Homestead Exemption

If you have received notification that your homestead exemption has been revoked and you owe taxes for prior years, we may be able to help you.  In Florida, you may only claim the homestead protection on one property.  Special exceptions may exist if you are married, but the general rule is that you can only claim one homestead.

Therefore, if you are a seasonal resident and have a second home, your homestead could be jeopardized if you are receiving another homestead exemption in another state.  Florida may revoke your homestead retroactively even if you are receiving that homestead exemption unknowingly in another state.

We recently discovered that our Florida residents who also maintain a home in Ohio were unaware that Ohio was providing them with a homestead exemption.  This caused the Florida resident to lose their homestead and created a large tax liability for the Florida homeowner.  We understand that Pinellas County itself has approximately 100 cases namely dealing with Ohio residents.  We have assisted our clients in reversing the denial of the homestead exemption in Florida thereby saving them thousands of dollars in taxes.

Contact us for a FREE consultation regarding the granting or denial of homestead protection in Florida.  We are here to assist you.

Benefits to Purchasing an NFA Trust

Even with the new requirements of ATF Rule 41F, there are still significant benefits to purchasing an NFA Trust. (1) You may name other individuals as Co-Trustees so that they are permitted to use the Class 3/Title II weapons.  Note that if you purchase the weapon individually, no one else is permitted to use item.  (2) You will name at least one beneficiary to receive the items upon your death or incapacity, thereby passing the items to the person YOU designate.  (3) The named beneficiary will complete ATF Form 5 and will not have to pay the tax stamp to transfer the items into their name.

ATF Rule 41F

As of July 13, 2016, the new ATF Rule 41F went into effect. This new rule applies to all “responsible persons” who are completing a new Application for the purchase or manufacture of a Class 3/Title II weapon.  At this point, there has been no clarification as to the term “responsible person.”  However, under “Definitions,” on Form 5320.23, it states:  “Examples of who may be considered a responsible person include settlors/grantors, trustees…”

You will need to submit the following to the ATF with your Application (Form 1, 4 or 5): (a) two fingerprint cards; (b) two 2” x 2” photographs, and (c) two Responsible Person Questionnaires (Form 5320.23).  In addition, the completed Application and Form 5320.23 must be sent to your Chief Law Enforcement Officer (“CLEO”) advising them that you are in the process of purchasing the Class 3/Title II weapon.  The CLEO does not need to sign this form.

Rule 41F even applies to anyone who has previously created a gun trust and has purchased Class 3/Title II weapons under the trust. Once you purchase a Class 3/Title II weapon under Rule 41F and submit fingerprints and photograph, and if you purchase another weapon within 24 months, you do not need to resubmit fingerprints and photo.  You will, however, need to complete ATF Form 5320.23 and provide it along with the new Application to your CLEO.  In addition, if a Co Grantor, Co-Trustee or a beneficiary who is 21 years of age or older lives outside of the jurisdiction where the trust items are held, that person will also need to send a copy of the Application and ATF Form 5320.23 to their CLEO.  Feel free to call our office should you have any questions regarding the new Rule.

ALERT: FIRPTA – WITHHOLDING RATE TO INCREASE TO 15%

FIRPTA is a tax law passed in 1981 that requires foreign persons to pay U.S. income tax on the gains they make from selling U.S. real estate. The duty is on the U.S. national buyer (and not the settlement agent) to deduct and withhold a portion of the sales price and report the sale to the Internal Revenue Service (IRS). Buyers can withhold less than the statutory amount if they obtain a determination of the specific amount of tax owed by the foreign national using IRS Form 8288-B. In most cases, the settlement agent is the party that actually remits the funds to the IRA, but the buyer is held legally responsible. Additionally, until the tax is paid in full, the government obtains a security interest in the real property.

For more information, please click here.

ATF Rule 41F

We have had several phone calls from our gun trust clients regarding ATF Rule 41F which will go into effect on July 13, 2016. For those persons whose Form 1 or Form 4 applications are pending prior to July 13th, there should be no effect on your purchase and application.
Beginning on July 13, 2016, anyone who submits their application (with or without a gun trust) to the ATF must submit the application with fingerprints and a 2” x 2” photo (like a passport photo) of all “responsible parties.” The photo must have been taken within one year prior to the date of the application. Each responsible party must also complete ATF Form 5320.23. In addition, you must provide a copy of the application and ATF Form 5320.23 to your local chief law enforcement officer (CLEO). Speaking on the trusts we prepare in our office, “responsible parties” are the Grantors and Trustees. Beneficiaries are not considered “responsible parties” because they are not given the authority “to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust.” (Rule 47F, § 479.11 Meaning of terms)
If you are using our Trust and if you submit a subsequent application within 24 months of ATF approval of Form 1 or Form 4, the responsible persons should not need to resubmit fingerprints and photographs unless the trust has been modified within that time period.
If you have any questions regarding this new Rule, feel free to call our office.

NEW CONDO TERMINATION LAWS: WHAT YOU AND YOUR CLIENT NEED TO KNOW

My client wants to sell their condominium unit, and I am concerned because many of the units are owned by the same entity, presumably an investor. Are there any laws that may affect how I advise my client in this situation?

Yes, in fact Florida law was recently changed to provide additional protections to condominium owners and to make it more difficult for developers and bulk owners to terminate condominiums. Therefore, whether your client is looking to sell or purchase a condominium unit, these changes should be taken into consideration when deciding whether to move forward with the deal.

In making condominiums more difficult to terminate, the law now states that a plan for termination of a condominium can be blocked if at least 10% of the total voting interests affirmatively reject the plan by voting against it or providing written objections. If the 10% threshold is met, no vote on a plan for termination may take place for the next 18 months. Also, be aware that no voting interest may be suspended for any reason when considering a plan for termination—not even for delinquent assessments.

The additional protections for condominium owners kick in when a “bulk owner,” meaning one who holds at least 80% of the voting interests, exists at the time the plan for termination is recorded. In this situation, owners are now guaranteed at least the fair market value of their unit if a termination occurs. Owners who purchased their unit directly from the developer, rejected the plan for termination, and whose unit has homestead exemption must be paid at least their original purchase price as long as they are current on their assessments and any mortgage on the unit. All other owners must be paid at least the fair market value of their unit, as determined no earlier than 90 days before the recording of the plan for termination. In addition, all owners whose unit has a homestead exemption must also receive a relocation payment equal to 1% of the termination proceeds allocated to their unit.

Owners will now also have their first mortgage satisfied in the event of a bulk owner termination if they are current on all assessments and obligations to the association and all mortgages on their unit. The plan for termination must include satisfying first mortgages on units, though the amount paid to satisfy a first mortgage must not exceed the amount of proceeds allocated to that unit under the plan. However, even if the proceeds from the termination are not sufficient to satisfy the first mortgage, the mortgage will be deemed satisfied when the mortgagee receives either the proceeds allocated to the unit under the plan or the outstanding balance of the mortgage.

Another protection is that owners who occupy their unit may choose to lease back their unit for up to 12 months following the effective date of a termination involving a bulk owner. However, owners must request to lease their unit within 90 days after the plan for termination is recorded and sign a lease within 15 days of being presented with one. Otherwise, they will be required to vacate the unit.

Due to these changes, it is very important to know the fair market value of a unit and if a bulk owner does or could soon exist when determining whether to buy or sell a condominium unit.

– Contributed by Jonathan Northington. Jonathan is a member of the Bay Area Real Estate Council (www.barec.com) and is a real estate and business law attorney at Davis Basta Law Firm, P.A.

We are here to help with your National Firearms Act (NFA) questions

We invite you to peruse our website where you can find information on Firearm Trusts that we prepare, designed to address federal and Florida State law. In most cases, our firm charges a flat fee (including mailing costs) for a Firearms Trust (see our webpage: http://davisbastalaw.com/practice-areas/gun-trusts/).

If you plan to purchase certain types of items, including but not limited to machine guns, sound suppressors, short barreled shotguns, or short barreled rifles, is regulated by federal law. Placing such items in a trust is a convenient and popular method of holding these items, which is a type of ownership recognized in Florida.

We caution owners of class III items when relying on boilerplate forms or software designed to create trusts. You should ensure that your trust and any trust done for your client is properly drafted to deal with any special issues involved with items regulated by the NFA. Our law firm practices in the area of real estate, which encompasses estate planning, and has been drafting gun trusts since 2008. When the NFA is violated, the individuals who violate the Act may be subject to substantial fines, criminal charges, and forfeiture.

If you would like any information or to discuss our services, please do not hesitate to contact us at anytime.

Can I rent my property if it is homestead property in Florida?

Engaging an attorney as you plan and proceed is essential on this issue, because the laws and application of the laws vary depending on whether there is a rental, lease, or license, in addition to other case-by-case details. In addition, it has been argued that the rental statute (Fla. Stat. §212) can be considered ambiguous and does not provide homeowners with concrete guidance. These ambiguities are compounded by the nuances in court’s decisions in this area.

With many title companies closing their doors, are you wondering where to get title polices and who can do your closings?

The spiral downturn in the real estate market caused title companies to take an especially hard hit.  Brokers and their agents, who once relied on their favorite title company, are now faced with the task of searching for a new place they can trust.  They need a place to bring their closings and a place that can issue that necessary title policy.  I know of such a place.  It’s your local real estate attorney.

During the real estate boom there was so much work for everyone that real estate professionals, more often than not, looked to the closest and best title company to assist them with their closings.  Once they developed a relationship with that certain title company, they did not need to look anywhere else for quality closings.

For this reason, many brokers and their agents have never had the opportunity to work with a real estate attorney.  Unlike title companies, many real estate attorneys were able to weather the real estate crash by assisting individuals with short sales, loan modifications, foreclosures and civil lawsuits.  Now as the real estate market starts to slowly climb back, those without their trusted title company should consider taking their business to a real estate attorney.

Most attorneys who specialize in real estate law usually have the ability to write a title insurance policy and conduct closings.  More importantly, if legal issues arise, they are capable of expediently resolving these issues before crucial deadlines that can sometimes make a deal fall completely apart.

While many states, require the services of a licensed attorney for all real estate transactions Florida is not one of those states.  In Florida, an attorney is not required for the issuance of a title policy or to close real property.  Notwithstanding that fact, many Florida brokers realize the value of having a real estate attorney at closing and wouldn’t think of doing it any other way.

Still some Brokers may be reluctant to take their real estate matters to an attorney.  It is a common misconception that it is more expensive to get a title policy or have a closing conducted with an attorney.   However, the cost of title insurance in Florida is promulgated, which means that the rates for that type of insurance are set by the State.  Therefore, it is the same price for the policy regardless of who does the issuing.  More importantly, having a real estate attorney on your side may actually save money.

A real estate attorney has typically reviewed hundreds of real estate documents.  They are familiar with titles to real estate and real estate transactions in general.  They know what to look for and how to spot and avoid potential problems.  Most importantly, a licensed attorney is the only person who can give you legal advice.

Give us a call and  tell us about your next deal.  You will be pleasantly surprised to find our doors are open and we will be pleased to issue that title policy and close your transaction.