Uniform Commercial Real Estate Receivership Act Is NOW THE LAW IN FLORIDA

The Uniform Commercial Real Estate Receivership Act (hereinafter “UCRERA”) became law July 1, 2020, marking a new era for Florida courts.

“Of course, this couldn’t have been anticipated, but with the economic fallout from COVID, and all the closures, the first thing that will be effected when people stop paying their rent is commercial real estate.”

Florida is one of only nine states that have adopted UCRERA since 2017.

UCRERA creates a process for state courts to appoint a receiver in disputes that arise over commercial real estate, typically a default. Once appointed by the court, a neutral receiver can manage an asset and prevent it from falling into disrepair.

Florida judges have the power to appoint receivers, but before UCRERA, there was no statute that addresses the process for commercial real estate disputes.

HB 783 and a companion, SB 660 by Sen. Lori Berman, D-Boynton Beach, passed both chambers unanimously.

For more questions regarding your Commercial Real Estate investment, call Gulati Law today!

Source: Florida Bar Article

Prepare for Hurricane Season- Helpful Tips!

Please utilize the resources below if necessary. I also encourage you to share this information with your friends and neighbors as we work together to recover from this storm- Hurricane Michael.

FEMA ASSISTANCE

To apply for FEMA assistance visit: www.disasterassistance.gov or call 1-800-621-FEMA (1-800-621-3362) TTY: 1-800-462-7585. To find the nearest FEMA Disaster Recovery Center visit: https://egateway.fema.gov/ESF6/ DRCLocator

EMERGENCY ASSISTANCE

If you need emergency help call 9-1-1.

BASIC SUPPLIES

If you need supplies, such as food, water, or ice, please contact your county emergency management at: http://www.floridadisaste r.org/fl_county_em.asp or by phone at (850) 815-4001 for the location of the nearest distribution center. Your county emergency management can provide up-to-date information about shelters and local distribution centers for food and supplies.

HELP FOR SENIORS

If you know of a senior who needs assistance call the Florida Department of Elder Affairs hotline at 1-800-96-ELDER (1-800-963-5337). To report elder abuse, call 1-800-96-ABUSE (1-800-962-2873).

HELP FOR VETERANS

Veterans in need of assistance or in need of their medication can contact the Veteran Disaster Hotline at 1-800-507-4571 or go to any VA medical facility for assistance.

MENTAL HEALTH

If you or someone you know is experiencing emotional distress please call the Disaster Distress Helpline at 1-800-985-5990 or text TalkWithUs to 66746 to connect with a trained counselor. You may also visit: http://bit.ly/2vH2Huc for more information about managing stress after a disaster and talking with children about traumatic events.

DIALYSIS

To find a dialysis center in your area visit: http://www.dialysisunits.com/. Patients of DaVita Dialysis may contact 1-800-400-8331 to find the nearest Dialysis Center.

MORTGAGE RELIEF

To find out if you qualify for temporary mortgage relief, visit the Freddie Mac website at: http://www.freddiem ac.com/about/hurricane-relief.html , the Fannie Mae website at:http://www .fanniemae.com/portal/about-fm/hurricane-relief.html or by phone at 1-800-2FANNIE (800-232-6643). To contact the Federal Housing Finance Agency visit:https://www.fhfa.gov/Homeownersbuyer/MortgageAssistance/ Pages /Disa ster-Assistance.aspx

You may also contact the Department of Housing and Urban Development (HUD) to find out if you qualify for any hurricane related help with your mortgage or mortgage insurance. To contact HUD about disaster assistance visit: https://www. hud.gov/program_offices/housing/sfh/ins/203h-dft or https://www. hud.gov/program_offices/housing/sfh/nsc/qaho0121

TAX RELIEF

Taxpayers in affected areas may be eligible for tax relief from the IRS. To learn more about IRS assistance visit: https://ww w.irs.gov/newsroom/tax-relief-in-disaster-situations.

DISASTER RECOVERY LOANS

The U.S. Small Business Administration is providing various disaster loans to qualifying Floridians. For more information about SBA disaster loans visit:https://www.sba.gov/disaster-ass istance/. The U.S. Department of Agriculture provides loans to qualifying individuals, businesses, and communities after disasters. For more information visit: https://www.usda.gov/topics/d isaster/storms, or contact the USDA office in Florida at: (352) 338-3400.

DISASTER UNEMPLOYMENT ASSISTANCE

Floridians who are unemployed as a result of a disaster, and who are ineligible for regular state unemployment insurance, are encouraged to apply for Disaster Unemployment Assistance (DUA) through the U.S. Department of Labor. For additional information about DUA visit: https://workfo rcesecurity.doleta.gov/unemploy/disaster.asp or contact the U.S. Department of Labor by phone at 1-866-487-2365.

HURRICANE RESPONSE HIRING

The U.S. Small Business Administration is hiring a variety of temporary positions located throughout areas affected by recent disasters. For more information visit:https://www.sba.gov/disaster-assistance/hurricane-response -jobs -sba< /a>. For FEMA hiring visit: https://careers.fema.gov/hur ricane-workforce.

FEMA ASSISTANCE

For in-person assistance with storm related questions, visit your local FEMA Disaster Recovery Center. For a list of centers in your area visit: https://egateway.fema.gov/ESF6/ DRCLocator or call 1-800-621-FEMA (1-800-621-3362) TTY: 1-800-462-7585.

Be aware of SCAMS: Federal and state workers never ask for or accept money, and always carry identification badges. There is no fee required to apply for or to get disaster assistance from FEMA, or the State of Florida. If you suspect fraud call FEMA’s Disaster Fraud Hotline at 866-720-5721, or the Florida Attorney General fraud hotline at 1-866-966-7226.

RESOURCES

Emergency Assistance 9-1-1

Local resources (food, shelter, childcare,) 2-1-1

Food, water, ice distribution https://www.floridadisaster.org/, 850-815-4001, TDD/TTY: 1-800-226-4329

County Emergency Management Offices https://www.floridadisaster.org /counties/

Shelters www.floridadisaster.org/sh elter-status/

Florida Highway Conditions: www.flhsmv.gov/f hp/traffic/live_traffic_feed.html, or dial 5-1-1 or *FHP (347)

Florida Elder Affairs Hotline 1-800-96-ELDER (1-800-963-5337)http://elderaffairs.state.fl.us/

Veteran Disaster Hotline www.va.gov, 1-800-507-4571

Disaster Distress Helpline (for emotional distress) 1-800-985-5990, or text TalkWithUs to 66746

Blue Tarp Roofs (Army Corps of Engineers) 1-888-ROOF-BLU

FEMA www.disasterassistance.gov, 1-800-621-FEMA (1-800-621-3362) TTY: 1-800-745-0243

Source: BILL NELSON OFFICES IN FLORIDA

Putting Your Real Estate in a Florida Land Trust

A Florida land trust is a method for holding legal title to real property. The beneficiary owns the Florida land trust, has power of direction over the trust, and has control over the property that is in the trust (the person creating the land establishes the land trust and is often one of the beneficiaries). The trustee holds the title to the property for the benefit of the owners or beneficiaries.

There are two steps to putting your property in a Florida land trust (Consult your Florida Real Estate Attorney for assistance):

  1. Deed in Trust; and
  2. A Florida Land Trust Agreement.

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Below are some of the benefits of a Florida Land Trust:

  1. Allows for the private transfer of property – your name is not recorded in the public record like most property transactions
  2. Limits liability – trustee is free from liability, therefore you can allow for a corporation to be the beneficiary and then limit personal liability as trustee
  • Property held in land trust is also not encumbered by judgments made on beneficiaries
  • Work with your Florida Real Estate Attorney to structure your trust to best avoid personal liability
  1.    Avoid probate
  • It is common for land trust to be considered a “will substitute”
  • Contingent beneficiaries are mentioned in the trust
  • No Florida Documentary transfer tax is due when transfers are among beneficiaries (this is on a case-by-case basis).
  1.     Improves efficiency in transactions with multiple buyers or owners
  • Allows for only the trustee to sign documents to complete the transaction
  1.     Homestead Exemption
  • If beneficiary is a Florida resident, then trust may qualify for Homestead Exemption
  1. Tax benefits
  • No annual filing fees with state of Florida
  • No additional tax return or tax I.D.

There are a number of benefits associated with putting your property into a land trust. For example, Walt Disney actually acquired the property for Walt Disney World in Florida through the use of a land trust. This allowed for additional privacy, and reduced the chance that prices in the area would increase due to anticipation of Disney’s plans for the community.

Be sure to contact your Florida Real Estate Attorney to set up a land trust, as there are Florida Statutes that you must comply with. Your Florida Real Estate Attorney should draft a deed to the trustee, and a written land trust agreement. A disclosure form to the IRS must also be filed to note that the trustee is acting for the beneficiary, this is where you should get your Certified Public Accountant involved as well. Both your Florida Real Estate Attorney and Certified Public Accountant will work together in order to set up your asset structure.

Tips for a Smooth Real Estate Closing

After a long battle with research, applications, real estate agents, negotiations, and etc., the purchase contract has been finalized and you’re finally ready to close the deal. You will want to make sure that all documents and disclosures are in order and that nothing has been left out. We often see that all the formalities have been taken care of, but there is one page that was not signed, which could effect the binding contract.

Depending on what the contract states, your Florida Closing Attorney or Title Company will conduct a title search in order to secure the title and insure that there are no liens or “clouds” on the property upon the transfer of the Property. Lenders will usually require this anyway if applying for a home loan or re-financing.

As far as closing costs go, if you are financing your home, your lender will provide a good faith estimate which identifies all costs involved. Some expenses related to the mortgage or property itself are either prepaid or paid at closing, which must be prorated between the buyer, seller, and lenders at the closing. These expenses can include real estate taxes, utility costs, and condo assessments that are prorated between the parties. Be sure to clarify between parties what these pro-rations will be at the closing. Many times we see fees charged to the wrong party, make sure to consult your Florida Closing Attorney.

The current document that’s used to list all itemized payments and credits of the buyer-seller transaction is the HUD-1 statement. However, beginning in October of this year a standardized Closing Disclosure document will be implemented which will usually be provided by the lender for the closing. Currently, the most important documents to review during a closing are the Good Faith Estimate, HUD-1, and TILA/RESPA disclosure (Truth In Lending Act/Real Estate Settlement Procedures Act). However, these will be replaced by the Loan Estimate, Closing Disclosure, and Closing Settlement documents. Stay tuned for more information on this!

Florida Real Estate

What should you bring and what you should ask for at closing?

Make sure you bring two forms of photo identification. The closing agents involved usually require a driver’s license or some other form of government identification. Make sure that all keys and automatic garage door openers are transferred to the purchasing party (this includes mailbox, utility shed, basement keys, garage door openers, etc.). Handing over the keys to the buyer at the end of a closing is known as “delivering possession of the property to the buyer.” Which means the Buyer gets their keys and Seller gets paid for his home.

If you have any questions or concerns regarding the closing process, what is needed at a closing, or what information should be disclosed to you, please contact your Florida Real Estate Attorney today!

Tips For Purchasing A Hotel in Florida

Before looking under classified ads for hotels for sale, you must first start by having an idea of your needs and expectations for your new business. The location, appearance, and structure of the property will all affect how to choose to move forward with the purchase. Looking at the history of the business is a good place to start, as well as potential ways to make it more profitable for you in the long run.

Speaking with an experienced attorney will offer detailed information and advice about a specific property after you have gone through a preliminary process of consideration. Check out the location well before deciding to buy there. A hotel is unique in the sense that business can be affected by so many different factors. If it is on the coast or by a beach, you may only get bookings during certain months once a year. In that case you may count on seasonal income whereas in a big city or town, you will want to be near businesses that travel and year-round tourist attractions. Also be careful of locations that are overpopulated or riddled with competition.

Experienced operators have an advantage in that they have established repeat clientele and are usually well known. Make a list of questions to be answered when looking at hotels for sale. That way, if they don’t pass the checklist, they won’t be worth considering. This step could save you a lot of time if you know what you’re looking for. Some of these elements could include staff members, food service options, how many rooms or guests on average, tenant demographics, and the Unique Selling Proposition for that hotel.

Wyndam

Two key ratios that are important to note include the revenue per available room (revpar) and the staff costs to turnover. These numbers can help you calculate how profitable the hotel has been in the past and how much you will be making potentially. You can also ask current ownership on their approach with the hotel to see if  they have done anything new recently as far as management and/or renovations. The third major aspect of buying a hotel is the building.

It is necessary to first get a full survey and valuation taken, and also review the lease terms and conditions (if any) before moving forward with a purchase. Take a look at the physical condition of the rooms and public areas, making sure all fire and health regulations and codes are met. Check documentation for up to date licenses and everything you may need in order to make sure there is no more unfinished business on your part. A Real Estate Attorney can assist you by gathering all documents and information regarding the closing and offer any advice you may need for your new business venture. Contact us at Gulati Law and see how we can help you acquire a Florida Hotel!

 

Source: BizJournal

Pic Credit: Wyndham Hotels

Interested in Florida Real Estate Investment? Here are Some Tips!

Real estate investing can be an extremely rewarding process, but it can also carry some worth-noting risks.  Troubleshooting for these issues begins before the purchase takes place and continues throughout ownership.  Here are some tips to help get you started.

The thing to address first and foremost is the financial aspect.  Buying profitable real estate means investing in properties that are cash flow positive. Rentals should provide a fair rate of return on the invested equity.  Also make sure to secure long-term fixed rate financing. Financing or refinancing a property can end up costing you more in the long run or effect transfer issues.

real estate

When it comes to “fixer-uppers,” you may want to look elsewhere.  Projects that involve extra remodeling or renovations are very much likely to loose money in the end.  Estimating the cost of repairs can be difficult to the average buyer, except for construction contractors that have experience in such. Obtain experienced contractor opinions before you consider a “fixer-upper”.

Take an in-depth look through all title documents.  This includes the title insurance policy, title abstract, schedule of exclusions, and a survey of the property.  Schedule some time with an Florida Real Estate Attorney to assist you in going through all items in detail and addressing any issues before you go forward with the purchase.

Proper insurance should always be put into place for each specific property and circumstance.  Speaking with an experienced Title Insurance Agent will make it easier to cover all liabilities and reduce the chances of anything severely impacting your finances.

All areas touched on above are great places to start when considering a new real estate investment.  If you are relatively new to property investment, speaking with seasoned long-term investors and Florida Real Estate Attorneys may offer some insight into how to go about taking on a new project. At Gulati Law, we are able to work with you in all these areas. Contact us for more information today!

Source: Zillow Blog

New Laws Regarding Florida’s Durable Power of Attorney

Unexpected controversy has been exposed due to a Florida law enacted in October of 2011 regarding the Durable Power of Attorney (“hereinafter DPOA”).  Prior to the change in law it was possible to prepare a DPOA that became effective upon incapacity. However, the new law no longer allows the “upon incapacity” language, thus making DPOAs effective immediately upon execution. DPOAs that were drafted before the enactment have been “grandfathered” into the new law.

Power of Attorney

This has become an issue for many individuals, because banks and financial institutions are requiring all DPOA documents to be written in the new law due to recent economic recession and financial fraud.  These lending institutions are thereby disregarding the law that allows acceptance of DPOAs prepared before the new law.

This disregard is allowed through a statute in the law that gives banks the authority and time to review DPOAs to determine acceptance according to their own policies.  This can cause hardships for those with DPOAs with the old laws, especially those relocating from another state or country, and individuals already incapacitated or incompetent.

This issue could jeopardize the security of your future and you should not delay updating your DPOA. If you do not already have the new Durable Power of Attorney, consider working with us at Gulati Law to draft a new DPOA that is right for you and also compliant with Florida Law.

 

Source: Elder Law Answers

5% Down Payment on a Home Purchase will Not Last for Long!

In the past, it has been difficult for buyers to to get a mortgage without having a large down payment requirement.   Some available options this year and going into next are the Federal Housing Administration’s low down-payment program.  Now, banks like Wells Fargo, Bank of America, and TD Bank are offering as low as 5 percent in some mortgages to create an opportunity in the market and compete with FHA’s down payment loans.
TD Bank offers the “Right Step” loan with 5 percent down on mortgages and allows for 2 percent to be paid as a gift from a relative or third party.  Most of the banks now offering 5 percent mortgages are requiring borrowers to pay for Private Mortgage Insurance (PMI), and maintain mortgage and home insurance until there is 20 percent equity built up in the home.  FHA requires PMI for the lifespan of the loan.  To know what works best for you, research your options.
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Source: Money News

Sale Pending: Can I Still Make An Offer?

In the world of online real estate searches, it can be easy to fall in love with a house before realizing that the property reads “pending sale”. Many homebuyers see a listing and assume that the property is unavailable, when in actuality that may not be the case. “Sale pending” can mean a few different things depending on how the market works for your area.

Understanding the basic real estate transaction process helps to understand what exactly a pending sale means. When someone chooses to buy a home, they make an offer “contingent upon” certain factors. This can be the completion of a property inspection, a bank appraisal, or loan approval. If there is an issue with the inspection or the buyer cannot get financial backing, the buyer has a right to exit the contract. After an offer has been made, the buyer typically has about 3 weeks to get the inspection, appraisal, and the loan approval.

lisa-jones-sale-pending-orlando-001

Although the sale is not a “done deal,” the seller is not able to enter any agreements with another buyer while these processes are being completed. Another buyer, however, is able to submit a “backup offer.” A backup offer functions as a backup plan in case the first offer falls though and the transaction never takes place. Some listings classified as “sale pending” may include transactions where all contingencies have been removed. This means the buyer’s loan has been approved and both the inspection and appraisal have taken place. In this case, the only thing left would be to move toward closing. This may take up to a few weeks, and technically the sale is still pending.

Even though all contingencies have been removed, there is still a slight chance that  the buyer may exit the deal. The buyer will not become the owner until the property is closed and the deed is recorded. Until this happens, a buyer may still need to back out in a case of emergency or if they risk losing the earnest money deposit. Falling in love with a pending property may not mean a dead-end for you. Find out about the status of the property and whether or not it is possible to make an offer at this point. You may also want to find out more information such as if they buyer has had any previous inspections and if there have been any real issues thus far.

The best thing to do when a home you are interested in is pending is to put that property on the back burner and keep up your search. If you truly would like to pursue the home, make your interest known and find out the information you need. The only next step is to wait and see what happens with the current sale.

Source: Zillow Blog

Is Commercial Real Estate a Worthwhile Investment?

If you have been investing in residential real estate for some time now, you might have been considering commercial investments.  The absolute best way to get involved with investments is by doing research, getting advice, and contrasting the familiarity’s with some of the differences.  Knowing the pros and cons before getting involved in a big purchase can help you weigh your options and find out what is best for you.

One major difference between commercial and residential real estate is how the bank values them.  Commercial bank loans tend to require a higher down payment that can easily be more than 30 percent.  Check with your lending institution to find out if they deal with commercial real estate. We have a list of commercial lenders we have worked with in the past, just contact us today and we will be happy to provide them to you!

downtown-building-1285339-m

Commercial real estate offers the potential for increased cash flow and higher stability.  Renting out several spaces in a multi-unit property means more income, and the return is usually higher per square foot if you’re getting the full potential out of the property.  This can also mean less risk. If one of several tenants leaves, you will only lose a portion of the return.  Commercial leases offer steady income because they are also usually much longer in duration.

As with both residential and commercial investments, it is always important to ask questions and do your research.  There are many parts to look into when purchasing commercial real estate specifically.  Some of these include questions about former management, lease renewals, population income, and the seller’s cash flow statements, among others.  See our Top 10 Do’s and Don’ts of Purchasing Commercial Real Estate- click here.

Source: Entrepreneur Article 

 

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