Category Archives: Real Estate Blog


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.

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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 ( and is a real estate and business law attorney at Davis Basta Law Firm, P.A.

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.


If you purchase a foreclosure home and there is a tenant on the property you should provide them with the 90 day notice as soon as possible. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111-203, 124 Stat. 1376, 2204 (2010)) amended the Protecting Tenants at Foreclosure Act of 2009 (“PTFA”) to further define the date of notice of foreclosure as the date which complete title to the property is transferred; therefore, a new owner must have the Certificate of Title before providing a 90 day notice to a tenant. While determining if the tenant has a “bona fide” tenancy, it is good practice to provide the 90 day notice immediately once the Certificate of Title is issued.

It is important to understand that there are people who are taking advantage of the PTFA. Some homeowners will create a lease that is largely in favor of the tenant and charge a minimal rent rate and rent the property to friends or family.  The PTFA has addressed this in the Act.  It makes clear that it only provides protection to certain types on individuals residing on the property. The PTFA specifically states:

The protections of this law apply to tenants under a “bona fide” lease or tenancy. A lease or tenancy is “bona fide” only if: (1) The mortgagor or a child, spouse, or parent of the mortgagor under the contract is not the tenant; (2) The lease or tenancy was the product of an arm’s-length transaction; (3) The lease or tenancy requires the receipt of rent that is not substantially less than fair market rent or the rent is reduced or subsidized due to a federal, state, or local subsidy.

(Pub. L. No. 111-22, Div. A, Title VII, 123 Stat. 1632, 1660-62 (2009)).

If you are thinking about purchasing a property at a foreclosure sale, it is really important to do adequate research to determine if there is anyone residing on the property because tenants do have protections under the PTFA.  Be aware too that if you purchase a property that someone resides in, it may take extra time and money to evict or eject the tenant.  On the flip side, if you are looking to rent the home you purchased, you may end up with a great tenant who is ready to pay you rent, without having to do any more work on your own!

Danielle can be reached at [email protected]

WHAT EVERY REALTOR SHOULD KNOW: The Dodd-Frank Act and its impact on real estate

1. What is the Dodd-Frank Act? It is a law passed in 2010 and named after Barney Frank, a former congressman from Massachusetts and Christopher Dodd, a former senator from Connecticut, who sponsored the law. The law’s primary purpose was to address the excesses in the marketplace which led to the real estate bubble and subsequent collapse, and specifically, to provide legislation that would eliminate the taxpayers bailing out “too big to fail” banks and financial institutions.

2. What is in the law? The scope of the law is enormous. The law itself is 848 pages and the regulations interpreting and enforcing the law are in excess of 14,000 pages. Congress was not only concerned about taxpayer bailouts but was also concerned with “predatory lending” to consumers. As a result, banks, financial institutions and even individuals who lend money to consumers and take as security a mortgage on a primary residence are covered by the law.

3. How does the law affect real estate locally? Banks and other financial institutions have huge regulatory burdens to overcome to assure that the loans which are made satisfy the criteria established in the law. Sanctions for violations of the law are extremely punitive and for the most part, banks will err on the side of caution when deciding whether to make a loan to a customer on a primary residence. The net result is higher bank fees and fewer loans made as a result of the regulatory costs and thresholds placed on banks.

4. How does the law affect individuals? Sellers financing the sale of their own property are covered under the rule. Thus, if you are representing an owner who is willing to hold the mortgage on the sale of his or her property, you must make sure the attorney or title company closing the transaction is aware of the regulations of Dodd-Frank. In short, one who owns property can finance the sale of 3 properties on any one 12 month period. However, the seller must not have constructed the home under contract, the financing must be fully amortizing (no balloon mortgages!) and the loan must have a fixed interest rate or an adjustable interest rate with “reasonable” lifetime limits on rate increases. The rule is better if the seller is only financing one home in a 12 month period as the mortgage can contain a balloon provision.

5. What if I want to finance the purchase of a residence from my child or other family member? You can’t do it. The type of financing is not allowed under Dodd-Frank.

6. What are the sanctions for a violation of Dodd-Frank? There are several but one is a $1,000,000.00 a day fine.

7. What are exemptions or ways to avoid Dodd-Frank? Forget about it-there aren’t any absent conventional financing, financing through a mortgage broker or complying with the limited owner financing rules mentioned above.

This Article was sponsored by the Bay Area Real Estate Council (BAREC) and written by Richard “Rick” A. Miller. Rick, a Board Certified Real Estate Lawyer, is a Board member of BAREC and a Managing Partner at Miller, Crosby & Miller, P.A., 2323 South Florida Avenue, Lakeland, FL 33803. Rick may be reached at (863) 688-7038.

A Fleeting Dream: Homeownership for Young Americans

Many young Americans continue to hold the prospect of home ownership in high esteem despite facing rising rental costs, tougher loan regulations, and staggering student loan debt. According to Gallup’s 2013 Economy and Personal Finance survey, approximately 70% of Americans aged 18 to 29 currently do not own a home, but they plan on buying one within the next 10 years. Young Americans cite several reasons for desiring home ownership, including: lack of building equity, inability to alter their living environment, and unpredictable rent increases.

One of the main factors impacting young Americans’ ability to become homeowners is high rental prices. Trulia reported the average annual rental increase to be 3.9%—far outpacing inflation and income growth. In addition to receiving lower salaries, over half of young Americans spend 30% or more of their income on housing; in 1960, only a quarter of renters spent that much (according to the Harvard Joint Center for Housing Studies). With data like this, it is no wonder young Americans have trouble buying a home.

To further compound the situation, the FHA recently announced it was drastically reducing loan limits for FHA-insured loans. The FHA also reset metropolitan statistical (MSA) median home prices to 2008 prices instead of 2007 prices (when prices were at a peak), which previously prevailed. Thus, young people are less able to receive the loan amounts necessary to purchase a home in higher paying areas.

Finally, many young Americans are saddled with substantial student loan debt, which is often times coupled with high interest rates. According to a report released on December 4, 2013 by the Institute for College Access and Success’ Project on Student Debt, the average student loan debt for graduates of a four year college is $29,000.00. Approximately seven in ten seniors graduated with student loan debt. With a monthly loan payment of several hundred dollars, today’s young people simply cannot save enough money to afford a home.

Although challenges to home ownership exist for young people, the desire to own a home is definitely there. Despite the negative data, there can be a positive side from a Realtor® standpoint. For instance, approximately 21% of young Americans already own a home. Considering this fact with the fact that 70% of young Americans desire home ownership indicates there are very few young Americans who have no intention of becoming homeowners.

What does this mean for Realtors®? Young Americans can be a large customer base. As such, there are a couple of things sales agents should be doing. First, agents should include renters and young adults in their marketing campaigns so the agent comes to mind when they are ready to buy. Second, agents must become familiar with all financial tools and programs that would benefit this segment of the population (e.g., lease-option contracts, student loan consolidation). If an agent can make it financially feasible, there is a high likelihood of making the dream of home ownership a reality for young adults.

I rented a home that I just discovered is being foreclosed. Can I be evicted without notice?

With the increase in the number of foreclosures, this is a common question. There have been many instances of unsuspecting renters who sign year-long leases, and suddenly are forced out of the home by a new home owner. In order to curb this problem, the Federal Government enacted the Protecting Tenants at Foreclosure Act of 2009 (“PTFA”). The PTFA provides protection to individuals with a “bona fide tenancy”, and requires a 90 day notice before evicting the tenant from the property. Protecting Tenants at Foreclosure Act of 2009 (Pub. L. No. 111-22, Div. A, Title VII, 123 Stat. 1632, 1660-62 (2009)). In addition, the PTFA provides that if the tenant has a “bona fide” lease, the tenant may be permitted to stay in the property for the term of the lease. Id. While the PTFA is a Federal Law protecting the tenants rights, it is important to note that state law is still in effect. Landlords and tenants must still abide by Florida Tenant and Landlord law and, for example, tenants are still required to pay rent timely and may be evicted for nonpayment.

Danielle can be reached at [email protected]

I am a Realtor and I have a buyer who is looking to change a few words in a contract. Is there any reason I shouldn’t make these changes for my client?

The field of real estate is riddled with risk and reward. Although Realtors have an increased knowledge of real estate and contract law, there have been many instances in which improper drafting of contracts leads to litigation, a damaged reputation, loss of commission, and in some cases, revocation of the individual’s license.

In a case before a Florida appeals court, a transaction broker assisted in drafting a contract for the purchase of real property.  The contract required the balance of payment at closing and in an addendum prepared by the broker, the following language appeared:

If buyer does not close by January 26th, 2005 the buyer is to pay seller 12% interest, which is to be paid monthly. Failure to do so makes this contract null and void, and all monies paid are nonrefundable.  Seller will only carry a mortgage for an additional six months from January 26th, 2005.  Therrien v. Larkins, 959 So. 2d 365 (Fla. 5th DCA 2007).

At closing, the buyer believed he had three options, one being that he could tender a note and mortgage as “payment” of the purchase price.  The lower court agreed and held that the seller needed to close the transaction.  However, the seller believed the contract was not intended to permit the buyer to purchase the property by offering a note and mortgage.  On appeal, the court agreed with the seller.  It held that because the contract did not grant the buyer a specific right to present a note and mortgage at closing, the seller was not obligated to close by accepting the note and mortgage.  (Id. at 367).

The court had this to say about the drafting:

…the contract and addendum in this case were drafted by a transactional broker on a FAR/BAR form.  This lawsuit is an excellent example of why lawyers, and not brokers, should draft contracts in complex real estate transactions. Had the broker suggested that an experienced real estate attorney draft the contract, he might now be enjoying the $22,500 commission called for in one of the less ambiguous clauses of the contract. (Id. at 369).

Real estate professionals commonly find themselves in precarious situations while trying to assist their clients.  To protect your real estate commissions and keep your reputation intact, work with a real estate attorney to draft or revise contract language.  This will limit the potential risks and allow you to reap the profession’s rewards.

A title company gave me gift cards for referring my closings to them. Can I get in trouble for this? Is this legal?

In Florida, a real estate licensee may not receive a referral fee/kickback (or anything of value) for referring buyers to a title company.  There are several national and state laws that prohibit such kickbacks and proscribe hefty civil and criminal penalties for violations.  One of the most prevalent laws is the Real Estate Settlement Procedures Act (RESPA) (codified at Title 12, Chapter 27 of the United States Code, 12 U.S.C. §§2601-2617).

RESPA was enacted in 1974 to provide consumers with disclosures about closing costs and to prohibit kickbacks and referral fees.  RESPA covers transactions involving federally related mortgage loans (e.g., home purchase loans, refinances, lender approved assumptions, property improvement loans, equity lines of credit, reverse mortgages).  Certain transactions are not covered under RESPA, including: cash sales; sales where the individual home seller takes back the mortgage; and rental property transactions.

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback, or anything of value in exchange for referrals of settlement service business.  A violation of this section can result in a civil or criminal case being filed against the real estate agent.  In a civil lawsuit, a person who violates Section 8 may be liable to the person charged for the settlement service in an amount equal to three times the amount of the charge paid for the service.  In a criminal case, a person who violates Section 8 may be fined up to $10,000 and imprisoned for up to one year.

Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale.  Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

In addition to the Federal penalties, Florida law may also penalize real estate agents under these circumstances.  Pursuant to section 475.05, Florida Statutes, the Florida Real Estate Commission has the power to create rules, enact bylaws, and decide questions of practice regarding real estate agents.  One of the regulations enacted by FREC, pertaining to kickbacks, is Fla. Admin. Code R. 61J2-10.028 (2012), which states:

Any real estate licensee who receives, or makes any arrangement or agreement to receive, directly or indirectly, any kickback or rebate, for the placement of, or favor in, any business transaction which forms a part of, or is incident to, any transaction(s) negotiated or handled by said licensee, is a violation of Section 475.25(1)(b) or (d), Florida Statutes…unless prior to the time of the placement of, or favor in, said business transaction, the licensee shall have fully advised the principal if any and all affected parties in the transaction(s), which the licensee is handling, of all facts pertaining to the arrangement of kickbacks or rebates.

A violation of this regulation may result in any one or all of the following punitive measures: license suspension or revocation; probation; a fine of up to $5,000.00 per offense; or reprimand.  §475.25, Fla. Stat. (2012).

Due to the increasing crackdown on questionable real estate practices (especially in the foreclosure arena), real estate licensees and title companies would be well-advised to follow these laws closely.  Otherwise, a $100.00 gift card could result in license revocation, or worse.