Curious twists in traditional law issues.

I read this in the Florida Business Review - February 13, 2009

Today's economy may produce a house divided

No one knows the disruptive force of a bad economy better than a divorcing couple facing foreclosure.

Take the case of Joaquin A and Indra B, who have been married for almost nine years. They bought their Biscayne Park home near the height of the housing boom for $231,000 in 2005. It fell into foreclosure with them owing $222,000 last year, and the house went on the market.

B hadn't worked in a year, and the couple fell about $8,000 in arrears on the mortgage with Wells Fargo Bank. Her lawyer, Miami attorney Peter Abraham, filed an emergency motion for contempt for nonpayment of the mortgage and child support shortly after the foreclosure filing, stating, "Petitioner and the parties' minor child resides in the marital home and will be rendered homeless upon foreclosure."

Miami-Dade Circuit Judge Bernard Shapiro held A in contempt in July but held off on jailing him so he could square the mortgage. A divorce settlement agreement is awaiting B's signature. B and A' attorney declined to comment. Calls to A and B's attorney were not returned.

The predicament of what to do about family homes in divorce during a recession is rippling through the field of family law. What traditionally was a couple's biggest asset to be divided in a divorce has quickly transformed into the biggest debt and a major headache. "Initially, we were fighting over the equity in the house," said Linda Jaffe, a Fort Lauderdale solo practitioner who specializes in family law. Now "we're being faced with questions that I don't know that we're necessarily equipped as divorce lawyers to answer."

Should clients try renegotiating the mortgage? Go along with foreclosure? Abandon the property? Try a short sale? In the past year, Jaffe said she has been saddled with this new set of questions repeatedly. "It's an absolute catastrophe we're dealing with right now," she said. Stephen Butter, who has practiced divorce law for 44 years in Miami, said his role has changed with the financial tides. He has helped clients fend off foreclosure just long enough to salt away a deposit and first month's rent. A client who was a married homeowner a year earlier ends up being a divorced tenant with the bank taking the house.

"Now, it's rampant. Now when somebody comes in for divorce, their house is either in foreclosure, or they're already three or four months behind," he said.

For homeowners who owe more than the value of their home, the new question is how to equitably divide the value of a house — when it's negative. "Is that a marital liability?" he asked.

Butter worked on a case that ended with something of a biblical solution that left ownership of the home untouched. One of Butter's clients — a mother of five — was afraid to unload the family home in an ice-cold real estate market. He brokered a deal allowing her to alternate weeks in the family home and weeks away with her family or friends. The children remain in the home while the parents alternate. He would not identify the clients.

For better or worse, more couples are staying together. Divorce filings dropped to 14,250 from 16,508 in Miami-Dade Circuit Court; to 8,729 from 9,651 in the Broward Circuit Court; and to 5,554 from 5,927 in Palm Beach Circuit Court in the year ended last June compared with the year before.

Davie appraiser Don Sarley of Advanced Research and Appraisals, said plummeting home values have affected divorces in other unforeseen ways — like not being able to tap a home's value to pay attorney fees. "People can't pay lawyers," he said. "You can't even look at the house to lien anymore."

In the past year, the median sale price of a single-family home dropped 27 percent in Miami-Dade County, 23 percent in Broward County and 18 percent in Palm Beach County, according to the Florida Association of Realtors. And while the median sales price of Miami-Dade condos fell 12 percent during the same period, it shot down 29 percent in Fort Lauderdale and 27 percent in Palm Beach County, according to association figures. With home values in broad decline, the strategy for dealing with homes in divorce has been turned on its head. "Two years ago, they'd be fighting tooth and nail to get the house," Sarley said. "Now they don't want it."

But not everyone has noticed the pinch. Collaborative divorce lawyer Rosemary Roth in Miami, for instance, hasn't seen her practice affected much, but she readily admits the parties are generally conciliatory in her area of the law. Pinched finances may be working to keep families unwillingly together. "People are holding onto an otherwise bad situation because of economics," said Alison Taylor, executive director of the Oregon Family Institute, a think tank that examines the relationships between households and the courts.

"Since we usually see divorces happen when the money situation is no longer advantageous, we're probably going to see fewer and fewer families file for divorce," she said. "Kids are going to be subjected to a lot of conflict."

Nothing new in the domain of Money and Love and their eternal and intricate relationship.

Not your usual romantic story? Why not? Sometimes hardship and adversity in times of need can bond, improve understanding and perhaps the sense of family and mutual responsibility.

I am an eternal optimist.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,

Creative Taxation

Is that a good definition?

Davie sets the tone on what we can expect from our local governments.

I have been a permanent advocate of lower property taxes.

A key source of employment in Florida, housing construction, sales, financing and maintenance are major components of our economy. Property taxes have increased well above the official inflation rates during the last two or three decades.

Thousands of new homes and condos in every location have surely tremendously broadened the taxable base of most cities in South Florida. That has not been enough to feed the appetite of voracious cities and counties.

A couple of lukewarm regulations by our Florida congressmen have aimed to ease homeowners’ pains, as well as an amendment recently approved to increase the homestead exemption amount. Our taxes are calculated on the assessed value of each property, which is determined by the county property appraiser’s office, multiplied by the “millage” which is determined by the local governments.

While our legislators have focused on reducing the assessed values, local governments are starting to defeat this purpose by increasing their millage, which is what was to expect, and I wrote about it a long time ago.

However, the flood of new service charges that many cities are implementing is starting to look more and more as double taxation. Charging us for services traditionally covered by our property taxes is the new plague that relentless local authorities are uncovering. I wouldn’t be surprised if the cop handing you a ticket for a traffic violation could include an additional bill for his “services” with a "thank you for your business" remark, or if a local library could charge you a “shipping and handling” fee every time you pick a book.

Here is an example of this kind of creativity. The city of Davie is today's winner. Read this article from the Sun Sentinel.

By Susannah Bryan - South Florida Sun-Sentinel - September 30, 2008

Accident response fees are so controversial that five states — Georgia, Indiana, Missouri, Pennsylvania and Tennessee — have passed laws to ban them.

Yet Davie on Wednesday is set to give final approval to a measure that would bill at-fault residents and out-of-towners an estimated $840 for costs associated with responding to car accidents. If it can't be determined who is at fault, all parties would be billed.

"It is a cost recovery fee for people who are creating havoc on our highways," Councilwoman Susan Starkey said on Monday.

If approved, Davie would become the first municipality in South Florida to charge such a fee. The town tentatively approved it 3-2 on Sept. 17, with council members Michael Crowley, Marlon Luis and Susan Starkey supporting it. Mayor Tom Truex and Councilman Bryan Caletka rejected it.

As Davie moves ahead, insurance companies are working to persuade Florida to ban such fees. They argue the fee will raise insurance rates and is really a hidden tax.

"We have been trying hard to fight back," saidWilliam Stander, assistant vice president of Property Casualty Insurers Association of America, a trade group that represents more than 1,000 companies nationwide. "The idea that you should have to pay for police and fire services, it's offensive."

Insurers lobbied five states to ban the accident fee and each agreed because of concerns over double taxation.

State Rep. Martin Kiar, D-Davie, said the issue may come up in Florida this legislative session.

"People are having such a tough time making ends meet," Kiar said. "For the cities to impose another fee, it's just not fair to our people."

On July 28, Pembroke Pines commissioners voted against a similar fee, citing concerns it would expose the city to costly legal challenges. Officials in Plantation, Miramar and Southwest Ranches, who had briefly considered the idea, say they have dropped it.

If approved, Davie would hire Dayton, Ohio-based Cost Recovery Corp. to bill insurers. If they don't pay, nonresidents would get a bill but residents would not.

Supporters argue that Davie responds to more accidents than other cities because it is surrounded by Interstates 95, 595, 75 and Florida's Turnpike. As proposed, the fee would apply to accidents on highways and local roads that require emergency response, including those outside town.

Critics say the fee may lead to a tit-for-tat mentality, with cash-strapped cities passing similar laws to raise money.

In July, Weston City Manager John Flint said his city would likely charge an accident fee to residents of cities who impose such a fee on Westonites. But on Monday, Mayor Eric Hersh said he opposes such a plan.

"If everyone starts charging, it's really nothing but an increase in taxes for everybody," Hersh said.

The plan also doesn't sit well with Steve Breitkreuz, a councilman in nearby Southwest Ranches.

"It doesn't sound neighborly," he said. "It creates animosity between the towns. It may set a precedence that will ripple out through the communities and we'll all be looking out for our own."

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,

Broward County Cities trimming their budgets

I read this today in the Sun Sentinel.

And my first reaction is that it should only be a beginning. We need more. And we need better decisions. Cutting back on unnecessary services is OK. But making better use of existing work forces, trimming bureaucracy, reviewing generous pension plans that cities'revenues cannot reasonably cover, this is the way to go. And, by the way, charging for previously free services can fool some of us for some time, but we end up noticing it. We agree that reducing fireworks and other luxuries should be part of these sacrifices, but please don't forget that the goal is to trim the fat, not the substance.

August 28, 2008

County cities trimming budgets: Does anyone notice?
By Jennifer Gollan » South Florida Sun-Sentinel


It was a tough decision, one Sunrise officials were reluctant to make. But faced with a $6 million shortfall, the city this fiscal year sliced its popular Sunrise Loves Our Seniors socials.

Retired nurse Rita Karmiller, 77, had attended the parties for 10 years but admitted, "I haven't really noticed" that the gatherings were scrapped.
A random survey of 17 municipalities in Broward County found that despite their strong warnings about the pain budget cuts would bring, few residents were upset enough to file a complaint. Now, with governments poised to impose more cuts in October, some residents are grumbling that local officials have lost their credibility.

"In our neighborhood, I haven't noticed any cutbacks at all," said Bob Emanuel Sr., 61, who sits on the Boulevard Heights Homeowners Association in Hollywood, where officials this fiscal year had to fill a $12.4 million gap. "The local governments are complaining. ... I think it's a big hoax."

The budget tightening varied from city to city. Some cut bus service, shuttered swimming pools, increased fees or eliminated fireworks on the Fourth of July. Yet officials in Coconut Creek, Coral Springs, Dania Beach, Davie, Lighthouse Point, Margate, North Lauderdale, Pembroke Pines and Sunrise recorded no complaints.

Deerfield Beach, Lauderhill, Miramar, Pembroke Pines, Plantation, and Fort Lauderdale received only a few complaints each; while Weston and Tamarac each received around a dozen.

Some governments, such as Broward County, Hollywood and Pembroke Pines, say they expect to feel the wrath of residents with the 2008-09 budget. For example, Broward County commissioners are considering closing some parks on Tuesdays during the school year, which has already provoked about a dozen complaints.

In Hollywood, "we're looking at increased fire and water fees, and changes to after-school programs in the parks," said Raelin Storey, spokeswoman for the city, which last year eliminated 46 vacant positions, withdrew support for 14 special events such as the St. Patrick's Day Parade and cut back on maintenance. "If they didn't feel it last year, they will feel it this year."
Storey could not say how many residents, if any, complained, because the city lacks a system to track it.

With a shortfall of more $5.7 million this fiscal year, Pembroke Pines cut travel expenses for employees, eliminated tuition reimbursement and shed capital expenditures. Now facing a $12.6 million deficit for the 2008-2009 fiscal year, city commissioners are considering cutting up to 49 positions, and raising firefighting fees from $153.48 to $223.

"I think we handled last year's budget responsibly," said commissioner Angelo Castillo, explaining why the city received just a few complaints."This year, fees will have to go up because we can't subsidize them with tax dollars any more."
Conversely, Weston anticipates a smaller hole in the upcoming budget: about $1.4 million, compared with $2 million for this fiscal year.

Weston cut its Fourth of July fireworks and holiday lighting displays.
Lori Schiller, president of the Fairways at Bonaventure Condominium Association, agreed with the decision. "I wish it didn't have to be, but somebody's got to cut someplace. I would definitely rather they cut the fireworks than police or firefighters."

Tamarac was one of the hardest hit this fiscal year. It eliminated 61 positions, and increased building fees and bus tickets for seniors and the disabled. The Caporella Aquatic Center was closed from December through February, and buses circulating through the city was cut from three to one. The city received about 10 complaints, mostly related to the reconfigured bus routes.

Trudging to the grocery store is all but impossible for Virginia Benacquisto, 73, who protested last year's cuts because she suffers from emphysema.
"We all depend on these buses," said Benacquisto, while holding an armful of groceries on the last remaining bus route. "We pay taxes and we need transportation."

For the coming budget year, no further cuts to the bus service are on tap, butthe city will likely raise its fire fee to $193, up from $141, to finance firefighter salaries and other costs, said finance director Steven Chapman.

Faced with a loss of $1.6 million in property tax revenue, Deerfield Beach this fiscal year halted financing for all but three city celebrations and began charging more for such programs as youth soccer and group swimming lessons. It also suggested a $1 cover charge for the Tuesday Night Beach Dance — and that provoked the largest outcry, although still only from a few callers, according to city figures.

"I don't think its fair," said Al Vialardi, 84. "City Hall should take care of it. I'm on a fixed budget."
Fort Lauderdale this year cut about $11 million by restructuring the pension system, freezing 60 jobs and directing maintenance crews to let the grass grow taller.

"Once residents saw that service levels didn't drop, we really didn't receive any complaints," said city spokesman Ted Lawson.
Fort Lauderdale resident Mel DiPietro said he doesn't trust what officials say about the budget.

"I remember [city officials] saying that city street maintenance would go downhill, and that safety services would be drastically reduced," said DiPietro, president of the Bermuda Riviera Association, which includes about 250 homes in Fort Lauderdale. "No one really saw that. So now if our local governments come out and say negative things in the future, why should we believe them?"


Henry B. Nathan is a Florida Licensed Realtor.
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