Monthly Archives: June 2022

RE Q&A: Revocable Trusts, Aging Parents, New Condos

Older adults are buying a condo in a 55-plus community. Their kids want to know what a revocable trust is – and whether it’s a good idea.

FORT LAUDERDALE, Fla. – Question: Our aging parents are buying a condo in an over-55 community. Someone recommended using a revocable trust for them. What is this, and is it a good idea? – Laura

Answer: A revocable or “living” trust can be an excellent way for your parents to own their new home. A trust is a contract where someone, the “grantor,” in this case your parents, transfers “legal” ownership to one or more “trustees” who are tasked to manage the property to benefit the “beneficiaries” who get to enjoy the property. Because the trust is revocable, the grantor can change the rules of the trust and name alternate trustees and beneficiaries.

Their revocable trust will serve several purposes. Its primary purpose is to control the disposition of property after they pass away. It is often used as an alternative to a will, and the property in the trust will not have to go through probate administration in the courts.

Trusts are more private because the terms of their estate plan are in a private trust agreement and do not usually need to be filed with the courts. The trust also allows a successor trustee to be appointed who can manage your parent’s financial affairs should they become incapacitated. This may avoid a guardianship proceeding at the courthouse.

A properly drafted revocable trust can save you and your family considerable time and money.

In the revocable trust you are considering, your parents would be the grantors who create the trust and the trustees who control the property for activities like signing a mortgage or working with contractors for needed repairs. In practical effect, the trustees act like the managers of the property.

Your parents would also be the initial beneficiaries and enjoy the property’s use. A significant benefit is that when a beneficiary (or a trustee) passes away, no court intervention or probate proceeding is needed to transfer the property to either the remaining owners or the heirs.

Because a revocable trust is a common estate planning tool, virtually all community associations are OK with properties being titled this way. To be on the safe side, you should contact the manager of this community to confirm this will not present an issue.

Copyright © South Florida Sun Sentinel, Gary M. Singer. All rights reserved.


Code Doesn’t Say What You Think It Says

Dear Shannon: A Realtor won’t work with potential buyers working with another Realtor – “Never have. Never will. It’s unethical.” But is this one of the high standards that the Code of Ethics requires?

Dear Shannon: I’m a seasoned Realtor. As Realtors, we must follow the Code of Ethics which requires us to hold ourselves to higher standards. That’s the whole point of being a Realtor.

I read your two previous articles, Must I Push and Probe for Representation Info? and Don’t Add Language to the Code of Ethics. These were great, but you missed something in the first article. When the potential buyers told the listing agent they were working with another Realtor, your article should have guided Realtors to walk away as required by the Code. Standard of Practice (SOP) 16-9 prohibits us from working with potential buyers who are working with another Realtor. Period.

I don’t want to be accused of interfering with another Realtor’s relationship with their potential buyer. I’m sure other Realtors don’t either. So, the moment we, as Realtors, find out that potential buyers are working with another Realtor, we should encourage them to go back to their Realtor and talk to their Realtor about what they want; and then we should walk away.

I hold myself to the high standards required by the Code and I expect other Realtors to do the same. It’s completely unethical and just bad business practice to do otherwise. Help me get other Realtors to hold themselves to these same high standards required by the Code. – High Standards

Dear High Standards: Thank you for reading my last two articles and for your feedback.

Yes, Realtors are bound by the Code of Ethics. It’s what sets Realtors apart. I’m thrilled to hear that this is a point of pride for you, and I love that you’re making every effort to hold yourself to high standards.

However, the Code requires different standards than the standards you appear to follow – and it is unreasonable to expect fellow Realtors to make the same choices you’ve made. Candidly, the Code doesn’t say what you think it says. I think you’ll see what I mean. Let’s look at the language of Article 16 and Standard of Practice (SOP) 16-9.

Article 16 says “Realtors® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other Realtors® have with clients. (Amended 1/04)

You said you don’t want to be accused of interfering with another Realtor’s relationship with their potential buyer, and so you do not to interfere with another Realtor’s relationship with a potential buyer, regardless of whether or not their relationship is exclusive.

Let’s think this through and look carefully at the language of Article 16. Notice it focuses on Realtors not taking any action inconsistent with “exclusive” representation or “exclusive” relationship agreements that other Realtors have with clients. It does not say what you think it says … that if potential buyers are working at all with another Realtor, then Realtors have to walk away.

Now let’s turn to Standard of Practice (SOP) 16-9 which says “Realtors®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04)

Again, not working with potential buyers just because they tell you they are working with another Realtor misses the obligation to find out if that relationship is “exclusive.” And, possibly, this means you might miss out on potential business.

Neither Article 16 nor SOP 16-9 has language saying Realtors have to walk away if they find out a potential buyer is working with another Realtor. In fact, if the potential buyers do not have an exclusive relationship with another Realtor, there is nothing in the Code that prohibits Realtors from working with them. You refuse to work with potential buyers entirely if they are working at all with another Realtor. That may be your business practice, but that is not something the Code requires.

Shannon Allen is an attorney and Florida Realtors Director of Local Association Services
Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®


The Problem with Promises and Handshakes?

A buyer and seller can always agree to change contract terms to get a transaction to closing. However, a handshake agreement generally won’t change the existing contract until it’s in writing and signed.

ORLANDO, Fla. – A buyer and seller can always agree to change contract terms to get a transaction to closing. However, a handshake agreement generally won’t change the existing contract until it’s in writing and signed.

In the case of DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So.3d 85 (2013), a buyer and seller were at the end of the inspection period. According to the executed contract, if the buyer terminated during the inspection period, the buyer would be entitled to a return of the deposit.

There was an unresolved issue regarding local government approval of a project, so the seller verbally promised to extend the inspection period while both parties sought approval. After the approval didn’t materialize, the buyer attempted to cancel the contract and get the deposit back. The buyer argued that the promise to extend the inspection period was clear and witnessed by multiple people.

The seller, however, argued that the agreement to extend the inspection period was not enforceable due to Florida’s Statute of Frauds. This centuries-old rule requires that contracts for purchase and sale of real property (and certain other types of contract) be in writing and have proper signature(s) before they become enforceable. The Florida Supreme Court agreed with seller’s argument and held that promissory estoppel does not act as an exception to the Statute of Frauds.

Takeaways for Buyers, Sellers, Realtors

  1. When it comes to contracts for sale and purchase of real property, parties should always ensure their contracts and amendments are in writing and signed.
  2. Parties shouldn’t get ahead of themselves while negotiating contracts or amendments.

    We regularly hear from members who feel cheated when promising negotiations don’t lead to a signed contract or amendment. There’s not much to say beyond discussing the Statute of Frauds. Even if a buyer and seller verbally agree to every single point of negotiation and shake hands, if one of them won’t sign a written document, there’s not much the other side can do.

    The reason for refusing to sign is irrelevant. It doesn’t matter if someone changed their mind about signing due to a family emergency or just realized they’d be financially better off. Either way, promising negotiations aren’t binding until the parties cross that finish line of signing a document.

  3. Parties should always orient themselves on the signed contract they have until they have a fully executed amendment. If a party misses a deadline, as in the case above, that party could be penalized even though they were in the process of negotiating an amendment.  

As a final note, please remember that the Statute of Frauds only applies to specific types of contracts, such as purchase and sale contracts. Many common contracts are enforceable despite their verbal nature. That said, parties would be well advised to get most agreements in writing to avoid confusion and fights over how each side remembered specific terms.

Joel Maxson is Associate General Counsel for Florida Realtors
Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®


Protect Your Website From Copyright Claims

Realtors who “always do the right thing” may still find themselves legally accused of a copyright violation – often a photo on their website, and sometimes one that was automatically uploaded by their IDX feed.

WASHINGTON – A growing number of Realtors and brokers find themselves facing a copyright claim, and many of those accusations end in a judgment against the agent or brokerage.

Your website or business materials may put you at greater risk for litigation than you think.

You could be held liable for copyright infringement even for photos you didn’t personally choose, such as ones provided by a third party to your MLS that then appear on your website via an IDX display, says Chloe Hecht, senior counsel at the National Association of Realtors® (NAR).

Putting a risk management strategy in place can help protect you and your business, Hecht says in a NAR’s recent “Window to the Law” video.

The Digital Millennium Copyright Act (DMCA), which passed in 1998, may offer some protections when posting third-party content – but it’s not a foolproof defense. The DMCA is a federal law that provides a “safe harbor” to avoid some copyright infringement claims, but certain procedures must be met.

Hecht highlights some of those steps in the video, including:

  • Designate a copyright agent. This person will be responsible for receiving any takedown notices in case of copyright claims and will need to be listed as a contact and copyright owner on your website, along with their contact information. Also, register the copyright agent with the Copyright Office.
  • Comply with the DMCA’s takedown procedure. After receiving any takedown notice due to a copyright allegation, promptly remove the content in question. Then, notify the person filing the complaint of its removal. “If the alleged infringer submits a counternotice, provide a copy of that counternotice to the copyright owner and state that the allegedly infringing content will be restored in 10 business days unless the copyright owner initiates a lawsuit,” Hecht says in the video. “Absent such a lawsuit, you may restore the content to your website.”
  • Include a notice at your site. Inform website users of your copyright policy and include it within your website’s terms of use. View an example under the “Digital Millennium Copyright Act (DMCA)” section at nar.realtor/terms-of-use. Also, view the “Termination” section, which informs website users of enforcement for terminating repeat infringers.

You can find additional copyright resources at nar.realtor/copyright.

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Communicate Your Unique Service Proposition

How are you different? Why should I work with you rather than any of those 10 other agents? Before a first meeting, give clients an idea of what they should expect.

NEW YORK – Your unique service proposition answer a customer’s most basic question: Why should I choose to work with you?

Tom Toole, founder and team leader at Tom Toole Sales Group, says prior to meeting with clients, he sends them a video and pre-appointment email. It’s a reminder of the upcoming consultation and it gives them an idea of what to expect. It also gives him a chance to discover more about the situation of both prospective buyers and sellers and possibly solve potential problems.

Toole says every agent should have at least five elevator pitches that can be referenced during consultations. The pitch topics may include:

  • Why clients should meet with you and your team
  • What makes your team’s services different?
  • What is the name of a reliable inspector or lender?
  • How the team can facilitate the buying or selling process

To communicate their unique service proposition, agents should have a story they can tell that highlights a problem faced by someone else, ideally one that includes facts and data. Next, the agent should discuss a solution and share a call to action.

Agents also must offer exemplary service. Rather than referring a lender via email, for example they could host a phone call for all three parties.

The leading reason clients leave an agent? They’re not aware that the agent can help solve their problem.

Source: Inman (05/26/22) Toole, Tom

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Judge OKs $1B+ Deal in Fla. Condo Collapse

A judge gave final approval for the Surfside-condo collapse settlement a day before its June 24 anniversary. Families who lost loved ones will collect the most money.

MIAMI (AP) – A judge gave final approval Thursday to a settlement topping $1 billion for victims of the collapse of a Florida beachfront condominium building that killed 98 people, one of the deadliest building failures in U.S. history.

The decision by Miami-Dade Circuit Judge Michael Hanzman came a day before the one-year anniversary of the Champlain Towers South disaster in the Miami suburb of Surfside. The judge praised the dozens of lawyers involved for averting what could have been years of litigation with no sure outcome.

“It will never be enough to compensate them for the tragic loss they have suffered,” the judge said. “This settlement is the best we can do. It’s a remarkable result. It is extraordinary.”

The bulk of the $1.02 billion total will go to people who lost family members in the collapse of the 12-story building. About $100 million is earmarked for legal fees, and $96 million set aside for owners who lost one of the 136 units in the building.

No victims filed objections to the settlement or decided to opt out, said court-appointed receiver Michael Goldberg. Several people who lost family members or property said in court Thursday that they are grateful for such a swift conclusion to a horrific experience.

Raysa Rodriguez, who survived the collapse in a ninth-floor unit that was initially left intact, had nothing but praise for the outcome.

“You have no idea what a relief this is to me personally,” Rodriguez said. “I am so exhausted. I just want this to be done. I want these souls to rest.”

The ruling came during what’s called a fairness hearing, in which anyone with objections to the deal could raise them as the judge determined whether the settlement is “fair, reasonable and adequate,” according to court documents.

The money comes from several sources, including insurance companies, engineering firms and a luxury condominium whose recent construction next door is suspected of contributing to structural damage of Champlain Towers South. None of the parties admit any wrongdoing.

A billionaire developer from Dubai is set to purchase the 1.8-acre (1-hectare) beachside site for $120 million, contributing to the settlement.

Champlain Towers South had a long history of maintenance problems and questions have been raised about the quality of its original construction and inspections in the early 1980s. Other possible factors include sea level rise caused by climate change and damage caused by saltwater intrusion.

A final conclusion on the cause is likely years away. The National Institute of Standards and Technology, which is leading the federal probe into the collapse, recently said invasive testing will begin soon on samples of material from the collapse site.

The tests will help investigators find potential flaws in structural elements of the building by looking into things such as density of the materials, how porous they were and if there was corrosion, NIST said.

Florida will require statewide recertification of condominiums more than three stories tall under new legislation Republican Gov. Ron DeSantis signed into law last month in response to the disaster.

The death toll in the Champlain Towers collapse ranks among the highest in U.S. history among similar disasters. The 1981 Hyatt Regency walkway collapse killed 114 people and a Massachusetts mill disaster in 1860 killed between 88 and 145 workers.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. Anderson contributed to this story from St. Petersburg, Fla.


Praise for Condo Inspection Laws, Fear of Timelines

WEST PALM BEACH, Fla. – The high-rise condos that dot the 47 miles of shoreline of Palm Beach County still stand tall overlooking the Atlantic Ocean and are a symbol of South Florida’s allure, but just how safe are they?

The question should be answered within the next two and a half years. That is when safety inspections of the buildings are expected to be completed – a result of the action taken following the tragedy that took place some 40 miles to the south 12 months ago.

A year ago Friday, Champlain Towers South, a 12-story beachside condo building in Surfside, collapsed, killing 98 people. The tragedy pushed the Legislature and Gov. Ron DeSantis to recently adopt a law designed to ensure the structural integrity of high-rise residential buildings in Florida by requiring aging complexes to be inspected by licensed engineers and architects.

Senate Bill 4-D requires “milestone” or initial inspections to be completed by Dec. 31, 2024.

In Palm Beach County alone, there are 2,317 residential buildings that need inspections under the new law; 816 are in unincorporated areas that fall under the jurisdiction of county government, according to County Building Official Doug Wise.

Concerns have been raised about whether the Dec. 31, 2024, deadline is realistic.

Joshua Gerstin of Boca Raton, a land-use lawyer who represents several Palm Beach County associations affected by the new law, believes more time will be needed. He said a Florida Bar task force report estimates there are nearly 30,000 condo associations in the state, and most of them are older than 30 years.

“There is not enough architects and engineers to do all this work,” he said.

Can all the regulation deadlines be met?

Overall, Gerstin said the law is something that was needed, adding: “Buyers will know they are buying into a building that is safe and people who live there will know they are in a building that is being well maintained. There may be some pain in the short term, but in the long term, it will be very positive.”

Patrick Savage, a board member at Boca Inlet Apartments (a condo building), welcomes the new law. Boca Inlet Apartments, a 12-story, 100-unit building, was built in 1965, and is one of the oldest on the intracoastal in Boca Raton. The association expects to soon spend about $300,000 to replace a roof over the carport.

“We stay ahead of the game. We are in great shape. Just about everything the law requires, we are already doing.”

Keith Ruehl of Global Solution Partners, whose firm does reserve studies for scores of condo associations in Florida, agreed with Gerstin that it may be difficult to meet the deadline. But he noted he expects engineers and architects from outside the state to help fill the void.

The state Department of Business and Professional Regulation is overseeing enforcement. A spokesman told The Post that there is nothing in the law that would permit the agency to “extend statutory deadlines.”

Any condominium and co-op building three stories or more must have a “milestone inspection” at 30 years, or at 25 years if within 3 miles of the coastline, with updates every 10 years thereafter. The milestone inspections will determine if a more thorough inspection is necessary. The reports must state whether “unsafe or dangerous conditions” exist.

The report is expected to list the repairs needed to ensure the structural integrity of buildings. Cost estimates must also be provided. Elevators, roofs, load-bearing walls, floors, foundations, fire protection systems, plumbing, electrical systems and windows are among the elements to be inspected.

The board at Champlain Towers knew in 2018 that the building had serious structural problems, yet no action was taken to fix them. By the time the building collapsed, needed repairs were estimated to be as much as $18 million.

“The longer you defer, the bigger the bill,” said Allen Douglas, executive director of the Florida Engineering Society.

Can communities afford the repairs?

One concern is the impact on a complex whose owners live on fixed incomes. Ruehl envisions some communities unable to raise the money to fund repairs. He faulted the Legislature for not providing some assistance to such communities either through grants or low-interest loans.

Some associations may be forced to resort to what is called “legal termination” where a developer buys out unit owners to make way for new construction.

Boca Raton and Highland Beach were among the first towns in Florida to adopt their own programs after the Surfside collapse. Others have been waiting for the state to act. Boca Raton spokeswoman Ileana Olmstead said it appears that adjustments will be needed to ensure that the city’s program is consistent with the new state law. Boca Raton has already identified 191 properties that will need to be inspected. It requires that commercial buildings be inspected as well; the state law applies only to residential.

In Highland Beach, inspections are to be done every seven years for buildings older than 40 years. Mayor Doug Hillman said the town does not expect to change those figures to match the state program. He noted that the town has the right to have a stricter program than the state’s.

At the county level, Palm Beach County Building Official Doug Wise said county commissioners will have to decide whether to include two-story buildings. The Post recently reported that a load bearing wall was removed from a two-story condo building at Century Village west of West Palm Beach, forcing the county to order the upstairs and downstairs units to be evacuated until repairs are made. The county is considering ordering the entire 24-unit building be demolished if repairs are not made soon.

Wise said it would be costly to include two-story buildings, but he is concerned how often load-bearing walls have been removed. He said after The Post article was published, his office received other complaints related to the removal of load-bearing walls without permits. His office is currently investigating them.

Will Palm Beach County adopt its own law?

Wise is expected to appear before county commissioners on Aug. 23 to discuss whether the county should adopt its own law. Riviera Beach is not expected to do so, according to the city’s building official, Michael Grimm.

The Palm Beach County League of Cities is sponsoring a forum to discuss the new law on July 18. County and municipal officials are expected to attend the session to determine what the next steps should be.

Meanwhile, several condo associations said they welcome the new law.

Devin Wardell, property manager at 750 Ocean in Boca Raton, said his board has taken steps to ensure the structural integrity of the 16-story building that was built in 1968. The garage ceiling was recently renovated and the concrete on its balconies will soon be repaired.

Lou Pietosi, the president of the homeowners’ association at Ocean Bluffs South in Jupiter, said the complex is finishing a balcony replacement project it began planning for in 2018 – before the tragic collapse in Surfside. That project cost each owner about $40,000, he said.

“We’re fortunate that we’ve had a structural engineer on site for the past three years inspecting the project as it progressed,” Pietosi said, noting that the inspections have helped to determine what future repairs should be made.

A Surfside-type collapse could very well have occurred this year in Tequesta. Residents of 24 waterfront condominiums along the waterfront were evacuated in late March after the village’s fire chief discovered cracks and deterioration in the building’s supporting columns.

Mike Diamond is a journalist at the Palm Beach Post, part of the USA TODAY Florida Network. He covers county government and transportation. You can reach him at mdiamond@pbpost.com.

Copyright © 2022 Palm Beach Newspapers, Inc. Palm Beach Post Staff Writers Wayne Washington and Katherine Kokal contributed to this report.


Affordability Crisis: NAR Explains It to Lawmakers

Homeownership builds generational wealth, and NAR laid out potential long-term consequences if lower- and middle-class buyers no longer qualify.

WASHINGTON – National Association of Realtors® (NAR) leaders made a case before members of Congress and their staff Tuesday, explaining that housing affordability is rapidly deteriorating and action is needed to keep homes financially accessible to buyers.

In a virtual briefing, NAR President Leslie Rouda Smith told congressional leaders that for too many Americans, the cost of buying a home remains a barrier to property ownership – a primary pathway to generational wealth-building.

“Enabling more households to achieve and maintain homeownership is crucial to narrowing racial wealth gaps,” Rouda Smith said. “But with rising mortgage rates and a persistent shortage of affordable homes, homeownership opportunities are limited for many middle-class, first-time and first-generation homebuyers.”

Three forces driving the housing market

Jessica Lautz, NAR’s vice president of demographics and behavioral insights, said that inflation, rising mortgage rates and inventory are driving changes in the housing market.

“For a $300,000 mortgage – one that the typical first-time homebuyer would probably feel pretty comfortable entering into – we know that their monthly payment has jumped to $1,800 from $1,300 just at the beginning of the year. That is quite a jump,” Lautz said. “It means there are a lot of people who are going to say, ‘I cannot afford to enter the housing market.’”

NAR data finds that inventory remains stubbornly low.

“Even with this rise in mortgage rates, even with fewer buyers coming into the market, we still have seen nearly a 15% year-over-year home price increase. We are seeing this in nearly every major city across the country,” Lautz said. “We are seeing this in places where we haven’t seen it before. We are talking about 123 straight months of year-over-year home price gains.”

Lautz said she expects that, home sales will return to pre-pandemic levels as the market cools, but lingering supply issues mean home prices will remain elevated.

NAR’s 2021 report, “Housing Is Critical Infrastructure,” showed an underbuilding gap of 5.5 million units – a gap so large it would take more than a decade to correct. NAR advocates an all-of-the-above approach to closing the supply gap, including zoning reform, money for new construction, increased labor and tax incentives to convert unused commercial space to residential.

Racial ownership divide worsens during pandemic

The briefing also gave Capitol Hill policymakers a snapshot of how the racial homeownership divide grew deeper during the pandemic. Lautz presented NAR data showing that the homeownership rate for White Americans today is more than 72%, while it’s just 43% for Black Americans.

“That gap is as wide today as when the Fair Housing Act began back in 1968,” Lautz said.

Student loan debt is especially burdensome to Black homebuyers, according to NAR’s analysis.

“Forty-one percent of [recent] Black home buyers had student loan debt; that is higher than any other race,” Lautz said. “And if you are a first-time homebuyer, you don’t have equity from that previous home.” NAR data shows that 38% of recent white homebuyers were able use past home equity to help finance a down payment. In comparison, only 21% of Blacks, 25% of Hispanics and 16% of Asians could do so.

Millennials command the housing market

Millennials, now the biggest generation in America, are “impacting everything we do,” Lautz told lawmakers. “And it is one of the reasons why we are missing 5.5 million units in the U.S.”

About 32 million young adults are nearing their peak homebuying age. They’re spending less on transportation than past generations did at their age, but they’re spending more on housing and education. “Sixty percent of millennials who are not homeowners today are saying that student loan debt is one of the biggest hurdles delaying them from purchasing a home,” Lautz said.

The other significant shift in the data is a drop in U.S. birth rates.

The segment of homebuyers with a child under the age of 18 dropped from a share of 58% in 1985 to just 31% today.

“We are absolutely seeing that reflection in the data on homebuyers,” Lautz said. “It is going to shift a few factors: You need a smaller home if you don’t have a growing family, and the other big factor is where that home is.” Households without kids may cast a wider net in their home search, seeking more affordable options, rather than limiting their search based on school districts.

Source: National Association of Realtors® (NAR)

© 2022 Florida Realtors®


You Need to Tell Vets About VA Loans

Many current and previous armed forces members know little about VA loan benefits: 17% think they need 20% down; half think it’s a once-in-your-lifetime offer.

WASHINGTON – Many service members know little about the benefits mortgages available through a program of the U.S. Department of Veterans Affairs (VA) or may even hold negative views about them, according to a Spotlight on VA Loans report commissioned by Navy Federal Credit Union and Operation Homefront. The survey was based on responses from about 1,000 active-duty service members and veterans nationwide.

Nearly half of active-duty respondents believe VA loans have higher interest rates than conventional loans – which they don’t. Seventeen percent of veterans and 45% of active-duty soldiers believe the need a down payment of more than 20% for a VA loan.

In reality, VA loans offer vets and military service members a chance to buy a home with 0% down.

Bob Goldberg, CEO of the National Association of Realtors® (NAR), pinned a recent editorial at The American Genius that documents how VA loans help vets achieve homeownership quicker than they imagined. He shared the story of an honorably discharged vet in 2006. After knee and back injuries, he learned of options that sped up homeownership after his agent connected him to a lender that specialized in helping military homebuyers. The vet learned that he qualified for the VA Home Loan Guaranty Program, which offers a 0% down payment, and that it would cover high housing costs in his area of Washington, D.C. He also learned that his VA loan would not require private mortgage insurance because of his service-related disability. He and his wife purchased a home much sooner than they thought possible.

Real estate pros can play a big role in helping military members and veterans achieve homeownership by sharing information about the VA Home Loan Guaranty Program and dispelling some of those common myths. To help with that, NAR and the Department of Veterans Affairs released a joint two-part video series earlier this year that examines misconceptions about the program, as well as its advantages.

NAR has served as a strong advocate for VA loans. At the end of 2021, NAR President Leslie Rouda Smith testified before Congress about the importance of strengthening the VA Home Loan Guaranty Program, including citing benefits for borrowers and the program’s role in closing the racial homeownership gap. She noted that VA loan delinquency rates tend to be lower than FHA loans and comparable to conventional loans.

Some Realtors who want to expand their work with military members and vets have pursued a Military Relocation Professional (MRP) certification. The program educates NAR members on helping military homebuyers, including connecting them to financing resources and learning how vets can take advantage of the benefits available to them.

“As we honor their immense sacrifices, we also look for ways to better recognize and repay the men and women who have survived the horrors of combat and returned home to live out the ideals they risked everything to protect,” Goldberg writes for The American Genius. “Because when they do return, access to a safe, comfortable home should never be in question.”

Source: National Association of Realtors® (NAR)

© 2022 Florida Realtors®


Mortgage Rates Edge Higher This Week, Hit 5.81%

Last week, the rate increase hit a 35-year high, but this week’s 5.81% is only marginally higher than last week’s average 5.78%.

WASHINGTON (AP) – Average long-term U.S. mortgage rates inched up this week following last week’s mammoth jump, the biggest in 35 years.

Mortgage buyer Freddie Mac reported Thursday that the 30-year rate ticked up to 5.81% this week, from last week’s 5.78%. Last week’s average – which jumped more than a half-point from the previous week – was the highest since November of 2008 during the housing crisis. One year ago, the average 30-year rate was 3.02%.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 4.92% from 4.81% last week. A year ago, the rate was 2.34%.

Last week, the Federal Reserve raised its benchmark rate by three-quarters of a point, the biggest single hike since 1994.

The Fed’s unusually large rate hike came after government data showed U.S. inflation rose in May to a four-decade high of 8.6%. The Fed’s benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5% to 1.75% – and Fed policymakers forecast a doubling of that range by year’s end.

Higher borrowing rates appear to be slowing the housing market, an important pillar of the economy.

Sales of previously occupied U.S. homes slowed for the fourth consecutive month in May as climbing mortgage rates and record high prices discouraged house hunters. Existing home sales fell 3.4% last month from April to a seasonally adjusted annual rate of 5.41 million, the National Association of Realtors® (NAR) said Tuesday.

Even as home sales slowed, home prices kept climbing in May. The national median home price jumped 14.8% in May from a year earlier to $407,600. That’s an all-time high according to data going back to 1999, NAR said.

The brisk jump in rates, along with a sharp increase in home prices, has been pushing potential homebuyers out of the market. Mortgage applications are down more than 10% from last year and refinancings are off 77%, according to the Mortgage Bankers Association.

Those figures are likely to worsen with more Fed rate increases a near certainty and layoffs in the housing sector have already begun. So far this month, the online real estate broker Redfin said it was laying off 8% of its workers and Compass said it was letting go of 450 employees.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Next Rate Hike? Fed to Decide ‘Meeting by Meeting’

WASHINGTON (AP) – Federal Reserve Chair Jerome Powell on Wednesday underscored the Fed’s determination to raise interest rates high enough to slow inflation, a commitment that has fanned concerns that the central bank’s fight against surging prices could tip the economy into recession.

Powell also said the pace of future rate hikes will depend on whether – and how quickly – inflation starts to decline, something the Fed will assess on a “meeting by meeting” basis.

Its decision-making will be based on “the incoming data and the evolving outlook for the economy,” Powell said to the Senate Banking Committee, which he is addressing as part of the Fed’s semiannual policy report to Congress.

The Fed’s accelerating pace of rate increases – it started with a quarter-point hike in its key short-term rate in March, then a half-point increase in May, then three-quarters of a point last week – has alarmed investors and led to sharp declines in the financial markets.

Powell’s testimony Wednesday comes exactly a week after the Fed announced its three-quarters-of-a-point increase, its biggest hike in nearly three decades, to a range of 1.5% to 1.75%. With inflation at a 40-year high, the Fed’s policymakers also forecast a more accelerated pace of rate hikes this year and next than they had predicted three months ago, with its key rate reaching 3.8% by the end of 2023. That would be its highest level in 15 years.

Concerns are growing that the Fed will end up tightening credit so much as to cause a recession. This week, Goldman Sachs estimated the likelihood of a recession at 30% over the next year and at 48% over the next two years.

A senior Republican on the Banking Committee, Sen. Thom Tillis of North Carolina, on Wednesday accused Powell of having taken too long to raise rates, saying the Fed’s hikes “are long overdue” and that its benchmark short-term rate should go much higher.

“The Fed has largely boxed itself into a menu of purely reactive policy measures,” Tillis said.

Tillis, like many Republicans, also blamed President Joe Biden’s $1.9 trillion financial stimulus package, approved in March 2021, for being excessively large and exacerbating inflation. Many economists agree that the additional spending contributed to rising prices by magnifying demand even while supply chains were snarled by COVID-related shutdowns and labor shortages were driving up wages. Inflation pressures were further worsened by Russia’s invasion of Ukraine.

Biden is expected on Wednesday to call on Congress to suspend U.S. gas and diesel taxes to reduce the sting of high fuel prices, which are averaging nearly $5 a gallon. Many economists are skeptical that consumers will see the full benefit of a tax holiday on the 18.4 cent-per-gallon gas tax.

Inflation has emerged as a leading concern of voters in the months before Congress’ midterm elections, weakening Biden’s approval ratings and raising the likelihood of Democratic losses in November. While taking some steps to try to ease the burden of inflation, the president has stressed his belief that the ability to curb inflation rests mainly with the Fed.

At Wednesday’s hearing, Sen. Elizabeth Warren, a Democrat from Massachusetts, challenged Powell’s rate hike plans and asked whether they would reduce gas or food prices, some of the highest-profile drivers of inflation. Powell acknowledged that they wouldn’t.

Warren said that Biden’s efforts to fight inflation, such as trying to clear clogged supply chains and increasing the use of antitrust rules to break up monopolies, would more effectively fight higher prices.

Fed rate hikes, though, can only slow demand, which will raise unemployment and weaken growth, Warren said.

“You know what’s worse than high inflation with low unemployment?” she asked. “High inflation and a recession with millions of people out of work.”

“I hope you consider that before you drive the U.S. economy off a cliff,” Warren added.

At a news conference last week, Powell suggested that a rate hike of either one-half or three-quarters of a point will be considered at the Fed’s next meeting in late July. Either one would exceed the quarter-point Fed hikes that have been typical in the past, and they reflect the central bank’s struggle to curb high inflation as quickly as possible.

Anticipating additional large rate hikes ahead, investors have sent Treasury yields sharply higher, making borrowing costs for home purchases, in particular, more expensive. With the average 30-year fixed mortgage rate up to roughly 5.8% – nearly twice the rate just a year ago — home sales have weakened. Credit card users and auto are also being hit with higher borrowing costs.

Fed officials hope that such changes will help achieve their goals of cooling demand enough to slow the economy and moderate price increases. In his testimony, Powell said the higher interest rates “should continue to temper growth and help bring demand into better balance with supply.”

The Fed’s aggressive pace of rate hikes has intensified fear that it will overly stifle business and consumer borrowing. But in projections they issued last week, Fed officials forecast that while the economy will slow sharply this year and next, it will continue to grow. They also projected, though, that the unemployment rate will rise a half-percentage point by 2024, an increase that economists say could lead to a recession.

Powell reiterated his view Wednesday that the U.S. economy “is very strong and well-positioned” to withstand higher rates. Yet with inflation causing hardships for millions of American households, he has stressed that moderating price spikes by raising rates is the Fed’s top priority.

On Wednesday, the Fed chair said the central bank’s policymakers “will be looking for compelling evidence that inflation is moving down” over the coming months before they would ease their pace of rate hikes. In a policy report to Congress it submitted late last week, the Fed said its commitment to fighting inflation is “unconditional.”

For now, most analysts expect a second three-quarter-point rate hike late next month and at least a half-point rate increase when the Fed meets again in September.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Facebook Changing Algorithm for Housing Ads

The U.S. challenged Facebook’s “algorithmic discrimination.” Ads can no longer target recipients by age, gender or zip code in a case DOJ called “groundbreaking.”

NEW YORK (AP) – Facebook will change its algorithms to prevent discriminatory housing advertising and its parent company will subject itself to court oversight to settle a lawsuit brought by the U.S. Department of Justice on Tuesday.

In a release, U.S. government officials said it had reached agreement with Meta Platforms Inc., formerly known as Facebook Inc., to settle the lawsuit filed simultaneously in Manhattan federal court.

According to the release, it was the Justice Department’s first case challenging algorithmic discrimination under the Fair Housing Act. Facebook will now be subject to Justice Department approval and court oversight for its ad targeting and delivery system.

U.S. Attorney Damian Williams called the lawsuit “groundbreaking.” Assistant Attorney General Kristen Clarke called it “historic.”

Ashley Settle, a Facebook spokesperson, said in an email that the company was “building a novel machine learning method without our ads system that will change the way housing ads are delivered to people residing in the U.S. across different demographic groups.”

She said the company would extend its new method for ads related to employment and credit in the U.S.

“We are excited to pioneer this effort,” Settle added in an email.

Williams said Facebook’s technology has in the past violated the Fair Housing Act online “just as when companies engage in discriminatory advertising using more traditional advertising methods.”

Clarke said, “companies like Meta have a responsibility to ensure their algorithmic tools are not used in a discriminatory manner.”

Settlement terms

According to terms of the settlement, Facebook will stop using an advertising tool for housing ads that the government said employed a discriminatory algorithm to locate users who “look like” other users based on characteristics protected by the Fair Housing Act, the Justice Department said. By Dec. 31, Facebook must stop using the tool once called “Lookalike Audience,” which relies on an algorithm that the U.S. said discriminates on the basis of race, sex and other characteristics.

Facebook also will develop a new system over the next half-year to address racial and other disparities caused by its use of personalization algorithms in its delivery system for housing ads, it said.

If the new system is inadequate, the settlement agreement can be terminated, the Justice Department said. Per the settlement, Meta also must pay a penalty of just over $115,000.

The announcement comes after Facebook already agreed in March 2019 to overhaul its ad-targeting systems to prevent discrimination in housing, credit and employment ads as part of a legal settlement with a group including the American Civil Liberties Union, the National Fair Housing Alliance and others.

The changes announced then were designed so that advertisers who wanted to run housing, employment or credit ads would no longer be allowed to target people by age, gender or zip code.

The Justice Department said Tuesday that the 2019 settlement reduced the potentially discriminatory targeting options available to advertisers but failed to resolve other problems, including Facebook’s discriminatory delivery of housing ads through machine-learning algorithms.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Condo Q&A: Can Owners Install Video Doorbells?

In most condos, the outside area by a front door is a common element than owners can’t change without permission. But boards should be flexible on this one.

STUART, Fla. – Question: Can an owner install a security camera to monitor his or her unit front door entrance area in a condo complex, and can the board approve this as an agenda item? – C.P., Boca Raton

Answer: It depends on the governing documents for the condominium. Typically, the exterior of the front door and entrance area is a Common Element as opposed to be part of the unit. Generally, an owner has no right to modify the Common Elements without the approval of the board. Most governing documents have a provision that does allow such improvements with board approval and providing that the owner is responsible for the maintenance of the item.

If the documents contain such authority, then the answer is yes, the board could allow this. However, allowing owners to make improvements to the Common Elements is generally not a good idea.

Video doorbells are becoming so popular I generally recommend the board adopt a policy allowing them with certain type, size and location restrictions rather than try to swim against the tide of their popularity.

Question: Our association has an owner in the community that lists himself as a “consultant” and the Association pays him a consulting fee. For the fee the person does things such as prepares meeting notices, prepares the budget, writes violation letters, prepares liens, prepares estoppel letters, files the corporate annual report, makes bank deposits and interfaces and hires other vendors who do work on the common areas.

I checked with the state and the person does not have community association management license. The person says he does not need a license, as he is a homeowner that lives in the community, and we are “self-managing.” Is this legal? – Unknown, Treasure Coast

Answer: No. Section 468.431(2), Florida Statutes defines “community association management as any of the following practices … when done for remuneration and when the association or associations served contain more than 10 units or have an annual budget or budgets in excess of $100,000.”

The statute goes on to list the following activities as constituting management: controlling or disbursing funds of a community association, preparing budgets or other financial documents for a community association, assisting in the noticing or conduct of community association meetings, determining the number of days required for statutory notices, determining amounts due to the association, collecting amounts due to the association before the filing of a civil action, calculating the votes required for a quorum or to approve a proposition or amendment, completing forms related to the management of a community association, drafting meeting notices and agendas, calculating and preparing certificates of assessment and estoppel certificates, negotiating monetary or performance terms of a contract subject to approval by an association, drafting pre-arbitration demands, coordinating or performing maintenance for real or personal property and other related routine services involved in the operation of a community association.

Section 468.432, Florida Statutes provides that a person shall not manage an association without a license.

So, if your community contains more than 10 lots or units or has a budget in excess of $100,000, then based on your description of his activities and because he is being paid, he must have a community association management license.

If the consultant was not being paid, then he would not need a license. The fact that he claims to be self-managing does not change the fact that he is being paid to perform management services and therefore needs a license. Also, as an aside, the preparation of a lien for the Association is considered the practice of law, so unless the consultant is a currently licensed Florida attorney, he is practicing law without a license.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2022 Journal Media Group. Richard D. DeBoest, Esq., is a Partner of the Law Firm Goede, DeBoest & Cross.


1Q Home Flipping: Numbers Up, Profits Down

Home flips vary by metro, but they’ve grown as a percentage of sales (9.6%) for five straight quarters – but profit margins dipped to their lowest point since 2009.

IRVINE, Calif. – June 23, 2022 – Attom’s first-quarter (1Q) 2022 U.S. Home Flipping Report finds that, as a percentage of sales, home flips have increased in all of the last five quarters, but profit margins have been dropping for the past six quarters.

In the first quarter, Attom found 114,706 single-family houses and condominiums in the United States flipped, or one in 10 transactions (9.6%). It’s the highest level since at least 2000 and an increase from 6.9% in the fourth quarter of 2021 and 4.9% one year earlier.

However, profit margins dipped to their lowest point since 2009.

“The good news for fix-and-flip investors is that demand remains strong from prospective homebuyers, as evidenced by this quarter’s report, which shows that one of every 10 homes sold during Q1 was a flip,” says Rick Sharga, executive vice president of market intelligence for Attom.

“The bad news is that rising mortgage interest rates are beginning to slow down home price appreciation rates, and buyers have become more selective – and less willing to outbid other buyers for properties they’re interested in. This is having a predictable impact on profit margins for investors.”

Among all flips nationwide, the gross profit on typical transactions – the difference between the median purchase price paid by investors and the median resale price – stood at $67,000 in the first quarter of 2022. While that’s up 5.5% from $63,500 in the fourth quarter of 2021, the first increase since late 2020, it was 4.3% less than the $70,000 level recorded in the first quarter of 2021.

Profit margins, meanwhile, fell for the sixth quarter in a row. The typical gross profit translated into just a 25.8% return on investment (ROI). That’s down from 27.3% in the fourth quarter of 2021 and 38.9% one year earlier, and it’s the lowest point since the first quarter of 2009. The peak so far this century is 53.1%, which hit in late 2016.

Profit margins declined in the first quarter of 2022 as resale prices on flipped homes continued to shoot up more slowly than they were when investors originally bought their properties.

Home flipping increased in 95% of local U.S. markets. In Florida, Jacksonville was in the top five for its percentage of flips in 1Q, 16% of all sales. Phoenix led the list with 18.7% of all home sales going to flippers.

© 2022 Florida Realtors®


Out-of-Town Buyers Have Unique Needs

The first and perhaps biggest question: What made you decide to move here? Slow and methodical work in the beginning will make their visit more productive.

MIAMI – As agents cater to more clients from out-of-town, it’s essential to gain an understanding of your buyers’ motivations. Agents should conduct a virtual intake meeting in a tranquil environment and take detailed notes.

After they get to know the buyers and their motivations, agents should create a cover page and itinerary for showings, and for each listing, they should include the reason for a visit.

For instance, if a buyer needs to be near public transportation, the distance to the closest public transit option should be noted. Agents also should provide clients with objective information on such things as transportation, schools, local attractions and amenities through a neighborhood guide they create and print out, with access to the source of some of that information if it falls under the Fair Housing Act.

A good pace for viewing homes is eight per day, with lunch in the middle, for the first two days of a three-day visit. On the third day, take a second look at homes and make final decisions. The final day also should include a lunch reservation in a convenient location along with a short coffee break.

If parking is an issue, agents should consider hiring a car and driver for the client’s visit. Beyond making parking easier, it also gives agents time to chat with the clients between showings rather than navigate traffic.

When making the initial round of listing, agents should have clients rate each property immediately after viewing it. The rating can have a scale of 1 being undesirable to 5 being an ideal home. Doing so helps weed out any homes under a 4 and can help frame discussions about offers.

Source: Inman (05/27/22) Busby, Julie

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


HUD Program First to Help ‘Homeless Encampments’

Calling it a “first-of-its-kind package,” HUD will spend $322M to help the unsheltered homeless, including some living off the land in rural communities.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) released a first-of-its-kind package to address unsheltered homelessness and homeless encampments, including funds that address homelessness in rural communities. The program is a goal of the Biden Administration.

The $365 million package includes grant funds and additional vouchers to enhance communities’ capacity to address unsheltered homelessness by connecting vulnerable individuals and families to housing, health care and support services. It promotes partnerships with health care organizations, public housing authorities and mainstream housing providers.

“We have a responsibility to ensure that people sleeping in their vehicles, in tents or on the streets, including in rural areas, have access to decent, stable housing and services, like health care and treatment,” says HUD Secretary Marcia L. Fudge, calling this group one of the hardest to reach. “With this funding, communities will have the resources to scale up coordinated efforts to move people humanely and effectively from encampments.”

“President Biden is following through on his promise to unite our country by delivering funding for health care and services that support individuals who are unhoused,” said “As a physician, I have seen firsthand how important it is to address the social and economic conditions of a person’s life in order for them to realize the health and well-being every American deserves,” says Dr. Rahul Gupta, director of the White House Office of National Drug Control Policy (ONDCP). “Today’s announcement is a key step in our work to do just that.”

The package includes:

  • $322 million in Continuum of Care Program grants through a Special Notice of Funding Opportunity to fund homeless outreach, permanent housing, supportive services and other costs as part of a comprehensive community approach to solve unsheltered homelessness – and a set-aside of $54.5 million specifically for rural communities.

The grants will fund projects for three-years, after which they will be eligible for renewal through the annual Continuum of Care program competition.

  • $43 million to fund about 4,000 new incremental vouchers that will be allocated via a separate notice to public housing authorities. These vouchers can serve households experiencing or at-risk of homelessness; those fleeing or attempting to flee domestic violence, dating violence, sexual assault and stalking; and veterans and families that include a veteran family member that meets one of the proceeding criteria. Congress has provided HUD with waiver authorities to facilitate lease-up for vulnerable households.

© 2022 Florida Realtors®


Hot Housing Market Keeps Foreclosures at Bay

Homeowners who have hit hard times face foreclosure, but most now also have lots of equity and they’re selling rather than going into foreclosure.

NEW YORK – The hot housing market keeps many delinquent mortgage borrowers from being foreclosed, with their home values often exceeding their mortgage principal. As a result, strong home prices and tight inventory frequently give homeowners the option to sell before facing foreclosure. In addition, federal forbearance programs and other safeguards offer them some breathing room.

Although foreclosure starts have risen since the moratorium ended last July, the current number is still roughly half of what it was for the same period in 2019 and about a tenth of the peak during the 2007-09 recession, according to ATTOM Data Solutions.

The S&P CoreLogic Case-Shiller National Home Price Index estimated that single-family home prices in major metros climbed around 33% in the two years ended February; price drivers included urban renters moving to buy more spacious suburban homes, long-term government stimulus, and a rapid economic rebound following COVID-19 lockdowns.

The National Association of Realtors (NAR) forecasts a 9% annual decline in housing demand, although home prices are unlikely to fall due to limited housing supply caused by labor shortages and limitation of buildable lots.

ATTOM’s Rick Sharga noted the pandemic-fueled job losses disproportionately impacted younger, lower-wage non-homeowners, while the persistence of elevated inflation means lower-income mortgage borrowers with little financial buffers could face a higher risk of default.

Source: Wall Street Journal (06/19/22) Matsuda, Akiko

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


OURFlorida Rental Assistance Halts Applications

The U.S. Treasury-funded program spent over $1.3B, helped 228K residents and closed to applications on May 12 – but some local programs may still offer aid.

TALLAHASSEE, Fla. – The only statewide, government-funded initiative that helped residents struggling to afford recent price hikes in the rental housing market is no longer accepting applications.

OURFlorida, an emergency rental assistance program funded by the U.S. Department of the Treasury, closed to applications May 12, according to a news release on the program’s website, citing it had allocated all its available funding.

The program spent over $1.3 billion aiding over 228,000 residents who were behind on rent or utility payments, according to a news release.

Florida had about 2.7 million renters in 2019, according to the most recent data estimate from the University of Florida’s Shimberg Center for Housing Studies. That number could be much higher now, as thousands of people flocked to the Sunshine State amid the coronavirus pandemic after remote employment became the norm and people searched for more outdoor recreation and a better quality of life.

Moreover, about 71% of low-income Florida renters and 42% of middle-income residents are expected to be cost-burdened this year – or spend more than 30% of their income on housing – according to the National Low Income Housing Coalition.

Those statistics are likely to worsen, the coalition’s vice president of research, Andrew Aurand, told TCPalm last month.

“Low-income renters were struggling to afford their rent even before the pandemic, and even before this significant spike in rents,” Aurand said. “If they’re severely cost-burdened by housing, they cut back on other necessities: food, medical care, other things that they need.”

Florida rental market skyrocketing

Florida rent increased about 32% between 2019 and 2021, according to data from ApartmentList.com.

In April, Florida housing markets accounted for eight of the nation’s Top 10 with the biggest rent increases over the year, based on a monthly index by Florida Atlantic University, Florida Gulf Coast University and the University of Alabama.

  • Fort Myers: 32.38%
  • Miami-Fort Lauderdale: 31.7%
  • North Port-Sarasota-Bradenton: 30.88%
  • Tampa: 26.93%
  • Port St. Lucie: 25.54%
  • Lakeland: 23.92%
  • Orlando: 23.7%
  • Melbourne: 22.46%

There are a few reasons industry professionals cited as the catalyst behind these recent price hikes: high demand, low inventory and a lack of affordable housing.

Florida rental assistance

An OURFlorida spokesperson would not answer TCPalm’s questions about the program on the record, but it could receive more funding in the future, according to Kody Glazer, legal director of the Florida Housing Coalition. The Department of the Treasury could reallocate funding not entirely used in other municipalities to markets, such as Florida, that have run out and are still in dire need. But until that happens, there is no statewide rental assistance program available to Florida residents.

That burden now falls on local governments, Glazer said.

“It really depends where a person is living and what their local government is doing about it,” he said. “It just depends on if the local government has used any other funding sources that they have … to set aside for rent assistance.”

There were 32 county and city governments throughout Florida that also received funding from the Department of the Treasury’s emergency rental assistance programs, Glazer said, and those communities could still have funding available.

Port St. Lucie, for example, is one of those municipalities and is still accepting applications, said Neighborhood Services Director Alex Tasca. Over $1.7 million was available, Tasca said, and about $847,000 has already been approved, processed and paid to residents. It is unknown exactly how much funding is still available, as some applications may have been approved but not paid out yet, she added.

Martin County, which did not receive any funding from the Department of the Treasury, allocated $100,000 received through the American Rescue Plan Act to rental assistance, said Human Services Administrator Michelle Miller. The county still had about $57,000 available as of June 15, Miller added, and another roughly $25,000 still usable in the Community Services Block Grant funded by the CARES Act (Coronavirus Aid, Relief and Economic Security).

“A lot of these rent programs are Band-Aids or short-term solutions until whenever that pot of money runs out,” Glazer said.

© 2022 Journal Media Group. Catie Wegman is TCPalm’s housing and real estate reporter.


Fla.’s May Home Sales: Listings and Prices Up

Florida Realtors: Fla.’s single-family median price up 21.8% to $420K. Condo median price up 28.8% to $322K. Rising interest rates slow sales but new listings up.

ORLANDO, Fla. – Rising mortgage interest rates, high inflation and still-tight inventory levels were factors influencing Florida’s housing market in May, with fewer closed sales compared to a year ago, according to Florida Realtors®’ latest housing data.

“Households everywhere are feeling the pinch of high inflation,” says 2022 Florida Realtors President Christina Pappas, vice president of the Keyes Family of Companies in Miami. “Homebuyers are also facing the challenges of rising interest rates and tight inventory of for-sale homes, causing some to hit the pause button on their plans. Still, the median time to contract for single-family existing homes in May was nine days – the same as it was in May 2021. The median time to contract for existing condo-townhouse units last month was 10 days compared to 19 days a year ago.

“Real estate market conditions are always changing, but buyers and sellers can turn to a local Realtor for expertise, knowledge and support.”

Last month, closed sales of single-family homes statewide totaled 28,861, down 6.9% year-over-year, while existing condo-townhouse sales totaled 13,265, down 14.4% from May 2021, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Rising mortgage interest rates continue to depress sales of existing homes in Florida, according to Florida Realtors Chief Economist Dr. Brad O’Connor, who added that the current level of sales is more comparable to the pre-pandemic years of 2018 and 2019 than sales in 2021, when mortgage rates were still near their all-time lows.

“This slowdown in the rate of sales was accompanied by an increase in the rate of homes listed for sale in May,” he said. “New listings of single-family homes were up on a year-over-year basis by 10.2% – the largest such increase since August of last year. New listings of townhouses and condos were up more modestly, by 3.4%.”

Dr. O’Connor explains, “With sales levels falling closer to historical norms and new listings on the rise in May, inventory levels are starting to rise, as well. The number of single-family homes actively listed for sale in Florida at the end of May was up over 23% compared to the end of April, and up 31.5% compared to a year ago. However, townhouse and condo inventory was up by almost 16% month-over-month, but still down on a year-over-year basis by 20.5%.

“Remember, inventory in each category – single-family homes and also for condo-townhouse properties – has remained at a very low level for some time, which means we’re still deep in seller’s market territory. But we’re starting to see some progress back toward a balanced market.”

The statewide median sales price for single-family existing homes in May was $420,000, up 21.8% from the previous year. Last month’s statewide median price for condo-townhouse units was $322,000, up 28.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

On the supply side of the market, inventory (active listings) of single-family existing homes showed some year-over-year improvement in May; it was at a 1.4-months’ supply compared to a 1.1-months’ supply a year ago. Condo-townhouse inventory was at a 1.5-months’ supply in May.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 5.23% in May, significantly higher than the 2.96% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to the Florida Realtors Newsroom and look under Latest Releases or download the May 2022 data report PDFs under Market Data.

© 2022 Florida Realtors®


What Makes a Brokerage Cohesive? The Culture

The baseline for a strong brokerage begins with training programs, support and systems. But the internal culture acts as the glue that holds people together.

NEW YORK – Ian Hoover, broker of record and co-owner at Deacon Hoover Real Estate Advisors, says the brokerage offers a strong training program, support and systems – but it’s the culture that keep everything cohesive.

For example, the brokerage bestows awards on a monthly, semi-annual and annual basis. Prizes can include gift cards, free lunches and event tickets. Awards are also posted on social media so agents can receive external recognition.

Also essential: Offering the right tools to get work done, including full computer setups, printers, a robust internet connection, office supplies and even a recording studio where agents can record podcasts and videos.

And, of course, the way to an agent’s heart is through their stomach. The kitchen should also have ample snacks, coffee and other beverages.

Location is important too. The brokerage shouldn’t be too far from downtown, the airport or other central attractions.

A casual low-stress atmosphere can also be achieved with things like a dart board, a table that converts into a pool table, speakers and other entertainment options. Hoover says one of his brokerage’s most popular yearly events is renting a suite at a baseball game.

If agents enjoy where they work and the people they work with, and they appreciate the effort it takes to pull those elements together, it makes it harder for them to think about departing.

Source: Inman (06/14/22) Hoover, Ian

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


NAR: National Home Sales Drop 3.4% in May

It’s the 4th month in a row for slowing sales, a drop of 3.4% month-to-month and 8.6% year-to-year – but U.S. is mostly down to 2019 levels after two gangbuster years.

WASHINGTON – Existing-home sales retreated for the fourth consecutive month in May, according to the National Association of Realtors®. Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales were down 8.6%.

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” says NAR Chief Economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life … is fading with a return to pre-pandemic conditions.”

Total housing inventory at the end of May was 1.16 million units, an increase of 12.6% from April and a 4.1% decline from the previous year. Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” Yun says. “Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially – almost doubling – to cool home price appreciation and provide more options for homebuyers.”

May’s median existing-home price for all housing types was $407,600, up 14.8% year-to-year ($355,000), with prices increasing in all regions. It marks 123 consecutive months of year-over-year price increases, the longest-running streak on record.

High profile findings

  • Properties typically remained on the market 16 days in May, down from 17 days in April and 17 days in May 2021. Nine out of 10 homes (88%) sold in May 2022 were on the market for less than a month.
  • First-time buyers made up 27% of sales in May, down from 28% in April and down from 31% in May 2021.
  • All-cash sales accounted for 25% of transactions in May, down from 26% in April and up from 23% in May 2021.
  • Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in May, down from 17% in April and 17% in May 2021.
  • Distressed sales – foreclosures and short sales – represented less than 1% of sales in May, essentially unchanged from April 2022 and May 2021.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate across all of 2021 was 2.96%.

Single-family and condo/co-op sales: Single-family home sales declined to a seasonally adjusted annual rate of 4.80 million in May, down 3.6% from 4.98 million in April and down 7.7% from one year ago. The median existing single-family home price was $414,200 in May, up 14.6% from May 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in May, down 1.6% from April and down 15.3% from one year ago. The median existing condo price was $355,700 in May, an annual increase of 14.8%.

“Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties – placing additional financial strain on prospective first-time homebuyers,” says NAR President Leslie Rouda Smith.

“To counter this trend, policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers,” Rouda Smith adds.

Regional breakdown: Existing-home sales in the Northeast climbed 1.5% in May to an annual rate of 680,000, falling 9.3% from May 2021. The median price in the Northeast was $409,700, a 6.7% rise from one year ago.

Existing-home sales in the Midwest dropped 5.3% from the previous month to an annual rate of 1,240,000 in May, slumping 7.5% from May 2021. The median price in the Midwest was $294,500, up 9.5% from one year before.

Existing-home sales in the South declined 2.8% in May to an annual rate of 2,410,000, down 8.4% from the previous year. The median price in the South was $375,000, a 20.6% jump from one year ago. For the ninth consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions.

Existing-home sales in the West slid 5.3% compared to the month before to an annual rate of 1,080,000 in May, down 10.0% from this time last year. The median price in the West was $633,800, an increase of 13.3% from May 2021.

© 2022 Florida Realtors®


Consumer Ad Campaign Focus: ‘Only a Realtor’

A drive to help build awareness of the Realtor brand led Broward, Palm Beaches & St. Lucie Realtors to create “Only a Realtor” ads, videos and social media campaigns.

WEST PALM BEACH, Fla. – Any Florida real estate licensee can help homeowners sell a home or buyers find a property, so why should anyone look for a Realtor® – a licensee who is also a member of the local, state and national Realtor organization?

The answer to that question lies at the heart of brand-awareness campaigns, and a program unveiled in May from the Broward, Palm Beaches & St. Lucie Realtors® – their first-ever consumer ad campaign – answers that question in the name of their campaign: “Only A Realtor®.”

The campaign’s tagline: “Any agent can help you buy or sell a home, but Only A Realtor® can do this …”

Other Florida Realtor associations also have ad campaigns, such as the Orlando Regional Realtor® Association (ORRA), that debuted in 2021. ORRA’s goal is to drive traffic to its “Find a Realtor” consumer-facing webpage, and it does so by offering digital and audio ads open to all members.

The Broward, Palm Beaches & St. Lucie Realtors created video ads, a consumer website (OnlyaRealtor.com), a member website (rworld.com/campaign) and other tools, such as a press release announcing the program.

“The campaign tagline … speaks to the fact that Realtors are experts who are members of the National Association of Realtors®, says Broward, Palm Beaches & St. Lucie Realtors President Carlos A. Melendez. “The difference isn’t just expertise; they adhere to a Code of Ethics that guides them.”

&Barr, an Orlando-based ad agency, created the campaign that includes 30, 15, 10 and 6-second spots that air on cable television, digital apps, social media platforms and branded content outlets.

&Barr Creative Director and Vice President Christian Wojciechowski says his firm created the campaign by first speaking to Realtors “to hear their stories.” He said they “felt their empathy and authenticity around the deep connections … with the people and families they’ve helped experience the American Dream.”

Wojciechowski says the campaign’s goal is to showcase that there’s “no substitute for a Realtor and no benefit worth the sacrifice of not having a Realtors. They become part of your family, and their role is not a transaction but to invest themselves in relationships that connect people with their dreams.”

The campaign focuses on real-life emotional connections to show that during the most significant transaction in someone’s life, Realtors are always by their side, including spots with new homebuyers and large family game nights, concluding with “Only A Realtor can place you in your perfect dream home.”

© 2022 Florida Realtors®


Using LinkedIn for Marketing

In addition to a business LinkedIn page, agents should have a personal LinkedIn page that, in addition to a photo, outlines their skills and experience.

NEW YORK – One way real estate professionals can stand out from rivals is with LinkedIn marketing. Agents should start by creating both personal and business LinkedIn pages.

A personal LinkedIn page should include relevant skills and experience, along with a professional headshot. Agents can also ask existing clients and colleagues to write a recommendation using the built-in feature.

Agents should customize the public LinkedIn URL of the company page to simplify the process of adding it to a resume or email signature. When agents are introduced to a business contact by a colleague or during a meeting, they should look for them on LinkedIn and send a connection request. They should also include a message that asks them to meet, such as during a coffee break or by phone.

When joining groups, agents should use their personal LinkedIn profile and, among other things, create articles about industry trends, such as writing about the impact inflation has on homebuyers. This can make them an expert not only in their region but also in the real estate industry.

Source: Realty Biz News (05/31/2022) Shepardson, Ben

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


RE Q&A: Is It OK to Self-Insure Our House?

As property insurance grows more expensive, homeowners study other options. If an owner has paid off the mortgage, is self-insurance an option?

FORT LAUDERDALE, Fla. – Question: We own our home outright, without a mortgage. Because of the insurance crisis, what is the feasibility of self-insuring our house rather than renewing our policy at an ever-higher cost? –Thomas

Answer: Under certain circumstances, it is feasible to go without homeowner’s casualty insurance. Even still, it is rarely, if ever, a good idea or a sound financial policy.

Banks and other mortgage lenders are good at making money and protecting their investments.

I often look at what mortgage lenders require of their customers to gauge the risk of a proposed action. For example, when asked whether a homeowner needs title insurance when purchasing a home, I respond that although they are not required by law to have this valuable coverage, every lender I have dealt with requires title insurance when lending money.

If a bank thinks it is necessary to protect their investment in your asset, you should afford yourself the same protection. Lenders also require their borrowers to have a casualty insurance policy for many of the same reasons.

Most people think of insurance as covering the small events – a fender bender, prescription drugs or a leaking water heater. While this is important, minor claims rarely exceed the cost of the policy, especially when considering the deductible.

When insurance shines is when the rare severe event happens. Not having health insurance and developing a serious health condition bankrupts many people. A dented fender is easy enough to live with, but replacing a totaled car can cost decades of car insurance premiums.

Similarly, if your house suffers a significant casualty – for example, a lost roof and flooding from severe weather, a fire, or even a guest hurting themselves on your lawn – the costs to the homeowner can be more than a lifetime of insurance premiums.

While no one enjoys paying their insurance bills, especially when they seem to increase every year, it still makes sense to grit your teeth and write a check.

Copyright © South Florida Sun Sentinel, Gary M. Singer. All rights reserved.


RE Q&A: Who Can Serve on HOA Committees?

Also: A condo board may approve/reject leases based on criteria in the Declaration; a background check found a recent arrest for assault and battery. OK to reject?

STUART, Fla. – Question: My homeowner’s association allows for non-owner residents and tenants to serve on committees. I did not think this was possible. Is there a Florida Statute that prohibits them from serving on committees? – E.T., Hollywood, FL

Answer: There is no Florida Statute that prohibits non-owner residents and tenants from serving on committees. Whether or not non-owners are allowed to serve on your association’s committees will depend on your Bylaw provisions.

Typically, Bylaw provisions are silent regarding the composition of committees. It will usually say that committee members serve at the pleasure of the Board of Directors. This means that the Board of Directors will be authorized to appoint and remove committee members at the Board’s discretion. If your association’s Bylaws do not prohibit non-owners from serving on committees, then non-owners may serve on committees.

That being said, unless the Bylaws explicitly allow non-owners from serving on committees, the Board could adopt a policy or rule that prohibits non-owners from serving on committees.

As a practical point on this question, there are many associations that will allow non-owner residents to serve on the Board. Typically, these are renters and other residents who tend to care more about the day-to-day matters at the association compared to absentee owners so it might not be a bad idea for your association to consider allowing non-owners to serve on committees.

Question: I am on the Board of my condominium association. We have the right to approve or reject leases based on certain criteria in the Declaration of Condominium. The background check for a recent applicant came back and showed a recent arrest for assault and battery. The Board of Directors wants to reject the proposed tenant. However, I am not sure if we have the right to do so. Can you help? – Q.M., Fort Lauderdale, FL

Answer: You state above that the Board has the right to approve and reject the lease application based on certain criteria in the Declaration of Condominium. The Board will need to review the criteria closely in order to determine whether it can properly reject the proposed lease application. Typically, in these situations, there is a criterium for rejection for felony convictions involving violence to persons or property. The crime of assault and battery would certainly qualify as a crime of violence against a person. However, the question is whether the charge resulting from the arrest was for a felony and, more importantly, whether there was a conviction from the felony charge.

It is important to thoroughly review the background check to determine whether the arrest led to a felony charge and whether the person was convicted of that felony. If the Board decides to reject the lease application, it must do so at a duly-noticed Board meeting. I also recommend reviewing your Declaration of Condominium provision more fully to determine whether opinion of legal counsel regarding good cause for rejection is required prior to a rejection of the lease application.

I recommend discussing this matter more fully with your association legal counsel so that the Board of Directors is fully advised regarding its options.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2022 Journal Media Group


1 in 4 Sellers Cutting Price as Market Cools

Altos Research: Rising rates and economic shifts have slowed down super-eager buyers as the market shifts to “much more normal conditions.”

NEW YORK – Altos Research reports that prices have been cut on more than 25% of homes on the market right now.

“Rising rates and the shift in the economy has slowed down the super-eager buyers,” says Mike Simonsen, co-founder and CEO of Altos Research. “We’re shifting from a real buying frenzy to much more normal conditions.”

He says about a third of homes take a price cut under normal conditions, but that was only 14% this spring amid high demand and low inventory.

“Sellers in the last two years can overprice their home and still get offers – that condition of the frenzy is gone, so it’s a much more normal market,” Simonsen says. “By July, expect to be back to our normal conditions nationally. We’ve been hotter than normal for over two full years since the start of the pandemic. By August, sellers who aren’t prepared will be surprised.”

He says there’s “nothing in the data yet that shows an indication of home prices crashing, [but] there is an indication of probably zero home price appreciation in 2023.”

Source: MarketWatch (06/15/22) Swaminathan, Aarthi

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


U.S. Home Equity Highest on Record – $27.8T

Many homeowners used some of their home equity via a cash-out refinance when rates were dropping. “Tappable equity” rose to $200K per home in 1Q 2022.

NEW YORK – The Federal Reserve reports that total U.S. home equity surged nearly 20% in the first quarter to a record $27.8 trillion.

While rising home values boosted the finances of American homeowners, rising mortgage rates have made it more expensive for homeowners to use that equity. According to Black Knight reports, about 60% of withdrawn equity in 2021 was accessed via cash-out refinances. However, refinances have dropped as mortgage rates rise

Black Knight’s report finds that tappable equity – the amount homeowners can borrow and still retain at least 20% of the home’s equity – increased a record $1.2 trillion in the first quarter to more than $11 trillion. Almost 75% of it belonged to borrowers with mortgage rates below 4%.

According to Black Knight, average tappable equity available to Americans with mortgages jumped to a record $207,000 in the first quarter.

According to CoreLogic, equity gains likely will spur a record amount of home-improvement spending this year.

Source: Wall Street Journal (06/15/22) McCaffrey, Orla

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Top U.S. Relocation Destinations? Miami and Tampa

Two other Fla. metros – Cape Coral and North Port – are also in the top 10 Redfin report, with New York City and Chicago top feeder markets.

SEATTLE – Homebuyer migration remained at an all-time high in April and May, with 32.3% of Redfin.com users nationwide looking to move to a different metro area, according to a new report. The percentage is unchanged from a record set in the first quarter but up from about 26% before the pandemic began.

Homebuyers aren’t just chasing preferred destinations, they also make moving decisions based on an area’s housing costs.

Florida destinations hold top spots

Miami and Tampa topped the list of most popular destinations for homebuyers moving from one metro to another in April and May measured by net inflow – the number of searchers looking to move into an area rather than out of that area.

Miami has topped the list all year, but Tampa just passed Phoenix for the number-two spot. Phoenix had held the number-two spot since last fall; now it comes in at number three.

Two other Florida metros also made the list with Cape Coral at No. 6 and North Porth at No. 7.

Tampa is more popular with relocating homebuyers largely because it’s relatively affordable, with the typical home selling for $370,000 in April. Although Tampa prices rose nearly 28% year over year, they were still well below the national median of $424,000. It’s the only metro on the top-five list where that’s the case. The typical home sells for $475,000 in Miami, $480,000 in Phoenix, $605,000 in Sacramento and $445,000 in Las Vegas.

Migration into Tampa has steadily ticked up since the pandemic began. Tampa had a net inflow of more than 11,000 homebuyers in the first quarter, up from roughly 7,600 a year earlier and about 4,000 two years earlier.

Top 10 metros by net inflow

  1. Miami – 33.8% of searches from outside, top feeder market is New York
  2. Tampa – 50.3% of searches from outside, top feeder New York
  3. Phoenix – 36.6% from outside, top feeder Los Angeles
  4. Sacramento – 42.6% from outside, top feeder Los Angeles
  5. Las Vegas – 46.5% from outside, top feeder Los Angeles
  6. Cape Coral, Fla. – 67.4% from outside, top feeder Chicago
  7. North Port, Fla. – 67.4% from outside, top feeder Chicago
  8. San Diego – 31.5% from outside, top feeder Seattle
  9. San Antonio – 42.7% from outside, top feeder Los Angeles
  10. Dallas – 25.1% from outside, top feeder Los Angeles

© 2022 Florida Realtors®


Number of Buyers Backing Off? Maybe Half

If rising costs didn’t deter hopeful home buyers, rising mortgage rates might. Realtor survey estimate: About 50% of buyers paused plans at least temporarily.

NEW YORK – The Federal Reserve raised the benchmark interest rate by 75 basis points this week to a 1.5% to 1.75% range, the biggest hike since 1994, as it tries to contain inflation, currently at a 40-year peak.

Eric Finnigan at John Burns Real Estate Consulting tweeted as mortgage rates rise from 3% at the start of this year to 6% now, it effectively prices out 18 million households.

“The cost of borrowing is becoming more expensive, particularly for those with variable rate products,” says Bankrate.com analyst Mark Hamrick.

While the latest mortgage rate increase was baked into the expected 75-basis-point raise, Holden Lewis at personal-finance site NerdWallet says interest rates will continue to climb.

About 50% of buyers are pausing their home-purchasing plans, opting to wait six to 12 months before resuming the process, according to a survey of 900 Realtors by real estate tech startup HomeLight.

And earlier this month, the Mortgage Bankers Association reported that the Market Composite Index hit a 22-year low.

The Fed’s move did not surprise analysts, as Ben McLaughlin at online savings platform SaveBetter.com said the agency was meeting expectations with its third consecutive hike in the Fed Funds target rate since March 2022. “Markets have been rattled lately, so the Fed must walk a narrow path to avoid a jolt so pronounced that it risks tipping the U.S. economy into recession,” he says.

Source: MarketWatch (06/16/22) Fottrell, Quentin

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Condo Q&A: Unit Owner Tells Vendors What to Do

In a common problem, one condo-unit owner tries to tell landscapers how do their job, but the association employs them – not that individual owner.

FORT LAUDERDALE, Fla. – Question: I am a newly elected director at my condominium association. Our community just turned over from developer control on January 31, 2022. We are trying to find guidance on how our Board of Directors can make decisions for the community.

For example, if we need to enter into a contract, can we obtain a consensus via email? I’ve heard that all decisions must be made at a Board meeting, but our monthly board meeting just happened and the next board meeting is not for another month. Is there a way to allow the president or another officer to enter into contracts without a board meeting? – J.N., Boynton Beach

Answer: Initially, please note that all board decisions and votes must occur at a duly-noticed board meeting. A duly-noticed board meeting is a meeting of the Board where notice has been posted conspicuously on condominium property at least 48 hours prior to the date of the meeting. At that board meeting, the board can properly make a motion and vote to make a decision on behalf of the community. Now, this does not mean that board members are prohibited from communicating with each other regarding association business prior to the Board meeting. In fact, Section 718.112(2)(c) of the Florida Statutes allows board members to communicate with each other via email but prohibits casting votes on an association matter via email.

I understand that situations may arise where a board decision needs to be made but there is some time before the next regularly scheduled board meeting. In those situations, the board can schedule a board meeting as long as it is duly-noticed as described above.

Another option would be for the board to adopt a policy that provides an officer, such as the president, with authority to enter into contracts or make purchases within specific parameters such as value and term of the contract. If the board would like to explore this option, I strongly recommend that you speak with your legal counsel as the board should seek guidance regarding the parameters of the board policy.

Question: We have an owner in our HOA that regularly interferes with our landscaping vendor. She provides them with direction that is contrary to the direction provided by the board. She has no authority to give them any direction.

The landscape vendor has been advised not to listen to her. However, if they do not heed her direction, she yells at them and demeans them. The landscaper has threatened to terminate our agreement and hiring a replacement landscaper will cost significantly more than what we are paying now. What are our options? – T.F., Fort Lauderdale

Answer: You are not alone. We have seen this occurring in a number of community associations – in condominiums, homeowner’s associations, and cooperatives. Often, these owners have an idea on how the landscaping should be done throughout the community. However, they are not on the board and have no authority to speak for the landscaper’s employer – the association.

The association has several options in these situations. Initially, we recommend that the association, through its legal counsel, send a cease and desist to the owner as she is interfering with the association’s landscape vendor. If the owner complies with the cease and desist, then this is no longer an issue.

However, if the owner does not comply, which is the more likely scenario, the board can adopt a rule where it specifically makes interfering with an association vendor a fineable offense. If the owner keeps interfering with the association vendor, then the board can seek to levy fines against her for each instance that she interferes with the landscape vendor.

I am also concerned regarding the landscape vendor’s threat to terminate the landscape agreement. If this occurs, the association will be forced to obtain another landscape vendor at what seems to be a significant increase in price. If this does occur and the owner’s interference is the only reason that the landscape vendor terminated its agreement with the association, then the association could have a claim against the owner for tortious interference with a business relationship. I strongly recommend mentioning this in the cease and desist.

The association may have further options. I recommend speaking with your association’s legal counsel on this matter.

Question: The unit below mine has been experiencing leaks coming from my balcony. The association had an engineer come in and she reported that the balcony needs new waterproofing. Am I responsible for this? – M.S., Boynton Beach

Answer: The answer to your question should be in the maintenance section of your Declaration of Condominium. This section will provide the party responsible for the maintenance, repair, and replacement of various parts of the condominium, including, but not limited to, the building exterior, the unit, and the limited common elements. The balcony is very likely a limited common element to your unit.

In most Declarations, the unit owner is responsible for keeping a limited common element balcony clean and free from debris. The owner might even be responsible for replacing lightbulbs and the fixtures in the balcony area. However, when it comes to waterproofing the balcony slab, most Declarations will keep this the responsibility of the association. This is because there is too much risk associated with allowing different owners with different vendors to waterproof the balcony slabs or even do structural slab work on the balconies.

Although it is likely the association’s responsibility, I recommend reviewing this matter with your legal counsel to confirm the party responsible to waterproof your balcony.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein.

© 2022 Journal Media Group. John C. Goede, Esq., is a shareholder of the Law Firm Goede, DeBoest & Cross.