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Not so good news for homeowners.

With this week's mailing of tax notices by Property Appraisers in Florida, it becomes more and more evident that the Save-Our-Homes provisions will gradually be phased out and are already under attack.

This regulation protects the homestead-homeowner by preventing an annual increase in the assessed value of his property tax of more than 3 percent. It protected many homeowners from being suddenly hit by the doubling or tripling of home values during the “boom” years.

But, as many taxpayers found out this week, by a rather strange twist, the situation has changed. Even though the market value of your home has gone down, your tax bill could still increase up to a 3 percent every year. In effect the taxable value will be increased by this 3% until it reaches the actual market value. Does it make sense?

It does if you belong to our counties and cities government. Not so if you are trying to keep your home, maintain your life level, and raise a family.

Even though it is evident that real estate values have been sensibly reduced during the last year, assessments have gone up overall, perhaps because they are based on 2006 values.

The tax reduction was aimed at the “Tax Rate”, not at the” Assessment Value”, as property owners are starting to understand.

Basically the “Save-Our-Homes” protected-homeowner will get some relief now, since his assessed value will go up no more than 3%, while the tax rate could been rolled back as much as 9%, as mandated for this year by the legislators.

Any other property-owner will hardly get any break.

No relief for snowbirds vacation-home owners; no relief for investors, no relief for new home buyers.

Empty-nesters thinking of moving to downsize? Anybody remembers that story? It should have been one of the important parts of the “tax-relief” laws, but evidently our legislator forgot.

And, despite the “roll-back” provisions, taxes do not necessarily go down.

Remember the opt-out clauses for the cities? They are part of the legislature provisions. Cities can invoke the “tax-relief” op-out exception and just ignore the rollbacks. And a few cities have already taken advantage of the opt-out to ignore the tax relief laws.

At the same time, property taxes that pay for public schools haven’t been reduced. According to the new law, they can be and have been increased. And they count for almost thirty percent of your tax bill.

All in all, the “tax-break” is much less than most homeowners expected. The tax cuts are insignificant or just non- existent.

This is not what will revive Florida real estate.



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Beware the trap!

Questioning the new tax property laws.

Letting my thoughts settle down after the initial confusion, I come out with a disturbing conclusion.

1) Isn't this whole thing a first step to killing the "save-our-homes" amendment?

The fact is (if the January 2008 proposals are voted) that a homeowner will be dropping his "save our homes" rights if he takes advantage of the new "super-sized" homestead exemption.

Historically "save our homes" is the only amendment that protected the homeowner against local governments abuses in a consistent way. Are you going to believe that, from now on, cities and counties will start to behave and give you, the citizen, their upmost considerations ahead of their deep rooted bureaucracies, and free wheel spending?

2) In fact, after a few years of savings, the inevitable will occur. The initial savings will be wiped out by inexorable real estate valuation. Had you opted to accept the super-sized homestead exemption, you will pay for it later, take my word for it.

2) Wouldn't it have been fair to allow a homeowner to accept the new homestead super-sized protection and keep his "save our homes" privileges which allows the governments to raise their tax bill only 3% per year? Why eliminate this protection for the beleaguered first-time home-buyer struggling to afford a home?

3) That leads me to believe that the poison pill given to us has a hidden purpose:
slowly kill the "save-our-homes" provisions as present beneficiaries die, sell, or move out of their homes.

4) What about constitutionally prohibiting any property assessment to raise above the national inflation average? Isn't the inflation index a perfect gauge of keeping taxes and spending within a reasonable level?

5) As a matter of fact, I first thought that the new provisions were pathetic. Now I am starting to believe that they are mischievous.


I welcome your thoughts.
The only way to know if I am wrong is hearing it from you.


Henry B. Nathan
is a Florida Realtor
Please visit my website
http://www.condo-southflorida.com

Is this all?

Property tax relief by Florida Legislature falls short.

What did they vote?

1) Roll back property taxes to their 2006 level, and then cut an additional 0,3,5,7, or 9 % depending on how the specific cities raised their taxes the past 5 years - Local governments can override these rollbacks by two-third votes or a referendum.

2) A constitutional amendment will be submitted to voters on January 29th, 2008 to modify the homestead exemption. If approved, this exemption would be raised to 75% of the first $200,000 of home value and 15% of the next $300,000. It will be a minimum of $ 50,000 or $ 100,000 for low income seniors.

3) Beneficiaries of Save our Homes rule, have a one-time option to accept the new homestead exemption or keep their present benefits and limit their homestead exemption to their $ 25,000 level.

4) In the future, taxes cannot increase more than an indicator of personal income and allowances for new construction. How will that be calculated, is something that we ignore.

The comments:

Legislators are saying that the average homesteaded owner will get a $ 174 drop in his taxes for 2007 and a $ 1,132 in 2008 if the new homestead constitutional amendment passes.
The average non-homesteaded owner, will get an average $ 245 a year drop by 2008.
The average commercial property tax bill will be reduced by $ 1,240 in 2008.

Most Realtors are not impressed at all. This is not going to have any significant effect on the sagging real estate market. The issue will have to be addressed again down the road, said Richard Barkett, chief executive of the Realtor Association of Greater Fort Lauderdale.


What issues were not addressed.

- Snowbirds, investors, commercial property owners, will hardly notice any change in their tax bills. They are an important factor in Florida Real Estate, and they a good part of its downturn.
But they have been mostly ignored.
The owners of vacation homes, who have seen their taxes and insurance bills triple in a short time, are the big losers.

- The rollbacks, even if they reach their maximum of 9% will not solve the problems of property owners who have seen their assessments triple or quadruple during the last few years.
These reductions, compared to the tripling of tax bills during the last 5 years will hardly make a dent in the bills.

- The issue of the "portability" of the save-our-homes tax savings has not been addressed. A big disappointment for thousands who are trapped in their present homes, unable to purchase smaller or larger homes because their taxes would triple or even quadruple. Many potential buyers are very disappointed.

- The so-called relief of insurance premiums was just a hot balloon. They are still a huge factor in maintenance expenses of residences and commercial properties alike.

- If passed, the homestead exemption raise will be the only significant gain for low-income and first-time home buyers. A typical entry-level $200,000 home might pay a yearly average of $900 in property tax instead of the present $ 3,150: a saving of $2,250 or about $190 per month. That's good news for the affordable housing segment.

- A $ 500,000 homesteaded home would be taxed an average of $ 5,490 instead of $8,550 - a saving of $ 3,060 per year or about $ 250 per month. To pay the mortgage, insurance and maintenance of a $500,000 home, a combined household income of more than $ 150,000 per year is necessary, as per FNMA guidelines. That is at least $ 12,500 gross income per month.
A $ 250 break is a welcome relief, but will not be the deal maker.

- In essence, the real issue of local governments skimming their constituents during the real estate boom has largely been ignored. Rolling back a maximum 9% will not recoup the 300% tax increases that have beaten up our home buyers and non-homestead owners.
Real estate is a very large part of Florida's economy. It could not remain ignored. Something has been done, it is true. I would say that it's mostly a kind gesture to voters, not a solution.

- This is not going to be the shot in the arm that our real estate market was expecting. However, it will provide a minimal relief, and,hopefully, just a first step in the good direction.

- The proliferation of cities and municipalities in South Florida is an issue that must be addressed. Hundreds of commissioners, city managers, city compliance officers, city water managements, unnecessary bureaucracies, police departments, fire departments, almost encroaching on each other, are weighing on the taxpayer. This is not the most sensible approach to government economy. It is not bordering the ridiculous: it is laughable.

Trying to control this insanity has caused the panic of these local governments and their heavy lobbying on state legislature to prevent major changes. Will they be held accountable?
Judging by the pitiful low percentage of voters on city elections, it won't happen any time soon.


Henry B. Nathan June 16, 2007






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As Market Cools....

As Market Cools, Home Buyers Seek a Way Out

Builders Face Lawsuits, A Rash of Complaints; The $266,000 Refund

By MICHAEL CORKERY and RUTH SIMON

The Wall Street Journal May 4, 2007

In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them.

Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits.

For some builders, the disputes are contributing to cancellation rates as high as 30% and writedowns in some markets. "People will go to great lengths to get out of a legally binding transaction," said Larry Sorsby, chief financial officer of Hovnanian Enterprises Inc. "They were willing to ride the real-estate boom on the way up, but some are not willing to ride it on the way down."

Newly constructed homes make up only about 15% of total home sales. But a wave of building helped fuel the run-up in housing prices during the real-estate boom, especially in Florida and California. As the marketstarted turning last year, prices on new homes and condos quickly stalled, then began dropping. That gave skittish buyers time to get cold feet.

Florida, a magnet for housing speculators in the boom, is ground zero for such disputes. The state long has been a boon to housing attorneys, some of whom are now filing lawsuits against developers.

One lawyer recently took out an ad in a Palm Beach newspaper reading: "Do you want your money back? Your contract for purchase of a new house or condominium may be illegal...To see if you are entitled to a refund, call us for a free consultation."

Typically, buyers of new homes and condos put down a cash deposit when they decide to buy, then pay the balance when the home closes and is ready to occupy. But condo buyers, in particular, have a lot to lose by walking away from their contracts because their deposits can total as high as 20% -- and some buy multiple units.

Consequently, some condo buyers are aggressively seeking ways to back out, said Brad Hunter, director of the South Florida region for Metrostudy, a residential real-estate market research firm. He expects more to do so in the next year as projects sold during the boom become ready for occupancy.

"If they can find some way in which the developer has not delivered according to the contract, they're using that as a way to get out," he said.

Dennis Freeman, an attorney in Aventura, Fla., said he is representing a family who bought a roughly $1.6 million condo in a waterfront high rise, expecting a private entrance. But, he said, the family has now learned that the door to the garbage chute, which is shared with neighbors, cannot be locked. "The privacy of my client's apartment has been lost," said Mr.
Freeman. He is suing to rescind the contract.

Mr. Freeman recently settled another case in which the developer agreed to return a $266,000 deposit to a condo buyer who claimed that the size of the pool deck and gym were smaller than the developer promised. Mr. Freeman said he was surprised by the settlement. "To me, it's a reach," he said.

Other disputes are more heated. Red Bank, N.J.-based Hovnanian, one of the largest builders in the U.S., currently is embroiled in one such dispute with buyers in Florida.

One of those buyers, Daphne Sewell, received three construction loans, totaling about $750,000, to buy three houses in Cape Coral and Lehigh Acres, Fla., in May 2005.

An administrative assistant in Broward County government, Ms. Sewell said she and her husband, a carpenter, earned $90,000 a year at the time of the deal and never should have qualified for their mortgages. She also claims a real-estate firm involved in the deal promised that it would find them tenants to rent out the houses. But the renters never materialized, her
houses are vacant, and two of her loans are in foreclosure.

"If I close on them I deplete my savings in two or three months," said Ms. Sewell. "It's worth the fight."

After she was served with foreclosure lawsuits by the lender, she filed a countersuit, which names the builder, First Home Builders of Florida, the lender and a real-estate firm that she alleges promoted the deal, claiming she was defrauded by an investment scheme that promised minimal risk. A lawyer for First Home Builders said his client denies any wrongdoing.

Hovnanian, which bought the assets and contracts to build homes from First Home Builders in August 2005, said it has not been served by Ms. Sewell's
lawsuit and that she took out her construction loans before Hovnanian bought
out the assets of First Home Builders.

Still, complaints like Ms. Sewell's are causing a major headache for the company, which says it is trying to help buyers close on the homes by lowering prices by as much as $100,000 while fending off allegations of fraud. Hovnanian took a charge of $175 million in over the fourth and first quarters related to the Fort Myers market, partly because it had to lower prices on the First Home Builders homes.

Mr. Sorsby, the chief financial officer, said many of these complaints are from regretful buyers trying to take advantage of a public backlash against the housing industry amid the subprime mortgage meltdown. "They are going to great lengths to paint somebody other than themselves the bad guy," Mr. Sorsby said.

In Alexandria, Va., real-estate attorney Beau Brincefield said he has settled roughly 50 contract disputes and has another "50 or more" in the pipeline. They include a case brought last year by more than a dozen buyers who had contracts to purchase homes from NVR Inc., a Reston, Va., builder that sells homes in 13 states.

Mr. Brincefield said the terms of that settlement are confidential. In general, he said, builders have agreed to lower purchase prices by as much as 35% or refund 25% to 100% of a would-be buyer's deposit. NVR declined to comment.

Mr. Brincefield said that in many of the contracts he's seen, "the remedies are very one-sided." These contracts allow the builder to retain the borrower's deposit or sue for damages if the buyer cancels, he said, but only allow buyers to get their deposits back if the builder doesn't meet its
obligations. In some cases, he said, builders may have violated the Interstate Land Sales Full Disclosure Act, which requires them to make certain disclosures and meet other requirements.

Some developers are not backing down. Ceebraid-Signal, a West Palm Beach developer of condominiums and condo-hotels across Florida, and its affiliated development entities are suing about 30 buyers who are trying to cancel their contracts. Ceebraid-Signal said it is citing a "specific performance" provision in its contracts requiring buyers to hold up their end of the deal and close.

"That's called chutzpah," said Marvin Moss, a lawyer in Aventura, Fla. He represents a client who did not want to close on a $375,000 condo because real-estate values had fallen dramatically since she put down her 10% deposit, from which she was willing to walk away, he said.

"This is to frighten people and force them to close," said Mr. Moss. "It costs a lot of money in legal fees to defend these actions." A couple of buyers hit with such lawsuits have backed down and gone through with the sale.

Said Richard Schlesinger, managing director of Ceebraid-Signal: "I don't think there is anything that we are doing that is inappropriate." "These are not situations where a woman bought a unit and she's now a widow and can't pay," he said. "These are people who don't want to close because they can't flip and make $100,000."

Henry B. Nathan is a Licensed Florida Realtor. Please visit my website to search for

the best real estate opportunities in Fort Lauderdale Condos, Miami Condos, Pembroke Pine Condos, Coral Gables Condos, South Beach Condos

Article by Jason Garcia, The Orlando Sentinel May 21, 2007


TALLAHASSEE - Local governments across Florida are spending millions of dollars lobbying the Florida Legislature this year as they battle efforts by lawmakers to slash billions of dollars in property taxes.

An Orlando Sentinel review of recent state records shows that during the first three months of this year, Florida cities, counties and school boards spent at least $1.7 million and perhaps as much as $4.3 million on lobbyists hired to influence the Legislature. Separate government districts and local government associations spent hundreds of thousands of dollars more.

Nearly three dozen Central Florida governments were among those pouring money into the lawmaking process, from Orange County and Orlando to Eatonville and Mount Dora.

The money paid for an elite roster of lobbyists that includes former lawmakers, governor's office aides and other insiders, many of whom were intimately involved in the property-tax fight that consumed the Legislature during its 60-day regular session this spring.

Lawmakers were unable to agree on property-tax changes and have been forced to schedule a special session beginning June 12 to tackle the issue again.

Critics call the lobbying efforts a perfect example of overspending by cities and counties that experienced a property-tax windfall during the state's recent real-estate boom.

"The fact is that all of these cities and counties -- for the most part -- have bloated budgets, and they've been spending taxpayer money over the last five years like drunken sailors," said Jose Cancela, co-chairman of the anti-tax group Floridians for Property Tax Reform.

Cities and counties, however, say lobbying is a necessary investment -- and that it isn't just about fighting property-tax cuts.

They say lobbyists help them compete for millions of dollars in state grants handed out for everything from sewer lines to road construction, as well as monitor the thousands of bills legislators debate every year, many of which have significant impacts on local governments.

"It's money well-spent," said Volusia County Chairman Frank Bruno, whose government spent from $50,000 to $70,000 on lobbyists in three months.

"Lobbyists are very important to keep us informed as to what the Legislature is doing. It also enables the Legislature to have our input," Bruno added. "Those folks up there cannot be operating in a vacuum."

Year-old disclosure law

The records released last week were made available under a year-old state law requiring Tallahassee's more than 2,000 lobbyists to disclose details about their fees. The reports must list each client who hires a lobbying firm and how much it paid. But the range is so wide -- from $1.7 million to $4.3 million -- because fees are reported in broad ranges rather than exact figures.

The first wave of reports covers Jan. 1 through March 31, or about halfway through the 60-day legislative session. They cover only contract lobbyists, not in-house lobbyists who are employed directly by a business or a government.

As they were a year ago, utilities such as cable, power and phone companies were among the heaviest spenders in the $20 million to $48 million of legislative lobbying expenses that were reported.

Records show that BellSouth, for instance, spent $800,000 to $1.1 million lobbying the Legislature. It and other telecom giants were battling cable companies for a measure designed to help phone companies break into the cable business. The Legislature approved the bill, and Gov. Charlie Crist signed it last week.

But the amount spent on lobbyists by local government is drawing particular attention in light of the property-tax debate.

The Sentinel's review focused on cities, counties and school boards, as well as related countywide agencies, such as sheriffs' and court clerks' offices. It did not include other local governments, such as hospital districts or airport authorities, or groups such as the Florida Association of Counties and the Florida League of Cities.

South Florida governments were the biggest spenders. Miami spent from $148,000 to $168,000 on more than a dozen lobbyists. Miami-Dade County spent at least $92,000 and as much as $122,000.

But Central Florida communities also paid handsomely for access in Tallahassee. Orange County Sheriff Kevin Beary's office spent from $30,000 to $40,000 on lobbyists. Winter Garden paid from $20,000 to $40,000.

Orlando spent from $10,000 to $40,000, while Orange County spent from $10,000 to $30,000. And nearly a dozen Central Florida governments spent from $10,000 to $20,000.

Is 'diet' needed?

For critics of local government spending, the lobbying expenses offer easy fodder.

"I think it's clear that, as tax reform does take place, [is] what they can cut first," said Senate Finance and Tax Chairman Mike Haridopolos, R-Melbourne, who has repeatedly said cities and counties need to be put on a "diet."

Still, local officials say that lobbyist spending, as ripe a target as it might be, is a crucial expense.

It's especially important now as lawmakers weigh property-tax plans that could slash billions of dollars from local government tax rolls, Orange County Mayor Rich Crotty said.

Crotty has warned that Orange County could lose as much as $150 million under some of the plans being considered in the Capitol, jeopardizing a host of local services and projects, including a $530 million plan to build roads, buy environmentally sensitive land and pave sidewalks.

"This session is the greatest example of why" local governments need lobbyists, said Crotty, a former state legislator. "If you're from Miami or Fort Lauderdale or Palm Beach or Orlando, you've got to have those eyes and ears there at all times."


Jason Garcia can be reached at jrgarcia@orlandosentinel.com or 850-222-5564.

Henry B. Nathan is a Florida Licensed Realtor. Please visit my website:

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Florida Real Estate, Hollywood Condos, South Beach Condos

Do we really care about our money?

Do we really care about where our tax money goes?

I have found this article by Michael Mayo, from the Sun Sentinel to be very illustrative about why the tax reduction talk might mostly end up in…talk. Budgets have grown so fat that, unless citizens’ action occurs promptly, cities and counties will strongly resist before allowing any tax reduction.

If a politician engineers an outrageous pay raise, it doesn't take long for citizens to snap to attention.

Funny, then, how the bigger, more outrageous things can slide along more subtly.

Such is the story in Hallandale Beach, where Vice Mayor Bill Julian's rescinded attempt to boost city commissioners' salaries from $20,500 to $75,000 triggered angry howls and brought camera-toting media hordes to City Hall last week.

"I feel like a leper. I'm public enemy No. 1," Julian said Monday. "I would have been better off getting an intern pregnant."

It's easy to go off on Julian, because he still doesn't get it. One minute he's apologizing for his "dumb" and "stupid" maneuvers, the next he's unapologetically detailing plans to push for a smaller raise, "maybe $6,000-8,000," in upcoming budget hearings.

But where's the outrage that the city's budget has gone from $68 million to $93 million in the past two years, a 36 percent increase?

Where's the outrage that the city has seen its cash reserves dwindle from $52.6 million in 2005 to a projected $30.3 million at the end of this budget year?

Where's the outrage that the current budget includes a discretionary $2.1 million fund for the city manager to hire outside consultants and additional personnel?

With one dunderheaded move, Julian has become the symbol for all that's wrong with municipal government: the bloat, the sense of entitlement, the sneaky tactics to bypass the public.

Julian brought up the proposal at an unrecorded lunch planning session last Wednesday, and it passed 3-2. But it didn't hold up to the light of day. On Friday, the commission unanimously rescinded the raise.

"Ethically, it was on the border," Julian said. "I didn't give the public a chance to give their input, and that's not right. I know it's not our money, it's the people's money. ... The way I did it gives the perception of deception."

He also did it at the worst possible time, with the Legislature poised to chop property taxes and local governments carping about the havoc it will wreak on essential services.

For all the heated reaction to the raises, the bigger issues behind spiraling city budgets often get lost.

One, involving future worker pension benefits, has been quietly playing out the past 19 months. Hallandale Beach has some 250 unionized city workers who haven't had a pay raise since October 2005, when their contract lapsed.

They are caught in the crossfire of a bigger battle with national implications. It's one that cities have to win for a semblance of budget sanity.

The city wants to change workers' pensions from a traditional "defined benefit" fixed pension to a riskier "defined contribution" 401K-type plan that most private sector firms now offer.

Representatives of AFSCME, the American Federation of State, County and Municipal Employees, are resisting.

"This is the future," said Assistant City Manager Mark Antonio.

But in the future, Julian's chutzpah is what people all over South Florida will remember, even if the scuttled raises amount to a drop in the fiscal bucket. I asked if he thought voters would forget by the time of his next election, in 2011.

"I think people should forget by the end of the month," Julian said. "What do they want to do, flog me on the City Hall steps? This is the first mistake I've made in six years. It's a big one. But at least I'm big enough to admit I did wrong."

Julian, a former thoroughbred trainer, was re-elected to a four-year term in March. He received 942 votes in a city of 18,442 registered voters. The city has about 35,000 residents.

"The apathy is unbelievable," Julian said. He said the commission switched from day to night meetings to accommodate the public, and "we still only get like three people in the audience."

No wonder these people feel they have a license to steal.

Michael Mayo's column runs Tuesday, Thursday and Sunday. Read him every weekday online at Sun-Sentinel.com/mayoblog. Reach him at mmayo@sun-sentinel.com or 954-356-4508.

Please visit my website: http://www.condo-southflorida.com/resales_2.php?id=0
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While Legislature fiddles around...

While State Legislature fiddles around, Floridians burn

People are starting to realize that easy promises won't necessarily be as easily fulfilled.

While State Legislature fiddles around, Floridians burn

Published May 6, 2007

TALLAHASSEE · Lower property taxes are on the way.

How do I know this? Because somebody hung a big sign in front of the lectern where our state's illustrious leaders spoke after the Legislature wrapped its regular session Friday afternoon.

The sign said: "Lower Property Taxes Are On The Way."

The sign also had a big arrow on it, pointing down, just to show how serious they were.

Beautiful. So now we know what became of the people who made the "Mission Accomplished" banner.

After the leaders congratulated themselves for a "phenomenal" session in which they did nothing about property taxes, they pledged to do something about property taxes very soon, at the special session June 12-22.

Then off they went to Happy Hour, backslapping and smiling all the way.

This didn't impress some people back home.

"All they do is talk," said Dolores Parachini, of Boca Raton. "There's no action."

"Last year they said they were funding a study," said Jim Demarest, a real estate agent from Fort Lauderdale. "I figured, OK, take your time, then come back and make something work. But now they've come back and said we need more time? Fool me once, shame on you. Fool me twice, shame on me."

The Legislature's performance gets them the silver medal in the Dunderhead Politicians of the Week event. Gold medal goes to the Hallandale Beach City Commission, for sneakily voting themselves a more-than-triple pay raise, to $75,000, before rescinding the move on Friday.

In the overall scheme of things, an extra six weeks to fix a broken and unfair property tax system isn't unreasonable.

The problem is there's no guarantee legislators will come up with a solution.

The other problem is that Florida's property tax system is just one of many wobbly legs on a teetering economic table.

The property insurance system that the Legislature allegedly fixed at a special session in January remains a mess, with homeowners still getting socked with big increases and cancellations.

Throw in higher rates for our dwindling water supply, higher gas prices and now possibly higher tuition rates at state colleges, and you've got a middle class on the brink of financial ruin.

"I came to Florida my whole life on vacation, and I couldn't wait to move here," said Parachini, who moved from Nutley, N.J., to South Florida four years ago. "Now it's become a place for millionaires."

Parachini moved to a condo in Boca Raton two years ago. She's been trying to sell her place the last four months. She has had no offers.

"My insurance has doubled the last two years," she said. "In New Jersey, the taxes on my house were high [$7,000] but I only paid $700 a year in insurance. Now it's costing me more to live here, and I only have a small villa."

As real estate values soared in the last five years, the property tax system has walloped recent home buyers and those with commercial, rental and vacation properties. It has also chilled families and seniors from moving into bigger or smaller homes because of the tax consequences.

The Legislature has been exploring ways to revamp the system, including creating new exemptions, expanding caps on assessment increases to all property owners, rolling back the amount local governments can collect, allowing full-time residents to carry tax breaks with them when they move and increasing sales taxes to replace lost property taxes.

Demarest is frustrated that the politicians couldn't reach a compromise sooner.

"It's not like this is a topic that came up at the last minute," said Demarest.

Before the session, Gov. Charlie Crist promised that property taxes would "drop like a rock."

On Friday, Senate President Ken Pruitt held up a rock. "It says patience on it," Pruitt said.

If this doesn't get settled soon, the only thing dropping like a rock will be their poll numbers. And Floridians will keep voting with their feet, straight out of the state.

Michael Mayo's column runs Tuesday, Thursday and Sunday. Read him online every weekday at Sun-Sentinel.com/mayoblog. Reach him at mmayo@sun-sentinel.com or 954-356-4508.

Henry B. Nathan is a realtor in South Florida.

Please visit my website: http://www.condo-southflorida.com/resales_2.php?id=0
where you can use easy and efficient tools to search for Florida Real Estate, especially condos
and Preconstructions
Hundreds of buildings' description, preconstructions projects, or condo conversions.
Or you can conduct your customized search

Condo Business in South Florida

Condo Business in South Florida

Condo Questions you haven't asked

Condo Questions you haven't asked.

Are you sure that you want to buy a florida condo rather than a house?
Let’s talk about the advantages.
- You can lock the apartment’s door and travel to Paris or Disney. If you own a house, it becomes a small project. Who’s going to take care of the lawn? And the pool? And what if there is a leak while you am away? Or somebody tries to break in?
-You just pay the condo fees and that takes care of the insurance, the landscape, the pool, and the repairs. No more of these pesky bills.
-You will possibly meet more people in the elevator or just sitting at the pool. You can make more acquaintances and social life can be better in a condo building.
-There might be a nice gym and it’s so convenient to just go downstairs instead of taking the car!
-A problem? Just call the condo management or the maintenance man.
-They have this nice clubhouse, where you can just relax or watch TV while you talk to one of your neighbors.
-Security is not a big concern if your condominium has implemented some kind of 24-hour surveillance.
On the other hand…
-These condominium fees are really high! The pool service at your old house cost about seventy dollars, and if you didn’t want to do your own lawn work, the landscape wouldn’t be more than a hundred dollars a month. Repairs? You mean fixing the fence every ten years? Or the pool pump? That doesn’t even come close to all these payments the condo association is bleeding you every month.
- Parking is a hassle. Going through the entrance gate, park the car, take the elevator! If it was a house, you just park anywhere and you’re home.
- You have 2 grown-up kids and 3 cars. There is only one parking place per apartment. Guess who has a big problem?
- You would like to make some minor changes in your condo and the homeowners’ association doesn’t want to hear about it. There might be an old lady who is so intrusive and mean in the board of directors…
- When you moved in, you didn’t know that this building was falling apart. You just got an “assessment” for “elevator repairs” which will increase your monthly payment by more than 50% the next 18 months!
Evidently, you forgot to ask some questions. Let’s see:
- You had the right to go through the condo association documents. But you didn’t do your homework. You could read some of the board’s meetings minutes. You would have found out that some major repairs had been postponed for a few years.
-You would have found out that the Association’s reserves hadn’t been kept at a reasonable level. Remember that, the older the building, the larger the reserve. You were so happy that the monthly maintenance fee was low. Did you suspect that they weren’t putting aside enough funds to cover the unavoidable roof repair, or the air conditioning’s old age?
Or perhaps they were not maintaining the elevators adequately? Condo owners hate to see an increase in their monthly fee. A good measure of a well managed building is that a reserve fund is maintained for every item, taking into account its remaining life expectancy. And there are well established rules about how a reserve fund must be managed. So, if you had asked to see their budget, it would have made sense.
- Maybe you should have talked to some of your future neighbors and heard about their complaints. For example, you might have found out that a few owners haven’t paid their dues for a long time. And guess from which pockets the deficit is going to be covered. You would be surprised how often it happens. Any lack in the condo association funds will be covered by the rest of the homeowners.
- It wouldn’t hurt to have your lawyer examine the condominium papers and bylaws, to check about any inconsistency. At the same time let him check if there is or have been a lawsuit against the association; maybe by the condo owners themselves.
- Did you check if they allow pets? How many? What size?
-What about their policy about renting your apartment? Many communities restrict the rental of their units. They could have screening policies for prospective tenants. They could altogether limit or prohibit renting. If renting is allowed now, things could change next year. A condo association can change its rules at any time.
- In general, does this owners’ association behave in a rational and organized way? Ask around and make sure that they have usually been sound and balanced in their decisions, taken well care of the premises, and not tried to make life more difficult than it already is. There are more than a few cases when dictatorial boards became the condo owners' nightmare.
- Don’t forget to check the building insurance. See if it covers adequately whatever your own homeowner’s insurance doesn’t. Usually it should include coverage of what is outside your apartment’s walls. Check their hurricane coverage if it’s the case. Check their coverage for unexpected code non-compliances that force the building into costly expenses.
I don't mean to scare you. I have only mentioned the worse-case scenarios. Condo living is usually very pleasant and there are lots of advantages in making this choice.
You just have to choose the right place.
My name is Henry B. Nathan and I am a Realtor specialized in Florida Condo I am multilingual and part of my cliente is composed by foreign nationals. Immobilier Floride is how Florida Real Estate is called in France.



Please visit my website: http://www.condo-southflorida.com

Property Taxes and Home Affordability in Florida

Property Taxes and Home Affordability in Florida.

Impact of property taxes on homeowners in Miami and South Florida.

By: Henry B. Nathan

A key factor in the present Florida real estate troubles is home affordability. Many other issues exist and can be considered part of the normal market fluctuations. However, affordability is invariably the essential element.

Comparisons of Home Prices and Family Income in 1980 and 2005

Let's use Miami-Dade's median home price and Florida's median family income statistics for this purpose.

Median Home Price in 1980 - $75,000.

Median Home Price in 2005 - $372,000.

1989 Median Family Income in Florida = $ 21,355.

2005 Median Family Income in Florida (estimated) = $60,000.

Increase of Median Family income in the same period = 181%.

Increase of Median Home Price between 1980 and 2006 = 396%.

Note: These figures have not been fully verified. They have been taken from different sources, and could reflect some inaccuracy. They are used to graphically explain a tendency, and only in this context, will they serve the purpose of this essay.

Average property tax for new buyer (including Homestead exemption) in 1980: $ 850.

Average property tax for new buyer (including Homestead exemption) in 2005: $5,899. (Approximate figures)

Homestead exemption grants a $ 25,000 deduction on the home assessed value for homeowners who qualify and register with their county appraiser.

What is Save our Homes?

In 1992, Florida voters approved an amendment to the Florida constitution that limited the amount of value a homestead property could increase for tax calculation's purposes.

The law limits assessment increases to 3% percent or the increase of the Consumer price Index - whichever is less.

Non-Homestead property is assessed at the full market value annually.

Home Affordability as considered through FNMA guidelines

$36,588 Minimum Yearly Income, as per FNMA guidelines, was necessary to cover Median Home purchase in 1980, assuming 90% financing @ 12.5% annual interest, 1% insurance annual rate, (PITI= $854). Note the very high interest rates prevailing in the 80's.

(PITI = Principal + Interest + Taxes + Insurance)

$134,086 Minimum Yearly Income as per FNMA guidelines, was necessary to cover Median Home purchase in 2005; assuming a 90% financing @ 6.5% annual interest, 1% insurance rates, (PITI=$3,152)

Roughly, FNMA basic guidelines require that no more than 28% of the buyer's gross income should be dedicated to pay for his monthly PITI (Principal + Interest + Taxes + Insurance).

To be noted is the dwindling affordability despite the fact that mortgage rates in 2005 were half of what they were in 1980.

Impact of Property taxes as compared to median home values in 1980 and 2005

Property Tax for new buyers as a proportion of median home value in 1980 = 1,133%

Property Tax for new buyers as a proportion of median home value in 2005 = 1.586%

The heavier burden is partly due to the decline of the homestead exemption as a proportion of home value.

The $25,000 exemption represented 33.3% of the median home value in 1980.

It represented a measly 6.7% in 2005.

Percentage of Median Family income dedicated to Home Property Tax in 1980 = 4%

Percentage of Median Family income dedicated to Home Property Tax in 2006 = 9,83%

However, this increase is only valid for new buyers in this market. The Save our Homes

Tax break unfairly burdens new buyers, vacation-home owners and investors, and protects Old Homestead Owners with the limitation to 3% yearly increase in their property taxes.

Fact: Even though Median Home Values have increased proportionally more than double the Median Family Income, and substantially increased the tax base, Counties and Cities, as beneficiaries of property taxes, have found their way to increase their mileage (or tax rate), further aggravating the cost of owning a property in Florida.

Do we fully understand the message that these irrefutable facts are sending to all parties?

To old homeowners in Florida: Do not ever, ever move from your house or condo. You will be punished by an unsustainable raise in property taxes, even if you downgrade to a smaller and more affordable home.

Do not try to add space, build or remodel. Every added square foot will be taxed at the full market value, because it would not be covered by the Save Our Homes exemption. You would be surprised by how much it could raise your tax bill.

To Owners of second homes or vacation homes in Florida: Congratulations, your equity has tripled in the last 10 years. Now, take your money and run. From now on, you are being hit with taxes three or four times higher then 10 years ago; while you are not taking advantage of schools and other infrastructure designed for permanent residents, you are paying the highest bills. Conclusion: Sell

To Investors who have held their property for more than 5 to 10 years. Congratulations; time to take your profits and find a better investment. Your tax expenses are 3 or 4 times what they were when you bought the property. You have tried to raise the rents you collect to cover your rising costs, but you have not been able to keep up to tax and maintenance fees increases. The fact is that renters cannot afford to pay a rent that would make sense for your investment.

To Investors who bought recently. Good luck. You have paid the high price. Your property taxes are high and relentlessly increasing. Your rents barely cover your taxes, maintenance fees and a tiny part of your monthly mortgage payments. The message: Cut your losses, sell and run... But this is the sticky situation of thousands of other "lucky" investors. As a last recourse, just try to rent it, take a monthly loss and hope for the best.

To New Homebuyers. Good luck. You are paying the highest prices. You are paying the highest property taxes. Your expectations of a quick valuation of your new home will have to wait for better times. Meanwhile, just clench your teeth, take the hit and hold on.

To Renters. You are already experiencing a strong pressure on rent prices and it will persist for some time. Your American dream of homeownership is being crushed and is almost unattainable now, but what you are paying in rent is almost a bargain. But expect progressive and unavoidable raises.

And the message that Florida residents are increasingly sending:

To Local Governments: You have been running wild with our dollars. You are fat and rich but you would not give up; you keep wasting our money and you keep increasing our taxes, and today you are the only beneficiaries of the real estate mayhem that is threatening our state. What about some legislature-mandated spending limits?

Correcting the problem:

Whoever is now a beneficiary of the Save our Homes taxation should not tolerate any intent to take away this privilege. After all, 3% cumulative annual increase (as allowed by the Save our Homes rules) is more than fair.

Cost of living has not on average increased more than this percentage during the last 10 or 15 years. So, why accept to be taxed on hypothetical sales value of your homes by greedy local government? We all know that county and city services have not improved in any way to justify three and four times larger tax bills.

Therefore, their expenses should have increased at the same rate as the national inflation rate. Unless they have chosen to mask their inefficiency at taxpayers' expense.

To the contrary, we can even argue that the mushrooming new constructions have already increased their tax base in such a way that the common homeowner should have expected a reduction in tax rates.

Legislators should better consider new regulation to transfer these Save our Homes advantages, when homestead owners switch properties of the same of lesser values. This would surely reactivate the real estate market.

There is no doubt that the present level of property taxes should face a serious examination in order to place them back at their historical levels, as a reasonable proportion of median family incomes, as opposed to their now almost confiscatory levels. I am talking about reduction of tax bills.

The present real estate recession is not due to circumstantial or accidental factors. There are deep economical reasons which can and should be corrected. Affordability of homes is part of our government responsibility and should be addressed accordingly. Unfair and abusive property taxes are one known issue and voters should put pressure on their representatives to correct it.

We are not talking about tentative and timid measures. I have heard of a motion to increase the Homestead exemption from $ 25,000 to $50,000. This will not solve anything. It would just be a symbolic and political step.

What about a real study of what 25 years of inflation have done to nullify the economical and social effect of this exemption? Shouldn't we roll it back to be the same proportion of basic home values as was in its original intent?

Wouldn't a $ 100,000 exemption be closer to reality? Wouldn't that help the first time home buyer achieve the American dream? Wouldn't that be a real injection of reality to our real estate market and our economy in general?

Affordable housing for Floridians is an urgent necessity. No doubt that million-dollars homes and condos have contributed to our economy, but will there be any economy left when working people start leaving the state because of unsustainable home values?

The "save our homes" laws have somehow protected a portion of our homeowners. However, they are an incomplete and unfair arrangement. A complete revision to maintain this protection and also protect new homebuyers, vacation home buyers and investors against abusive property tax increase would be welcome.

Of course, soaring property tax issue is not the only element in home affordability. Interests and financing costs, inflation, salaries, cost of building, land values, are also determinant factors.

But property taxes are a cumulative burden on the homeowner and they will haunt him year after year. It is time for local governments and our legislators to address this issue that is vital for the survival of our battered middle class.

Disclaimer: This article represents the personal opinions of the writer and are not related to any firm, association or business with which this writer maintains any kind of relationship.

Please visit my website:

http://www.condo-southflorida.com where you will find the most advanced tools to search for a home, or a condo, as well as review hundreds of preconstruction projects.
Our condo search tool will allow you to browse through many buildings in South Florida, and find all MLS listings for these specific locations.

What is mold? An introduction.

As a Real Estate professional, I have understood the importance of answering my customers’ questions about different related subjects. One of them is mold.

Molds are microscopic organisms that produce enzymes to digest organic matter. They are nature’s way of getting rid of plant and organic debris.

They reproduce through spores. They are basically fungi, as are mushrooms, mildews and yeast.

They are the essential part of the process of cheese making. Penicillin is originated in mold. So there is nothing wrong with them except in very specific situations: for example, when they get their way into our homes.

They usually begin growing when they find moisture on carpets, wood, paints, and insulation.

Excess moisture will build up from a flooding episode, high humidity, a leaky bathroom or a damaged roof. As soon as mold spores settle in a house, they feed on the moisture that they digest to grow.

Once mold spores settle in your home, they need moisture to begin growing and digesting whatever they are growing on.

How do they affect you? Mold spores, released into the air, will be absorbed through respiration or by skin contact to the affected area. They can also get in your body when you eat moldy food or by mouth contact after manipulating moldy materials.

For a healthy person, being exposed to common mold is not a great risk. People suffering from asthma, allergies, and lung diseases will aggravate their condition due to infections caused by molds. A common disease is caused by the mycotoxins, produced by molds. The effects can be respiratory, migraines, nausea, fatigues, cough and eye irritation.

Detecting mold:

Odors can be a first sign. A musty smell, added to white grows or clusters of black specks in damp locations are definitely something to worry about. But there are many cases of hidden mold that cannot be detected so easily. Try areas with water damage, or furnishing that have suffered from flooding or leaks. Places where warm and moist air has condensed on a wall, behind a headboard, furniture and closets. Kitchen, bathrooms, laundry rooms with high usage of water are the most suspect.

Fixing moisture and leakage problems in your house are the first step. Ventilation and good air circulation will help. Periodically aerating your house with fresh outside air. Use of air conditioning and dehumidifiers will definitely help.

Furniture against outside walls should be placed a few inches away from the wall

Verify that your bathrooms, kitchens and laundry rooms are ventilated with exhaust fans. Install fans if missing or damaged. Thoroughly clean or replace dirty or damaged carpets, curtains and upholstery immediately after a flooding incident.

If you attempt to clean mold, only do it if you are free of allergies or asthma. Even in this case, only do it in small areas and be careful not to stir and spread mold spores, which would only worsen the problem.

If the area is large, hidden under carpet or floors, between walls, you should definitely call a professional. If you do small cleanups, protect yourself with goggles, gloves, breathing mask. Ventilate the area by opening windows before starting. Seal off the area from the rest of the house to avoid spreading the mold spores. Cover ventilation grills. Remove your furniture to a clean area and inspect it for a later cleanup.

Bag and discard carefully all residues and moldy debris.

After cleaning, scrub all surfaces with mild detergent and warm water. If possible use a bleach solution.

Finally apply a borate-base detergent. Do not rinse. The surface will be protected from new mold. Borate-base detergent can be found in many stores. To finish, clean thoroughly the whole area, vacuum the floor, wash bed sheets and clothing that have been exposed.

Heavily affected furnishings should be discarded and replaced. If you decide to keep the least damaged, let them ventilate outside and check for remaining odors.

Watch during a few weeks for recurring odors or moisture.

This is just an introduction. You will easily find specialized professionals who can give you a more complete and educated advice on the subject. And it would be advisable to ask their opinion when buying an older home where you suspect that mold could be present.

Henry B. Nathan is a Realtor at International Realty Inc. - Please visit my website: http://www.condo-southflorida.com

Renting vs. Ownership. A changing Reality

Renting vs. Ownership. A changing Reality

by Henry B. Nathan

Most studies point to the fact that rising house values in metropolitan areas, are supported by low mortgage rates, and changing demographics.

One concern, however, is the growing gap between rental and ownership possibilities.
The real estate boom that has substantially increased house values, plus the inevitable rise of interest rates is affecting home-buying affordability.

There is a disturbing new sign: Rental looks suddenly like a bargain. There is a disturbing change in the usual pattern of rentals and real estate values moving in tandem. A few years ago, the monthly cost of renting a Florida condo was about 80% of the cost of buying it. This ratio has moved down to less than 60% in many cases. The fundamentals considerations between renting and owning are not close to what they have historically been.
Two things could happen to restore this ratio: Reduced home values or higher rents, or a combination of both. We are already seeing rents going up after years of stability. In many markets, the demand of condos is still strong and despite the large inventory of new construction, we have not seen rents dropping.
The cost of owning, however, is still going up, due to higher interests.

An alarming sign, though, could be the unusual amount of Florida real estate purchased by investors. A recent study by the National Associations of Realtors revealed that perhaps 25% of residential real estate was bought last year as an investment. This is much above historical ratios. Investors are betting on rents increase and price appreciation to go hand in hand. But that is not guaranteed and it is known that, in a declining-prices market, investors are more likely to sell than homeowners.


Salaries, on the other hand, have not kept pace with real estate values. And that could also mean pressure on expected increases in rents. However, except in a few metropolitan areas, and when we compare it to other countries, home affordability as a ratio between salaries and either rents or cost of ownership, is still favorable, although rapidly eroding.

What we have noticed is that the large amount of Florida Condo Conversions will certainly reduce the amount of rental units offered in this and that could be a factor in the near future.

Of course low mortgage rates have been a huge factor in the red-hot real estate market.
What will exactly happen to long-term interests cannot be predicted by most economists and will be an important part of the equation. But real estate has always been cyclical and this should be taken into account by all investors.

Henry B. Nathan is a Realtor at International Realty Inc. Please visit my website at:

http://www.condo-southflorida.com

I specialize in Condominiums in South Florida and I assist local buyers and sellers as well as foreign real estate investors.

 

Condo Conversions

I have been focused on condo conversions for a few months now.
Are they really affordable?
Do they represent a viable alternative for a primary home buyer?

The concept of converting a rental property into condominiums is not new. It could make sense for all parties, the financing bank, the rental properties owner, the new homeowner.

There was a period in the 80's (remember the Resolution Trust?)
when it was a great affordable housing alternative. And it was a product of the Real Estate crisis.
Today, condo conversions are have become again a very popular alternative.
The effects? From the tenants point of view?

Read what the Orlando Business Journal says about what's going on in that area.

"The shortage, the research firm says, has allowed the vacancy rate to fall to 4.2 percent and pushed the average rent in Central Florida up to $828 per month.
"The apartment supply will continue to diminish in 2006 as the conversion trend persists," says Kelly Reddecliff, apartment analyst for Real Data. "This will allow the occupancy rate to remain above 95 percent, and it could even reach 97 percent in the coming year."
Natalie Green, assistant manager at Silver Oaks Apartments on North Powers Drive in Orlando, says her one- and two-bedroom apartment community has held steady at 95 percent or higher occupancy for months.
With one-bedroom rentals ranging from $651 to $701 per month and two-bedroom rentals from $765 to $830 per month, the apartment complex never has a tough time filling vacancies.
"It's tougher and tougher for people to find an apartment for rent," Green says. "A lot of apartment communities are converting to condos all around us, and we are feeling the effects here at Silver Oaks."

Please visit my website:
http://www.condo-southflorida.com