Tampa Bay Homes and Land

The 2008 legislative session is over and Governor Crist signed several bills into law that help property owners.  Whew!

Having the opportunity to observe this process of taking a bill from concept to law, my hat is off to our state legislators.

These new laws are effective on July 1st.
• SB 464: Prohibits private transfer fees
• HB 743: Mortgage fraud regulations
• SB 2860: Property insurance reforms

Prohibition of private transfer fees. SB 464 by Sen. Dave Aronberg (D-Greenacres) and HB 391 by Rep. Charles McBurney (R-Jacksonville) outlaw the practice of private transfer fees, a costly problem for future homebuyers. Here’s how the scheme works: In a property’s covenants, codes and restrictions, a property owner reserves the right to receive a percentage of all future sales — usually 1-2 percent. But buyers and sellers are often unaware of this fee until they’ve entered into a purchase contract. The practice artificially devalues property and impedes the sales process.

Crackdown on mortgage fraud. Last year, 70-80 percent of the almost 300,000 foreclosures in Florida involved mortgage fraud. HB 743 by Rep. Carlos Lopez-Cantera (R-Miami) raises the penalty for involvement in a mortgage fraud scheme from a third degree felony to a second-degree felony. Those found guilty could now face up to 15 years in prison. The legislation also requires law enforcement agencies to promptly notify county property appraisers when the agency finds probable cause that mortgage fraud or other fraud has inflated or could artificially inflate the value of the property. Based upon a conviction of mortgage fraud or other fraud affecting the value, the property appraiser will now have the ability to reassess all the properties affected by the fraud.

More property insurance reforms. The so-called Homeowners’ Bill of Rights (SB 2860 by Sen. Jeff Atwater, R-N. Palm Beach) seeks to improve upon the property insurance reforms enacted in 2007 by:

• Extending the rate freeze for Citizens Property Insurance Corp., the state’s insurer of last resort, to January 2010. The freeze was set to expire in January 2009;
• Allowing single-family residential properties and condos with a replacement value of up to $2 million into the Citizens insurance pool (up from $1 million, which was set to begin Jan. 1, 2009);
• Requiring Citizens’ policyholders of property located in wind-borne regions and with an insured value of $500,000 or more to disclose the property’s windstorm mitigation rating to prospective buyer. Language in an earlier version of the bill would have required all sellers to provide their property’s windstorm rating);
• Increasing fines for violations of the insurance code and for unfair trade practices by private insurers;
• Extending by one year to January 2010 a provision from last year’s insurance bill that requires insurers to get state approval before raising property insurance rates;
• Requiring insurers to notify state regulators 90 days before dropping more than 10,000 homeowners’ policies in one year;
• Requiring insurers to use state-approved methods to predict the risk of hurricanes, a key factor in setting rates.

We regularly post information for Homeowners on our website, www.TeamSumberg.com and invite you to visit.