Big changes to condo laws take effect today

ORLANDO, Fla. – July 1, 2010 – A massive condominium bill addressing everything from fire sprinkler retrofits to incentives for moving excess condo inventory is among the real estate-related legislation taking effect today.

“Legislators introduced more than 50 bills this session dealing with some aspect of condominiums and condominium associations,” says John Sebree, vice president of public policy for the Florida Realtors®. “At the end of the day, there was one – SB 1196 by Sen. Mike Fasano (R-New Port Richey). We worked hard to make sure this 103-page bill contained at least two of the many changes sought by Realtors: incentives for buyers of multiple condo units and repealing the requirement that individual owners carry hazard insurance.”

The “bulk buyer” provision seeks to stimulate condo sales by enabling investors to purchase condo units in bulk (seven-plus units) without incurring the legal and financial liabilities of the original developer. The hazard insurance provision repeals a 2008 law requiring unit owners to provide proof of insurance every year. If a unit owner failed to provide a certificate of insurance, the association was allowed to purchase insurance on the owner’s behalf and assess the unit owner for the cost of the insurance.

SB 1196 also specifies that:

• Florida law no longer requires owners to purchase individual unit owner insurance coverage, though it could still be required by lenders or through the Declaration of Condominium;
• Associations of condos over 75 feet high aren’t required to retrofit sprinkler systems;
• Lenders must pay more of past-due assessments on foreclosed properties;
• Associations may deny owners or occupants the use of common areas and recreational amenities when the owner is more than 90 days delinquent in paying financial obligations due to the association; and
• Associations may divert tenant rents to pay for delinquent assessments owed by unit owners.

Other laws taking effect today that impact real estate transactions or real estate practitioners provide that:

• Documentary stamp taxes on short sales are based on the purchase price, not on the amount of the outstanding mortgage balance. HB 109 by Rep. Evan Jenne (D-Fort Lauderdale) codifies into law a similar ruling in 2008 by the Florida Department of Revenue.

• Real estate and appraiser instructors and real estate school permit holders may serve on the Florida Real Estate Commission and the Florida Real Estate Appraisal Board under HB 713 by Rep. Ritch Workman (R-Melbourne).

• Home inspectors, mold assessors and mold remediators must be licensed by the state effective July 1, 2010. All applicants are required to complete a 120-hour course. But the Department of Business and Professional Regulation (DBPR) lacked authority to approve the course until July 1. Consequently, the DBPR says it won’t enforce the licensing requirements until July 1, 2011. Visit the department website [http://www.myfloridalicense.com/dbpr/pro/homein/happens.html] for details. On a related note, HB 663 by Rep. Gary Aubuchon (R-Coral Springs) allows these inspectors, as well as appraisers and real estate brokers and sales associates, to take distance learning courses to satisfy pre-license and post-license requirements. A grandfather clause allows some inspectors to get a license without taking the course, providing they’ve conducted at least 120 previous inspections over the past three years.

• More housing choices for individuals with disabilities. SB 1166 by Sen. Thad Altman (R-Melbourne) removes, among other things, a requirement that community residential homes for disabled persons be located 1,000 feet from each other within planned residential communities.

© 2010 Florida Realtors®

FROM OUR AFFILIATE - ELEMENT FUNDING

WHAT WILL AFFECT MORTGAGE INTEREST RATES for the week of June 28th 2010?

There was a lot happening in Washington this past week, so how will all of these happenings impact us and home loan rates, which are near all-time lows?

The Fed decided to keep the Fed Funds Rate at 0.25%, and also reiterated in its Policy Statement that economic conditions warrant keeping the Fed Funds Rate low for an “extended period”. The Fed Funds rate is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on, for consumer and business loans.

The Fed has to time very carefully any action or even hints of action on raising the Fed Funds Rate. If the Fed raises the Fed Funds Rate too soon, it could slow economic activity and cause a "double dip" recession”, however, if the Fed waits too long to raise the Fed Funds Rate, inflation could result.

The economic data recently reported (such as the weak Jobs Report and other reports showing inflation is tame at present) as well as the ongoing issues in Europe helped the “extended period” language to survive through another Fed meeting.

Congress did not pass the extension of the Home Buyer Tax Credit. Note: This extension was only going to be for people who were under contract by the initial April 30th deadline, extending their June 30th closing deadline to September 30th. The extension was part of the larger Jobs Bill, which included State aid and an extension of unemployment benefits for people out of work more than six months and the extension of the National Flood Insurance Policy – and would have added $33B to the deficit. Meanwhile, the National Association of Realtors is saying that up to 30% of homes that went under contract by the April 30th deadline of the Homebuyer Tax Credit will likely not close by the current June 30th deadline.

Friday is Jobs Report Day. Last month’s Jobs Report showed 431,000 jobs created in May. While on the surface this seems positive, the number was below expectations and also was primarily made up of temporary census workers…who will once again join the ranks of the unemployed when the 2010 Census has been completed. The Unemployment Rate did drop from 9.9% to 9.7%, but overall May’s Jobs Report was disappointing.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

FREDDIE MAC’s NATIONAL WEEKLY MORTGAGE INTEREST RATE SURVEY (Lagging Survey Data taken 06-24-10):

30 Year Fixed - 4.69% + .7dp

15 Year Fixed - 4.13% + .7dp