People who buy a home after Jan. 1, 2012, would receive an additional homestead exemption of 50 percent of the property's value. For non-homesteaded homeowners, Dorwoth's bill, and other similar ones, would cap the increase in assessments at 3 percent per year. That cap is currently 10 percent.
FORECLOSURES
While Congress is considering eliminating a handful of the federal government's foreclosure prevention programs, state lawmakers have not come up with many plans for solving Florida's nation-leading foreclosure problem, said Shank.
"In Miami-Dade, Broward and Palm Beach counties, this is still a big deal," he said.
A couple bills circulating Tallahassee this year address the foreclosure problem, and some of its side effects.
Senate Bill 912 seeks to expand the availability of affordable housing and low-income rentals in the state. The bill also takes on the overloaded supply of housing, a problem that has been particularly acute in foreclosure-ridden South Florida, where more than 60,000 homes are on the market.
In order to make sure that affordable housing money does not go towards projects that would add to an already bloated housing inventory, the bill would prohibit certain state programs from funding the construction of new homes and apartment communities. The funds could be used to rehabilitate vacant and abandoned homes and rental apartments, instead.
Another foreclosure-related bill provides protections for renters who live in homes being repossessed by a bank. Those tenants would be guaranteed at least 90 days notice before they have to move out, under the bill.
One of the more controversial laws moving through the House and Senate would provide banks and mortgage lenders the option of conducting foreclosure on commercial properties outside of the courtroom. Florida, one of 23 judicial foreclosure states, currently requires lenders to go to court in order to repossess properties that are delinquent on payments. This bill would allow lenders to reclaim a property through a trustee foreclosure, potentially freeing up room in the courts for residential foreclosure cases, which have been moving at a snail's pace since banks discovered errors in their documents last fall.
In South Florida, there are nearly 100,000 foreclosure cases stuck somewhere in the court system.
http://www.americanchronicle.com/articles/yb/156500906
By Toluse Olorunnipa,
The Miami Herald March 07--The many woes of Florida's housing market are well-known: hundreds of thousands of foreclosures, millions of underwater mortgages and a four-year trail of depreciating property values.
Florida lawmakers, handicapped by a $3.6 billion budget shortfall, will take their best shot at solving some of the most pressing housing problems during this year's legislative session, which kicks off on Tuesday in Tallahassee.
In a session likely to be dominated by budget battles, public employee pensions and education reform, housing legislation isn't at the top of most lawmakers' minds, said Arden Shank, president of Neighborhood Housing Services of South Florida.
"Housing as a public policy issue is a real face-the-music issue for many homeowners and has been an issue for many years now, and folks tend to forget about it," he said. "Foreclosure prevention, at least for South Florida, is still a major issue."
A few lawmakers--many of them from South Florida--are pitching housing bills this year. The proposed laws generally fall into three categories: help for condo associations, property tax reform and changes to the foreclosure process.
ASSOCIATIONS
Last year, the Legislature passed the Distressed Condo Relief Act, which gave condominium associations the authority to collect rent directly from the tenants of delinquent unit owners, and bar any non-paying condo owners from using common amenities like pools.
A couple of bills up for consideration this year seek to expand on those powers, appealing to the growing number of condo boards frustrated by their defaulting neighbors.
Woodie Neiss, president of the condo board at The Bamboo House Condominium in Miami Beach, says his association needs every tool it can get to deal with delinquent homeowners. One unit owner, he says, is $14,000 behind on maintenance fees and has been openly defiant towards anyone trying to collect.
"He's completely milking the system. He knows that it's so hard for people to kick him out and his goal is just to stay in there rent free," he said. "We pay for the water, we pay for the insurance, we pay for the cable. It's completely ridiculous."
Since the condo building only has 12 units, each non-paying owner leaves a large burden on the other owners, said Neiss, who became president when nine of the unit owners were paying their fees.
One bill, backed by Sen. Gen Margolis, D-Aventura, would give condo associations the power to cut off cable and Internet access to unit owners who are more than 90 days behind on their maintenance fees.
The Bamboo House condo has a bulk cable agreement, Neiss said, so owners in good standing have been subsidizing the cable costs of the delinquent owner for four years. A law that would allow the condo to cut off cable in the delinquent units would be helpful, he said.
"Why do these people need cable television?" he asked. "So they can sit there and make their lives even more comfortable, while they're making life miserable for the rest of us?"
Critics say the bill is an overreach, and will not help a situation caused mostly by stubbornly high unemployment.
Sen. Jeremy Ring, D-Margate, is against the idea of cutting off unit owners' cable, but is sponsoring legislation that he believes will help associations and clean up some of the foreclosure process at the same time.
His bill provides protections for condo associations that file foreclosure against delinquent unit owners, so that they are not held liable for that owner's past due assessments when they take title. Banks have been accused of delaying foreclosures on condos, waiting for condo associations to foreclose so that the associations would be stuck holding the bill for past past-due assessments.
"We have to do two things--we have to be able force the banks to foreclose quicker," Ring said. "Then we try to make sure the banks remain liable for what their statutory obligation is."
Another provision in Sen. Ring's bill would allow associations to continue collecting 100 percent of the rent payments from tenants of delinquent owners until those units are brought current, clearing up some of the confusion left behind by last year's bill.
PROPERTY TAXES
After a head-scratching property tax season in which many homeowners saw their market values slump and their assessed values increase, a number of lawmakers have their sights set on the "recapture rule" tucked within Florida's Save Our Homes law. There are a number of bills circulating the Legislature this year seeking to eliminate the rule, which mandates that while a property's assessed value can only increase by a maximum of three percent each year, it must continue increasing until it matches up with market value. For homeowners who purchased long before the housing boom, their homes' assessed values--which determine property taxes--have not yet caught up with market values, meaning continued tax increases in a slumping market.
Sen. Anitere Flores, a Democrat representing Southwest Miami-Dade County, is one of a handful of lawmakers pitching a bill that would scrap the recapture rule.
Sen. Flores's bill is likely to have a lot of popular appeal in South Florida, where more than 300,000 homes were hit by the recapture rule this year. In Miami-Dade County, a tax rate increase in 2010 combined with the recapture rule to cause property tax jumps for a number of homeowners, even as their values fell an average of 13 percent. Mayor Carlos Alvarez and County Commissioner Natacha Seijas, who signed off on the millage rate increase, are now both facing recall elections as voters signed petitions to have them removed from office.
But even with the popular support from struggling long-homesteaded property owners, the bill faces its share of criticism . As cities and counties stare at gaping budget holes, an elimination of the recapture rule could mean less property tax revenue for local governments, or possibly millage rate increases to make up the balance. When a similar bill was considered last year, the Revenue Estimating Conference estimated that eliminating the recapture rule would result in a revenue reduction of at least $135 million a year.
The bill would also mean boom-era homebuyers could face an even more disproportionately large property tax burden than those who have owned their homes for a decade or more.
Another property tax-focused bill being pitched by Rep. Chris Dorworth, R-Lake Mary, would lower property tax assessments for new homeowners and investors. People who buy a home after Jan. 1, 2012, would receive an additional homestead exemption of 50 percent of the property's value. For non-homesteaded homeowners, Dorwoth's bill, and other similar ones, would cap the increase in assessments at 3 percent per year. That cap is currently 10 percent.
FORECLOSURES
While Congress is considering eliminating a handful of the federal government's foreclosure prevention programs, state lawmakers have not come up with many plans for solving Florida's nation-leading foreclosure problem, said Shank.
"In Miami-Dade, Broward and Palm Beach counties, this is still a big deal," he said.
A couple bills circulating Tallahassee this year address the foreclosure problem, and some of its side effects.
Senate Bill 912 seeks to expand the availability of affordable housing and low-income rentals in the state. The bill also takes on the overloaded supply of housing, a problem that has been particularly acute in foreclosure-ridden South Florida, where more than 60,000 homes are on the market.
In order to make sure that affordable housing money does not go towards projects that would add to an already bloated housing inventory, the bill would prohibit certain state programs from funding the construction of new homes and apartment communities. The funds could be used to rehabilitate vacant and abandoned homes and rental apartments, instead.
Another foreclosure-related bill provides protections for renters who live in homes being repossessed by a bank. Those tenants would be guaranteed at least 90 days notice before they have to move out, under the bill.
One of the more controversial laws moving through the House and Senate would provide banks and mortgage lenders the option of conducting foreclosure on commercial properties outside of the courtroom. Florida, one of 23 judicial foreclosure states, currently requires lenders to go to court in order to repossess properties that are delinquent on payments. This bill would allow lenders to reclaim a property through a trustee foreclosure, potentially freeing up room in the courts for residential foreclosure cases, which have been moving at a snail's pace since banks discovered errors in their documents last fall.
In South Florida, there are nearly 100,000 foreclosure cases stuck somewhere in the court system.
http://www.americanchronicle.com/articles/yb/156500906
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