4th of July Fireworks and Your HOA

By Dane Leitner

Floridians may now legally use fireworks during designated holidays.  On April 8, 2020 Governor DeSantis approved an amendment to Chapter 791 of the Florida Statutes dealing with the sale and use of fireworks.

Previously, Floridians seeking to buy fireworks would have to sign a form claiming that they met certain industrial or agricultural use exemptions to buy fireworks, for example to scare birds from fish hatcheries.  It seemed that twice a year, on Independence Day and New Year’s Eve, Florida was overcome with industrial and agricultural hardships which occurred at night and was remedied with a bombardment of fireworks.

The amendment to the Statute now provides an exemption and permits the use of fireworks during designated holidays, which include Independence Day, New Year’s Eve and New Year’s Day.

However, the Statute does not supersede any local governmental regulation relating to the use of fireworks.  Therefore, you will still need to check your local county/city/town regulations to ensure that the use of fireworks is permitted.

Reverse Mortgages: Helping or Hurting Seniors?

By Michael J Posner

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:

1. 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;
2. No one forced these seniors to take the loans and spend the money they received, even if spent frivolously;
3. 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;
4. 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
5. 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.

3 Easy Steps to Take Advantage of Your Homestead Exemption

By Michael J Posner

Over 300,000 new people became Florida residents in 2017, continuing a growth trend that shows no signs of slowing.  With the new tax act squeezing many residents of high tax states in the northeast, the trend of continued population growth in the sunshine state is only expected to rise in 2018.  Many new residents purchase new homes or convert their previous vacation or second homes in Florida into their primary residence.  If this purchase or conversion is completed by December 31, those new residents may be eligible to apply for a Florida Homestead Exemption the following year.

Florida has two types of homestead:

• The first is set forth in the Florida Constitution under Article X, Section 4, which is an automatic provision to protect homeowners from claims of creditors or spouses who exclusively hold title, and to insure that a surviving spouse is not made homeless. This protection is automatic based upon purchasing a house, condominium or cooperative and making it your primary residence.

• The second form of homestead is known as the Homestead Exemption, and it is also set forth in the Florida Constitution under Article VII, Section 6, which provides a financial exemption from real property taxation of up to $50,000 in home value. Additional exemptions are available for veterans over 65, low income senior citizens, surviving spouses of a veteran or first responder that died in the line of duty, and certain disabled persons.

What Real Estate Services Can a Realtor or Community Association Manager Provide? And When Do You Need A Lawyer?

By Michael J Posner, Esq.

Realtors and Community Association Managers provide valuable real estate services to sellers and buyers of real estate, as well as managing homeowners and condominium associations respectively.  However, in providing their respective services, they frequently have issues that have substantial legal ramifications and, in providing their advice and opinions, run the risk of being accused of the unlicensed practice of law.  Knowing what is permitted and what requires specific use of a licensed attorney is important for both realtors and Community Association Managers.

For realtors there is a substantial difference between drafting contracts and drafting leases. The Florida Supreme Court held in 1950 in the case of Keyes Co. v. Dade County Bar Association that the drafting of the real estate contract by a licensed realtor who was a party to the transaction did not constitute the unlicensed practice of law.  In 1992 the Supreme Court was asked if the drafting of a lease constituted the unlicensed practice of law and while the Supreme Court declined to specifically state so, they did adopt a formal lease which appears to restrict drafting of leases by realtors without legal counsel except by utilizing the Florida Supreme Court approved forms.

Aside from the right to draft contracts, realtors can cross the line when they modify preapproved forms adopted by the Florida Realtors Association or the Florida Bar.  In addition, the drafting of a substantive addendum to form contracts can also lead to a claim of unlicensed practice of law.  Realtors should err on the side of caution and avoid making any material, substantive changes to the form contract or an addendum unless aided by a licensed attorney.  Further, other than filling in the blanks on the Florida Supreme Court approved lease forms, realtors should not make any changes to the approved lease or utilize any other form lease unless done by a licensed attorney.