In its last spring session the Florida Legislature revised a law for inter-spousal transfers of homestead property. Section 201.02, Florida Statutes imposes documentary stamp tax on most conveyances between spouses if there is an underlying mortgage. So, in Florida, when you get married and want to transfer property (add your spouse’s name to your home), a documentary stamp tax or “real estate transfer fee” is applied to the unpaid balance of the mortgage. The Florida documentary stamp tax rate is $0.70 per $100 paid for the property, in all counties except Miami-Dade.
For example, if the husband owned the property prior to the marriage, then added his wife once married, and there was a mortgage balance of $400,000.00, the Department of Revenue would collect documentary stamp tax on half of the mortgage balance. In this example the taxes would be around $2,800.00.
Previously, there was an exemption for the conveyance of the marital home when the parties divorced and the property was transferred. However, there was no such exception if you wanted to add your spouse once married. In 2018, the Florida Legislature amended the statute providing an exception for inter-spousal conveyance of homestead property if the conveyance was completed within one year of marriage. While this was a good change, it only applied to parties that were getting married in the future, and as long as they conveyed the property within one year of the marriage. Continue reading →
Recently an editorial published in USA Today on June 13, 2019 (read here: tinyurl.com/y36lvwjp) basically viewed reverse mortgages as simply predatory lending designed to steal seniors’ and the heirs’ homes without any benefit or knowledge. As a board-certified real estate attorney and Florida HUD Commissioner who has seen and dealt with many reverse mortgage foreclosures, I do not agree with this perspective for a number of reasons explained below.
First, the editorial fails to clearly discuss several important facts:
Without the loans, many seniors would have been forced to sell the homes anyway, due to the inability to pay maintenance costs (such as major structural repairs, and roofs), existing loans (which may be burdensome), or taxes and insurance;
No one forced these seniors to take the loans and spend the money they received, even if spent frivolously;
A majority of foreclosures occur not due to defaults relating to non-payment of taxes or insurance, but due to either abandonment of the home (residing in the home is a condition of getting and keeping the loan) or death;
Claiming that the heirs lost out on getting the home due to the reverse mortgage is a false premise, because it presupposes that the heirs deserve the home even though their parents needed and got to enjoy the benefits of the reverse mortgage money; and
Many foreclosures occur simply because reverse mortgages were granted before the crash, and the monies given were based on a higher pre-crash value. Combined with the accrued interest over 10 to 15 years (a key to how these work, seniors pay nothing during the term of the loan), and all the costs of sale (as high as 8% for real estate commissions, taxes, transfer taxes and title insurance), there is little to no equity left to interest the heirs or the estate to consider selling the properties.
Each spring, the Florida legislature meets to debate and consider possible changes to Florida law. This year’s session was highlighted by a new Governor and the lawsuits surrounding smokable marijuana. A total of over 1800 bills were introduced and less than 200 were passed, a 20-year low for new legislation and a passage rate of only about 10 percent. New bills covered a wide gamut of issues, and will begin going into effect this July, including the new ban on texting while driving. There were also a number of bills related to real estate and business that included the following:
Utility Companies Storm Protection Plan
A new utilities bill requires public utility companies to prepare and submit storm protection plans to deal with future issues and provides a mechanism for cost recovery (Section 366.96, Florida Statutes).
State Highway Expansion
A bill contested by environmentalists but heavily supported by the Governor was the expansion of the state highways system to include (a) Southwest-Central Florida Connector, extending from Collier County to Polk County; (b) Suncoast Connector, extending from Citrus County to Jefferson County; and (c) Northern Turnpike Connector, extending from the northern terminus of the Florida Turnpike northwest to the Suncoast Parkway. (Section 338.2278, Florida Statutes).
Every buyer and seller understands what a purchase price and closing date are, but oftentimes, they are not sure which party pays the closing costs associated with the closing.
Who Pays for What?
In the most recent iteration of the commonly used residential form contract in Florida, also known as the “FR/Bar,” paragraph 9 lists out which default costs are the responsibility of the parties (unless negotiated otherwise).
For example, the party who pays for title insurance is often negotiable, and custom is often what dictates who pays for what. In Broward and Miami-Dade counties, the custom is that the buyer pays for the title insurance, while in most other counties throughout Florida, the seller does. Continue reading →
While there has been somewhat of a slowdown in real estate sales in 2018, the market remains hot. Some neighborhoods are in-demand commodities, garnering multiple competitive offers on homes that are priced properly. This is great news for sellers, but maybe not for buyers.
Buying a home in this market can be difficult due to issues such as rising mortgage interest rates, closing cost expenses, approval issues from homeowners and condominium associations, inspection and mold issues, and other matters that make purchasing a home more difficult than ever before. Because of this, buyers need to be proactively prepared before embarking on a house hunt so as to avoid the most difficult issues.
Below, we’ve listed some elements to keep in mind as you consider purchasing real estate.