Q: Is it true that Homeowner, Condo, and Co-op associations must have reserve funds?

A: Florida law requires that the association budget include a reserve fund for capital expenditures and deferred maintenance. If an association does not want to have a reserve fund a majority of the owners within the association must vote and agree not to have one. Items typically included for the fund are roof replacement, paving, and exterior painting.

Q.: How do I find out my rights as a owner in a Condominium Association?

A.: Condominium owners across Florida can go to www.myflcondo.org to learn their rights and responsibilities, file a complaint against their condo board or ask questions.

Florida Condo Ombudsman Virgil Rizzo, whose office was established last year to handle disputes between condo owners and boards and to push for new state laws, created the Web site. However, residents of communities ruled by homeowners associations do not yet have such an outlet.

Q: I have two months left on my current lease. I have been hearing that my rental apartment buildings are being converted to condominium ownership. I am concerned since we have a new owner of the building who has purchased apartment buildings and is converting them to condominiums. Will I have to move suddenly? If the building goes to sale as condominiums and someone purchases my unit, what happens if I have a lease that runs past the closing date? What are my choices on breaking the lease at the time of closing? Last week the new owner's management company offered a new one-year lease to be signed by me at the time of closing. Could I leave or must I stay?

A: Since your lease is expiring in two months, you have the option of leaving then or accepting the new owner's offer of the one-year lease. It appears that the new owner is not planning an immediate conversion of your apartment building to condominiums as they offered you a one-year lease. That new lease must be honored not only by the new owner that signed the lease with you but also any future owners whether the building is converted to condominiums and sold unit-by-unit or the entire building is sold as an apartment building. It is really up to you whether you want to just stick with the current lease for the next two months and then leave or if you will accept the new 12-month lease signed by the incoming owner that legally protects you for at least 12 months of occupancy. Another factor to keep in mind is that many owners are required to give extended notices or even moving allowances to current tenants when apartment buildings are converted to condos, plus you may have an opportunity to purchase the unit yourself if it is converted to individual condominium units. Often these units are available under favorable terms as the condominium converter can pass along some of their savings in marketing and commissions if they sell to the current tenants.

Q. Can a seller revoke a counter offer before the buyer has accepted it where the counter offer gave the buyer three days to accept?

A. Yes, unless the seller’s counter offer specifically stated that the offer was irrevocable for the three days (most don’t).

Q. I am in the process of buying a new home on land that was previously owned by the federal government. The land was given to our local government that sold it to a developer, do I really need to pay for an owner’s title insurance policy.

A. Yes you do, if you don’t obtain this policy if any of the title transfers were faulty, you risk losing you home equity. Also, if the developer incurred any unpaid liens those liens could attach to your new home. Not buying title insurance policy is a bad idea because there are so many unexpected title risks that could cause you a financial loss. Since mortgage lenders insist on title insurance, so should you.

Q: Can my Mother claim my Father’s home sales exception? My father died this year and my mother wants to sell their home and buy something smaller. Does she still have the right to use my father’s $250,000 home sales tax exemption? If she does, how long does she have?

A: When your mother has straightened out the title for the house and removes her husbands name so she holds title only in her name alone she can sell the house. If she sells it in the year of his death, she can claim up to $500,000 tax-free principle residential profit. That is if they both occupied it at least two of the five years before the sale. But, if you mother waits until the next year to sell, then she will only receive a $250,000 single principle residence sale tax exemption. This is not all that bad. The reason is after your mother receives your late father’s share of the house, she will receive a new stepped-up cost basis as of the date of his death for the inherited half of the house. If the house is in a community property state, and if your father left his half of the house to your mother, the house’s entire market value is stepped-up to market value as of the date of your father’s death. Either way the taxable capital gain is very low. She really should discuss this with her tax advisor to understand all the rules in the year of your father’s death. Good luck and I hope this helps.

Q: How does the Save Our Home Legislation reflect in the property taxes on the Palm Beach County tax records?

A: Tax Records for Palm Beach County work like this: The Total Assessment represents the Property Appraisers appraised value of the property (Land plus Buildings). The Taxable value represents the maximum taxable value of the property under the Save Our Homes Legislation (for Homesteaded properties) less any exemptions for the property. Upon sale of a property, the Save our Homes value is no longer pertinent and new owners can assume that the new taxable value will be the Total Assessed value less any qualifying exemptions for which they qualify.

The Save Our Homes Legislation allows for a maximum of 3% increase annually of Taxable value regardless of properties assessed value increases as long as the property is homesteaded.

Q: We have signed a contract to buy a house in Florida. Before we signed the agreement, there were two refrigerators in the house: one in the kitchen and the other in the garage. We were told that both refrigerators would stay with the property. Closing is scheduled for next week, and now we have been advised that the garage refrigerator will be removed. I do not understand when a refrigerator is a fixture and when it is not.

A: One easy way to avoid this type of problem is to always ask for a sellers disclosure that relates to all aspects of the property and have all items that you want to include in the contract clearly stated within the contract. Generally speaking, and in the absence of a contractual agreement to the contrary, fixtures remain with the house. Personal items can be removed by the seller. When real property is involved, verbal statements will generally not be admissible in a court of law. The stakes are too high, and there can be a lot of confusion, when the parties do not reduce their promises and their commitments to writing. Be on the safe side: put everything into your written sales contract and have it signed by the buyer and the seller.

Q. I want to buy a home and I am in the process of a divorce which is not yet final and the lender insist that my soon-to-be former husband must sign the mortgage agreement, why is this?

A. The mortgage agreement gives the lender the right to foreclose if the borrower defaults on the loan. However, a spouse who hasn’t signed the mortgage agreement may be able to assert homestead rights, making foreclosure difficult. Therefore, if property could be considered the buyer’s homestead, most lenders require the non-owning spouse to sign the mortgage agreement for the sole purpose of waiving homestead rights. So, it is a good idea for the mortgage to include language stating that the spouse is signing only to satisfy the spousal joinder requirement contained in the Florida Constitution and that the spouse isn’t assuming any liability or obligation in the note or mortgage. Make sure the non-owing spouse reviews the mortgage agreement carefully to ensure the terms are consistent with his or her understanding.hts, making foreclosure difficult. Therefore, if property could be considered the buyer’s homestead, most lenders require the non-owning spouse to sign the mortgage agreement for the sole purpose of waiving homestead rights. So, it is a good idea for the mortgage to include language stating that the spouse is signing only to satisfy the spousal joinder requirement contained in the Florida Constitution and that the spouse isn’t assuming any liability or obligation in the note or mortgage. Make sure the non-owing spouse reviews the mortgage agreement carefully to ensure the terms are consistent with his or her understanding.

Q. Does Florida law require that a seller of a property provide a buyer with a written property disclosure?

A. A seller is not required under present Florida law to provide a buyer with a written real property disclosure.

Q. What is a Buyers Representative?

A. Buying a home is a big decision and a personal one. You need the right person to find a home that suites your needs. Purchasing real estate is a complex and major transaction with many details to be handled. Depending on the laws in your state and the business arrangement you have with a licensed real estate agent, that agent may actually be negotiating for the seller, not you the buyer. The best way to be certain that an agent is working in your best interests is by signing a buyer’s representation agreement with an agent. Florida law does not allow dual agency so this is an important fact to remember.

So why should you use an Accredited Buyer’s Representative (ABR)? These three letters after a Realtors name tell you that you will be working with buyer representative who is committed to your best interests. The ABR Designation is awarded by REBAC to those Realtors who have met the specific educational and experiential criteria needed to provide the highest level quality service required by the Real Estate Buyer’s Agent Council. A real estate buyer’s representative represents the buyer who is purchasing the property in a real estate transaction. Research by the National Association of Realtors has shown that when a buyer’s representative is used, the prospective buyer found a home one week faster and examined three more properties than consumers who did not use a buyer’s representative. A buyer’s agent will do the following: Evaluate the specific needs and wants of the buyer and locate properties that fit those specifications. Assist the buyer in determining the amount that they can afford (pre-qualify), and show properties in that price range and locale. Assist in viewing properties—accompany the buyer on the showing, or preview the properties on behalf of the buyer to insure that the identified specifications are met. Research the selected properties to identify any problems or issues to help buyer make an informed decision prior to making an offer to purchase the property. Advise the buyer on structuring an appropriate offer to purchase the selected property. Present the offer to the seller’s agent and the seller on the buyer’s behalf. Negotiate on behalf of the buyer to help obtain the identified property, keeping the buyer’s best interests in mind. Assist in securing appropriate financing for the selected property. Provide a list of potential qualified vendors (e.g. movers, attorneys, carpenters, etc.) if these services are needed. Most importantly, fully-represent the buyer throughout the real estate transaction.

Q: Do you know of any property tax rebates that are being offered due to last year’s hurricane damage to homes?

A: Here’s some good news for any Floridian who paid property tax on a homestead property that was deemed partially or completely uninhabitable due to hurricane damage in 2004. You may be eligible to receive a rebate on property taxes up to $1,500 from the state. The rebate is prorated based on the number of days the property was uninhabitable. Homeowners must apply for the rebate to their county property appraiser by March 1st 2005. The tax relief emerged from a special session of the Florida Legislature that allocated nearly $500 million in various types of relief for Floridians hit hardest by the four storms. For more information, homeowners should contact their county property appraiser.

Q. I have been looking at a For Sale by Owner that is selling their home “as is” and I asked the seller to disclose any latent defects concerning the property, and they said he did not have to because the home was being sold “as is”. Do the sellers have an obligation to disclose known latent defects even if they are selling the home “as is”? Jeff

A. Jeff, yes if the seller of a home knows of facts materially affecting the value of the property that are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer. There has been several court cases that have upheld this position and if you ask for a property disclosure before entering into a contract that would help you in the decision whether to go forward or pass on the property.

Q. Does the seller of a condominium have a set amount of time to provide a current copy of the declaration of condominium, articles of incorporation, bylaws, and rules of the association and a copy of the most recent year-end financial information and question and answer sheet?

A: No, However, the buyer has three days from the time he or she receives the documentation to rescind the contract, so it’s in the best interest of the seller to provide the documents as soon as possible.

Q. My elderly parents own rental property that is in a living trust. Is there a tax advantage for them to sell the property now, verses selling after one or both pass away?

A. If your parents sell their rental property now, their capital gain will be taxable. However, if the property is not sold until after one dies, the survivor will get a fully or partially stepped-up basis to market value that would reduce potential capital gain tax. If the property is sold after both parents die, the heirs will receive a new basis stepped-up to market value on the date of the surviving parent’s date of death. The fact that the title is in a living trust has no effect on the tax situation. A living trust is just a title holding method, primarily to avoid probate costs and delays, as well as to provide property management if one or both of your parents become incompetent, such as Alzheimer’s disease. As always you should consult your attorney and tax advisers for exact details.

Q. We signed a one-year lease for our apartment and now the owner has notified us that the building is being sold. What are our rights and can our new owner raise the rent?

A. Ownership of your apartment building is going to change however, the terms of an existing lease generally will be honored by both the new and existing owners when your unit is being sold. The new landlord cannot raise the rent prematurely, nor can a tenant use the sale as an excuse to break the original rental contract or renegotiate its terms. If you need additional information on this, contact your local consumer affairs department before your lease expires.

Q. What is a construction lien and how does it effect an owner of a property and a contractor?

A. Florida’s Construction Lien Law allows contractors, materialmen and vendors to enforce their claims for payment against your property by filing and foreclosing construction liens. These liens may result in the loss of your property. Recognizing the severity of the risks to homeowners, as well as the complexity of the Construction Lien Law, the Florida Legislature recently required that certain "plain English" disclosures be included in any direct contracts between an owner and a contractor relative to improvements to single or multiple family dwellings of up to four units. The following disclosures will alert homeowners as to some of the risks and pitfalls lurking in the construction jungle:

"According to florida’s construction lien law (sections 713.001-713.37, florida statutes), those who work on your property or provide materials and are not paid in full have a aright to enforce their claim for payment against your property. This claim is known as a construction lien. If your contractor or a subcontractor fails to pay subcontractors, sub-subcontractors, or material suppliers or neglects to make other legally required payments, the people who are owed money may look to your property for payment, even if you have paid your contractor in full. If you fail to pay your contractor, your contractor may also have a lien on your property. This means if a lien is filed your property could be sold against your will to pay for labor, materials, or other services that your contractor or a subcontractor may have failed to pay. Florida’s construction lien law is complex and it is recommended that whenever a specific problem arises, you consult an attorney."

If the contract does not contain the above language, then a contractor cannot place a lien on your property for any money owed to him, but other parties (e.g. subcontractors) could still claim a lien. Article submitted by: Richard K. Barra, Esq. Scott, Harris, Bryan, Barra & Jorgensen, P.A. 4400 PGA Blvd. #800 Palm Beach Gardens, FL 33410 (561) 624-3900 Email: rkbarra@scott-harris.com

Q. If I wanted to buy property and wanted to remain anonymous how do I do this?

A. A simple way is a land trust to ensure anonymity, as the trust beneficiaries cannot be disclosed without a court order. Always consult a real estate attorney to assist you in setting a trust up properly.

Q. What is a radon gas hazard.

A. Radon gas is a naturally occurring radioactive gas that cannot be seen, smelled or tasted. Radon is present in rocks, such as granite and shale, that contain uranium, and is a known carcinogen. HRS requires a radon gas disclosure to be included in every contract for the sale and purchase of real property that includes a building, including commercial property. A seller is not required to test for or abate radon gas levels. However, if either party wishes to determine the radon level, they may locate a professional radon tester by calling HRS at 1-800-543-8279. Real estate licensees should not attempt to conduct the radon gas test.

Q. Is it better to have my elderly mother put my sister and me on the title of her home before she dies, or should she will the property to us?

A. It’s better to inherit the property than receive it as a gift while the donor is alive. The reason is with a will, the beneficiary or heir gets a new stepped-up cost basis for the property of its market value on the day the decedent dies. However, if your mother gifts the property to you and your sister while she is still alive, as donees you take over the donor’s usually low-adjusted cost basis. Then when you eventually sell the property, you and your sister will then have a larger capital gain tax on your sale profit. Here is a better alternative - have your mother deed title to her property into her revocable trust. While she is alive, she can sell or refinance her property. When she dies, however, the title passes directly to you and your sister without probate costs and delays. Another major living trust advantage is, if your mother should become incompetent such as Alzheimer’s disease, if her property was deeded into her living trust, you and or your sister as successors trustees can sell the property if needed to pay for your mother’s care.