Move My Realty - Real Estate News

TALLAHASSEE, Fla. – June 15, 2007 – The end came quickly for the 2007 Florida Legislature’s special session on property taxes with an agreement that would give current homesteaders a choice between their Save Our Homes benefits or a new super-homestead exemption. The Legislature adjourned at 6:28 p.m. yesterday, with the House and Senate passing three bills – an immediate statutory rollback and cap of property tax rates, a proposed constitutional amendment creating a super-homestead exemption that, under the third bill, will be considered by voters on Jan. 29, 2008, in conjunction with the state’s presidential preference primary.

Under this two-step approach, the average homesteaded property should save 44 percent; the average non-homesteaded residential property and commercial/industrial properties should save 8 percent; the average tangible personal property tax savings should be 17 percent; however, with a new $25,000 exemption on tangible personal property taxes, FAR estimates that most Realtors will not have to file or pay any of this tax. The combined elements of the plan offer $31.6 billion in tax relief over the next five years, which is being touted by House and Senate leaders as the largest tax cut in Florida history.

“While the tax reform package passed yesterday is not perfect, it does begin to address some of the inequities in the system,” says John Sebree, Florida Association of Realtors®’ (FAR) vice president of public policy. “Realtors support rolling back property tax rates and capping millage rates in order to provide homeowners and businesses with some much needed property tax relief. We were disappointed that legislators were not able to come to an agreement on the issue of “highest and best use” and how property is appraised. The legislature has pledged to work on this issue with us to secure additional relief.”

FAR issued two Calls-to-Action – one targeted call during the special session and one at the conclusion of the regular session in May – to pressure lawmakers into significantly reducing Floridians’ property tax burden. In all, about 30,000 Realtors actively lobbied their representatives.

Overview of property tax reform

Step 1: The two steps operate independently and cut taxes in different ways. Under step one, all cities and counties are required to cut taxes in the upcoming 2007-2008 fiscal year to 2006-2007 revenue levels. After determining that level, each county government must then cut an additional 3 percent, 5 percent, 7 percent or 9 percent. Cities’ property tax cuts are similar.

The specific amount each local government must cut depends on a formula. Residents of counties in which property taxes have risen the most will see the greatest savings. The bill also mandates yearly limits on tax increases. Local governments may increase tax revenues over time only by an amount based on local increases in personal income and new construction.

However, local governments are still allowed to override the proposed cut and caps, with the method – supermajority vote, referendum, etc. – for override approval depending on the magnitude of the change.

Step 2: To amend the Constitution, voters will be asked to replace “Save Our Homes” and the $25,000 homestead exemption with a new super-homestead exemption in January’s election. However, a last-minute agreement on the amendment allows homeowners to choose their tax, and those who save the most under the Save Our Homes amendment – generally long-time owners – may stay with that program as long as they remain in the same house. Amendment passage requires approval from 60 percent of voters.

The exemption has two tiers:
Tier 1: Homestead property will receive an exemption of 75 percent of the first $200,000 in value of the home; or, put another way, a taxable value of $50,000. The minimum exemption is $50,000 per homestead.

Tier 2: In addition to Tier 1, homestead property will obtain another 15 percent exemption for the next $300,000 in value. A $350,000 property, for example, would have a taxable value of $177,500 – $50,000 on the first $200,000, and $127,000 on the additional $150,000.

After the Legislature disbanded, Gov. Charlie Crist, who made lower property taxes one of his campaign issues, offered praise for the series of bills. “We’ve got half of it,” he said, referring to the fact that voters must still approve the second step of the plan. “Now the people get to finish the job. It is power to the people to bring about this largest tax cut in the history of Florida.”

© 2007 FLORIDA ASSOCIATION OF REALTORS®

NAR releases latest legal liability survey

WASHINGTON – June 15, 2007 – The National Association of Realtors® (NAR) has just released the results of the most comprehensive study to date of legal issues and trends in the real estate industry.
 
The historical data in the 2007 NAR Legal Scan is based on research of court documents, states, regulations and jury verdict reports, involving 655 court cases and 112 statutes and regulations. The study contains an appendix listing each case, statute and regulation with full legal citation by issue and jurisdiction.

“This latest legal scan is our crystal ball to a better understanding of key legal issues and trends affecting the real estate marketplace, and gives a wealth of information on agent and broker liability,” said NAR’s General Counsel Laurie Janik. “The study covers issues including agency, fair housing and disclosure laws, and will help members better understand and plan for legal pitfalls and compliance requirements they may encounter.”

The complete study has been published electronically on NAR’s member Web site and is available at no charge to NAR members.

The survey was prepared for NAR’s legal department with assistance from Legal Research Center Inc. of Minneapolis, a leading legal research provider. The newly updated study, which will help Realtors reduce legal costs, is the sixth in a series dating back to 1996, and tracks historical data regarding 86 legal liability issues faced by real estate professionals.

“This updated survey allows members to quickly check and print out for their attorneys the relevant cases or legislative actions that offer guidance regarding new cases and will help members save time and money on legal costs,” Janik said.

Some key findings of the survey include the following:

Agency issues are among the most common types of real estate legal dispute.

Another major area of disputes is that of property condition disclosure, especially mold and structural defects.

Technology issues are growing in importance, especially with respect to privacy, spam and other forms of electronic solicitation.

Subject areas where future training will be vital include agency, disclosure, technology, antitrust, and real estate settlement procedures.

In addition to the basic survey, NAR, in partnership with its affiliated Institute for Real Estate Management, has also published a survey of legal issues specific to real estate management. The principal areas of concern in the property management area include debt collection, accident claims, liability for tenants’ property conditions and conditions of common areas, and events occurring on managed properties. The 2007 IREM Scan is also available online.

Nearly 60 percent of cases involved premises liability, including falls and other injuries.

In 70 percent of cases with liability, real estate property managers were held not liable; 75 percent of these favorable outcomes did not require a trial.

Other important liability issues include new requirements for carbon monoxide detection and window guards, as well as issues of lead, mold and problems associated with presence of laboratories capable of producing methamphetamine.

Increased emphasis will be placed on fair housing aspects of property management in the future.

© 2007 FLORIDA ASSOCIATION OF REALTORS