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2011 Florida legislative session recap

Wednesday, May 25, 2011  
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The 2011 Florida Legislature adjourned in May, but not before taking action on a bevy of real estate issues supported (or opposed) by Florida’s REALTORS®.

Among the those actions considered victories by REALTORS® was "Scrapping the Cap” on the Sadowski Housing Trust Funds — a goal of Florida REALTORS® for the past five years — and passage of a joint resolution that will ask voters in 2012 to lower the cap on property tax assessments on non-homestead properties from 10 percent to 5 percent — something the association has worked on since 2008. Read on for a recap of the 2011 legislative session.

REALTOR®-supported Bills That Passed

HB 639 and SB 912 remove the $243 million cap on the Sadowski Affordable Trust Fund. This year, the Florida Housing Finance Corporation has $64 million for state and local housing programs.

HJR 381, which requires voter approval in November 2012, reduces the yearly assessment cap on non-homestead property from 10 percent to 5 percent. It also gives anyone who hasn’t had a homestead exemption in Florida for three years a property tax discount of 50 percent of the home’s assessed value, not the exceed the median home price in that county. This additional first-time homestead owner exemption phases out for the property owner over five years while their Save Our Homes is phasing in.

The measure also allows the Florida Legislature to prohibit assessment increases when property values fall. Currently, the Legislature does not have the power to prevent local governments from "recapturing” the tax revenues that Save Our Homes shields during a rising real estate market.

SJR 592, which requires voter approval in 2010, extends the combat-related disabled veterans’ ad valorem tax discount on homestead property from those were Florida residents when they entered military service to any disabled combat veteran residing in Florida (regardless of where they lived when they entered military service).

HB 7185 is a $30 million tax cut for small businesses and boosts the exemption to the corporate income tax by increasing the exemption from $5,000 to $25,000. That amounts to a cut of roughly $1,100 per business. More importantly, many small businesses will not have to pay any corporate income taxes.

HB 281 was amended from its original version – requiring property owners who appealed their property tax assessments to pay 75 percent of the appraised value – to allow owners to instead make a good faith payment during the appeal process.

SB 408 seeks to rein in the cost drivers that cause property insurance premiums to rise and discourage voluntary market insurers from doing business in Florida. Key provisions include:

  • Mandates insurers must continue to offer sinkhole coverage, but can limit coverage to homes and not other structures on people’s property, including garages and pools. Insurers may also call for an inspection of property before issuing sinkhole coverage.
  • Defines structural damage as it relates to sinkhole loss. Allows insurers to initially pay actual cash value for repairs to dwellings. Florida is one of only a few states that require insurers to pay replacement claims upfront regardless of whether the insured items are replaced or not.
  • Permits Insurers to require that repairs be made before fully paying a sinkhole claim. (Claims for loss from sinkholes must be made within two years; for hurricanes, three years.)
  • Limits public adjuster compensation.

SB 408 allows insurers to raise rates by up to 15 percent to cover their increases in reinsurance costs. State insurance regulators would still have to approve any increase.

HB 99 furthers the commercial insurance deregulation process by exempting five additional lines of commercial insurance, including non-residential property insurance, from the rate filing and approval process in current law. The bill also allows insurers selling certain types of coverages to make pricing changes on a more expedited basis, enabling them to avoid some of the expense incurred in a full rate filing and review process. REALTORS® should know, however, that current law prevents insurers from making rates excessive or discriminatory.

HB 1007 ensures that property owners continue to have title insurance coverage even if their underwriter is liquidated. When an underwriter is liquidated, as is currently the case, all other underwriters in the state would pay an assessment to DFS, and this would be passed on — over a period not to exceed seven years — to new policyholders in the form of a surcharge of up to $25. DFS indicates that the surcharge resulting from the underwriter currently being liquidated would be significantly less than $25.

HB 7129 makes big changes to the state’s role in growth planning and oversight first laid out in the 1985 Growth Management Act. This includes empowering local governments to plan their own growth and development; changing "concurrency” rules so that local governments have more options when working with new projects, rather than forcing developers to plan first for schools, roads, parks and other amenities; and prohibiting local governments from enacting local "Hometown Democracy” growth-by-ballot proposals. Florida REALTORS® supported permit extensions included in this bill.

HB 933 includes a provision changing the "burden of proof” for challenges to permits. If signed by the Governor, as is expected, the burden of proof will shift from the permit-holder to the person challenging the new development.

SB 396 changes the initial requirements for certain persons acting as home inspectors and removes language enacted last year that allowed Division 1 contractors to perform both the home inspection and make repairs.

SB 1316 codifies into the Florida S.A.F.E. Mortgage Licensing Act the same language contained in a federal act that allows Florida real estate licensees to list and sell short sales without having to first obtain additional licensure under Chapter 494.

CS/SJR 958, which required voter approval, replaces the existing state revenue limit — based on personal income growth — with a new state revenue limit based on inflation (CPI) and changes in population.

HB 311 prohibits local governments that were not collecting business taxes from sales associates on October 13, 2010 from doing so in the future. Local governments that were collecting business taxes from sales associates on that date are not impacted.

HB 1195 seeks to fix aspects of last year’s condo legislation. Provisions of interest to REALTORS® and property managers include those that:

  • Clarifies that condos less than four stories high with exterior corridors are exempt from installing manual fire alarm systems.
  • Clarifies that associations are permitted to install impact glass and other code-compliant windows for hurricane protection.\Diminishes certain rights of unit owners who are delinquent in their association fees, such as use of common areas.
  • Clarifies the process by which an association communicates with tenants of unit owners who are delinquent on association fees and dues.

SB 1142 establishes a number of requirements for persons and companies claiming adverse possession, as well as the county property appraiser. For instance, the property appraiser must provide notice to the owner of record that an adverse possession claim was made. The bill also gives priority to the title holder who resumes payment of property taxes, even if an adverse possessor already made a payment.

HB 883 prohibits local governments from enacting a ban on short-term rentals after June 1, 2011. Local governments with existing rental ban ordinances are not impacted.

REALTOR®-supported Bills That Failed

*An attempt to delay regulation of appraisal management companies. Consequently, regulation of AMCs will begin July 2011.

*Reforms to Citizens Property Insurance Corp., including a rate increase of between 15 percent and 25 percent, and limiting Citizens eligibility to homes that have a replacement cost of less than $1 million. Citizens rate increases will continue to be capped at 10 percent (minus rate increases for sinkhole needs), but all Florida policyholders, except worker’s comp and medical malpractice, could be subjected to additional assessments should a strong hurricane hit Florida.

*SB 1698, which would have repealed mandatory septic tank inspections approved by the 2010 Legislature. The budget passed by the Legislature prohibits the Florida Department of Health from expending funds for the septic tank inspection program unless the plan is approved by the Legislative Budget Commission and ratified by the 2012 legislature.

*Additional property tax breaks for low-income seniors in the form of assessment caps. Enhancements to criminal trespass statutes, which would have assisted law enforcement in removing squatters using principles of adverse possession to occupy vacant and abandoned properties.

*Legislation to implement Amendment 6, passed by Florida voters in 2008. This is the amendment that allows working waterfront properties to be taxed based on current use, not highest and best use.

*A bill to authorize the non-judicial foreclosure of property.

*A bill to expedite foreclosures proceedings.

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