News & Information: Orlando REALTOR® magazine - Special Feature

Laws Of Gravity

Friday, May 4, 2012  
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Special Feature
From the May/June issue

REALTOR® lobbying efforts result
in serious real estate legislation

If you followed the 2012 regular session of the Florida Legislature, you know it was anything but typical. In addition to dealing with a $2 billion budget shortfall, legislators had another time-consuming task that happens only once a decade: redraw political boundaries, a process that required the Legislature to convene two months earlier than usual.

Given these circumstances, Florida REALTORS® went into the 2012 session with realistic expectations and a modest agenda.

"Last year, we took on some big issues — ‘scrapping the cap’ on the Sadowski Housing Trust Funds and passage of a proposed constitutional amendment providing property tax relief for thousands of residential and commercial property owners. That effort will appear as Amendment 4 on the November ballot,” says John Sebree, senior vice president of public policy for Florida REALTORS®.

"With the budget shortfall, we knew legislators wouldn’t have an appetite for additional property tax reform, so we focused primarily on initiatives that could strengthen the real estate market and improve the business environment of our members.”

Of the 1,747 general bills filed this session, fewer than 300 passed both chambers. Among these were several of Florida REALTORS® priority bills dealing with septic tank inspections, local business taxes, and Citizens Property Insurance Corp. Here are highlights of the 2012 legislative session:

»Real estate sales associates and broker associates exempt from local business taxes - HB 7125, a bill by the House Economic Affairs Committee, exempts real estate sales associates and broker associates from paying local business taxes (formerly known as occupational license fees) if required in their city or county. Under Florida law, these individuals must affiliate with a real estate broker who already pays local business taxes. Brokers will continue to pay the tax. Repeal of the tax will save real estate licensees $3.8 million annually. Effective date if signed by the governor: Oct. 1, 2012.

»Mandatory septic tank inspections out, optional inspections in - HB 1263, an omnibus health care bill, was amended with REALTOR®-supported language originally provided in HB 999 and SB 820 to repeal the mandatory septic tank inspection law passed in 2010. It establishes an optional inspection program for the 19 counties with the 33 largest springs. However, other cities and counties may opt into the program as well. Also, septic tank inspections cannot be required as a condition of sale.

»A major step toward creating a competitive property insurance market - HB 1127 reduces the amount of money private insurers must give Citizens Property Insurance Corp., if the state insurer goes broke after a catastrophic storm. The first check a private insurer writes after a catastrophic storm should be to their policyholders, not Citizens. However, current law requires insurers to pay Citizens up to 18 percent of their premiums within 30 days of being assessed. They can later recoup these monies from their policyholders. It’s hoped that HB 1127 will attract new insurers to Florida and keep existing insurers here. Effective date if signed by governor: July 1, 2012.

»Tax boost for businesses - HJR 1003 by Rep. Eric Eisnaugle (R-Orlando) creates a proposed constitutional amendment to increase the exemption for tangible personal property taxes. Under current law, an exemption applies to the first $25,000 in property taxes such as business equipment. If approved by 60 percent of voters in the November election, the exemption would expand to include the value of tangible personal property between $25,000 and $50,000.

»Options for challenging Citizens replacement cost estimates – Back in January, following discussions with Florida REALTORS® and policyholders concerned about unreasonably high replacement cost estimates, Citizens Property Insurance Corp. agreed to consider valuation sources other than 360Value software. HB 1101 codifies three options into law, including valuations prepared by real estate appraisers licensed under Chapter 475, F.S. Effective date if signed by governor: July 1, 2012.

»Broad range of economic development incentives - HB 7087 is a large omnibus tax bill that’s part of the budget deal agreed to between the House and Senate. Of particular interest to real estate companies is an increase in the corporate income tax exemption from $25,000 to $50,000. Effective date if signed by governor: July 1, 2012.

»Reducing condo inventory and protecting an appraiser’s interests - The Department of Business and Professional Regulation (DBPR) pushed two bills this session that contain items of interest to the real estate industry. You may recall that the 2010 Legislature wanted to encourage investors to purchase blocks of condo units to reduce inventory levels. This was accomplished in part by amending condo laws to protect bulk buyers from some of the liabilities faced by condo developers. These protections were set to expire on July 1, 2012. HB 517 extends the "bulk buyer” provision to July 1, 2015. Effective date if signed by governor: July 1, 2012. The other DBPR bill, HB 887, prohibits appraisal management companies from requiring appraisers to sign hold harmless agreements as a condition of business. Effective date if signed by governor: Oct. 1, 2012.

»Budget appropriations - Though the Legislature swept all monies collected for the Sadowski Affordable Housing Trust Fund into general revenue, it appropriated funds for economic development initiatives and tourism that could ultimately benefit the real estate market:

  • $61 million for the State Economic Enhancement and Development (SEED) Fund and other economic development funds. These monies may be used to fund affordable housing programs and projects.
  • $27.5 million for Visit Florida, the state’s marketing agency.
  • $8.6 million for Enterprise Florida, a state economic development agency.
  • $285,000 to combat unlicensed activity, $30 million for Everglades restoration.
  • $8.4 million for the Florida Forever land acquisition program.
  • $1.5 million to study nitrogen reduction and develop possible new technology for passive septic systems.

Failed Initiatives

Florida REALTORS® successfully opposed passage of the following legislation:

»SJR 314 by Sen. David Simmons (R-Altamonte Springs) would have replaced Amendment 4 on the November ballot — supported by Florida REALTORS® — with one that created a "super exemption” on homestead properties. Amendment 4, which lawmakers approved in 2011, includes a property tax break for first-time homebuyers and curbs the growth of commercial property assessments.

»HB 213/SB 1890 sought to speed up Florida's judicial foreclosure process. The bills also contained language to reduce the amount of time lenders have to request a deficiency decree from five years to one. • SJR 838/HJR 55 sought to freeze property tax rates for low-income seniors.

»SB 1784/HB 245 by Sen. Alan Hays (R-Umatilla) would have allowed surplus lines carriers to take policies out of Citizens Property Insurance Corp.

»HB 319 included language clarifying that a lender is responsible for a specific amount of unpaid fees and assessments for association-controlled foreclosures (condos/HOA/co-op). Safe Harbor provisions already exist in statute and state that a bank’s liability is capped at the lesser of 12 months’ past due assessments or 1 percent of the original mortgage debt. However, this hasn’t stopped collection agencies and attorneys from disrupting closings with dubious financial claims against lenders.

Source: Florida REALTORS®

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