When Is a Florida Real Estate Agent or Broker Guilty of the Unauthorized Practice of Law?

Posted By on March 24, 2015

Buying or selling a home or condominium here in South Florida involves lots of paperwork, much of it legal documents like contracts with the real estate agent or broker (a listing agreement); as well as sales contracts, deeds, title searches and title commitments, disclosures and more. In fact, almost every kind of Florida real estate transaction (residential or commercial), or the rights to land, will have several legal documents that must be signed as part of the transaction.

Most documents related to real estate transactions involve Florida law and legal issues.

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In Florida, real estate agents and brokers are educated on aspects of Florida real estate law as part of the testing requirements for their state real estate license. The agents and brokers must know about laws regarding zoning, their fiduciary duties to their clients, why clear title is so important, and much more in order to provide professional support to their clientele.

However, at no time is a Florida real estate agent or Florida real estate broker to practice law. It is against the law in the State of Florida for an agent or broker to do so; doing so is called the “unauthorized practice of law.” Why? Real estate law is complex and it’s easy for innocent people to get hurt by people who give advice when they aren’t properly educated and licensed to do so.

Were You Referred to a Florida Real Estate Lawyer for Legal Questions?

When a buyer or seller or landlord or tenant has a legal question, it’s very tempting for the real estate professional (including the property manager) to answer the question — and this temptation seems to grow the longer that person is employed in the real estate industry. However, the public needs to be well aware that just because an agent, broker, or manager has been “doing this for years” does not mean they are correct in their knowledge of Florida law and how it applies to the particular situation.

Practicing law here in Florida is defined by Florida statute. It involves giving advice that needs legal knowledge — and that means someone who is licensed to practice law by the State of Florida.

Can A  Real Estate Professional Give An Opinion?

Nevertheless, all too often, real estate agents and brokers skirt the edge of the envelope or go over the line and practice law without a license. For example, if a buyer or seller asks a broker or agent to check out the title to a piece of property, that’s not allowed. Title is a real estate issue of depth — and figuring out if a home or land has a “clouded title” is not only complex from a legal issues standpoint, it can be tricky from a legal research view, as well.

Florida Statutes 475.25(j) has been passed by the Florida Legislature specifically to address this situation. Under this law, no one with a Florida real estate license is allowed to give any opinion on the title to real estate. What they can, and should, do is obtain the legal opinion on title from a Florida real estate lawyer and then pass that legal opinion on to their clientele.

Florida Statute 475.25(j) states that a real estate professional is subject to losing their license if he or she:

“[h]as rendered an opinion that the title to any property sold is good or merchantable, except when correctly based upon a current opinion of a licensed attorney at law, or has failed to advise a prospective purchaser to consult her or his attorney on the merchantability of the title or to obtain title insurance.”

What About Real Estate Contracts?

Working with the Florida Bar (the official organization of Florida lawyers), the Florida Association of Realtors publishes standard real estate contracts that real estate professionals can use in the State of Florida for real estate transactions. You can check a form to see if it is one of these standardized documents by looking at the bottom of the form for a copyright reference.   For example, here is an online example of a “FARBAR” residential real estate purchase contract form. 

These forms can be used by real estate agents when a buyer wants to make an offer on a condo, for instance. The public should be aware that even these standardized forms carry some risk of the Unauthorized Practice of Law by a non-lawyer.  A common problem here is an agent that drafts an “addendum” to the standard form. These Addendum are legal documents and legally binding. (The public should also know that these standardized Contracts have several important sections that must be filled-in by the parties, including sections relating to who pays for certain expenses, whether or not the contract is assignable, when deposits are due, when inspections should be completed, cancellation provisions, etc.)

If the Addendum later results in that contract being unenforceable under Florida law, then the real estate agent and his or her real estate brokerage firm can be legally liable for the damages resulting from the deal gone bad — and the real estate professional could be accountable for practicing law without a license.

What Should You Do If You Need An Addendum?

Check with the Florida Bar Association and/or the Florida Association of Realtors to see if there is an authorized Addendum that meets the exact needs of your situation; otherwise, ask a licensed Florida real estate attorney to draft it. It may not be nearly as costly as you think and it will undoubtedly be cheaper than dealing with a flawed legal document in the future.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

Facing Foreclosure in Florida? Getting Deposition Testimony of the Bank Is Critical to Your Defense

Posted By on March 17, 2015

Here in South Florida, a healthy number of foreclosure lawsuits are still being filed every week causing lots of stress for home owners. Sadly, many of these home owners have thrown their hands up at trying to deal with their bank and have simply given up trying to save their home (including walking away); they are so exhausted that they are not even trying to fight the lender and mount any type of foreclosure defense.

Florida leads the country in the number of “zombie foreclosure” properties. A zombie foreclosure is where the owner has stopped making mortgage payments, and has left the home or condo, and the bank or mortgage lender does not take legal title or legal ownership of the home or condo. The property is said to be in a “zombie” status.

According to a February 2015 study by RealtyTrac®, in its “Q1 2015 Zombie Foreclosure Report” there were more zombies in the number of total foreclosures (25%) than there were a year ago. Florida led the nation in the number of zombie foreclosures, with 35,903 zombie foreclosures and with 26% of all the Florida foreclosures being zombie foreclosures.

Is Defending a Florida Foreclosure Still Important?

For Florida foreclosure defense lawyers, this is both a sad and frustrating situation. We understand the emotional toll that comes from dealing with a lender in a foreclosure fight and how tempting it is to walk away and leave them to take your home. Trying to negotiate or work out an arrangement to save your home with some lender representatives can be maddening for anyone — we get it.

However, before someone just leaves and lets the bank run free regarding the foreclosure, it’s important to get the bank to confirm its position or prove its legal standing to pursue the foreclosure. All too often, these foreclosure lawsuits are defective; either the paperwork is defective or its lost or it just doesn’t make sense.

Deposition testimony is taken before trial but carries the same weight of authentic evidence as sworn testimony on the stand.

Is Getting the Bank’s Deposition Testimony Important?

One tool that Florida home owners can use in defending against foreclosures — before they walk off in frustration — is to have their foreclosure defense lawyer take the deposition testimony of the duly authorized representative of the financial institution that is the plaintiff in the foreclosure lawsuit.

This is done by serving a notice to the bank in the foreclosure case that the home owner wants to take the  sworn testimony of a bank representative. This notice can be filed “duces tecum,” which means that the bank’s chosen spokesperson is subpoenaed to bring all its files and paperwork for review and questioning by your foreclosure lawyer.

It is here — in the deposition of the Bank — that the foreclosure defense attorney can find holes in the Bank’s claims regarding their legal rights to sue for foreclosure as well as problems with the filing itself and the procedures that the bank has followed in trying to foreclose on the property.  (Did the person endorsing the note have the authority to do so – or, were all of the payments properly credited to the homeowner – or, was the correct information transferred from one payment servicer to the next, etc.)

Home Owners Need to Act Fast

Florida foreclosures are moving forward faster than they were a couple of years ago. The time lag that gave Florida owners some wiggle room on deciding what to do regarding their foreclosure defense is becoming shorter.

It’s important to act fast if you are served with a foreclosure action by your lender. Why? Banks aren’t waiting to file  “motions for summary judgment” – they are moving a lot faster in asking the court to enter a judgment against the homeowner.

What is a Motion for Summary Judgment?

When the bank files its summary judgment request, it has to provide the court with evidence that it has a right to a foreclosure judgment without the need for a full trial. It does this by providing affidavits that authenticate things attached to the motion as its exhibits to make them admissible evidence under Florida law.

If no one challenges that summary judgment motion (much less challenges the bank in a full trial), then the judge will grant that request and a foreclosure judgment will be entered on behalf of the bank.

The bank will likely get all it asks for in the Motion for Summary Judgment. That’s never good for the defendant home owner.

Here is where that deposition testimony can come into play for the benefit of the home owner: the paperwork filed by the bank can often be challenged as to whether it can provide valid support for that summary judgment (or the lawsuit itself). If your lawyer can find a fact that is in dispute, the court will likely not grant the summary judgment.  Florida foreclosure defense lawyers know what to look for here — e.g.,

  • Are there legal gaps in ownership of the loan itself?
  • Are the numbers correct? – Were all payments accounted for?
  • Did the home owner make payments under a trial modification that the bank is now not honoring?
  • Where’s the documentation (including endorsements) that proves that this bank is the rightful lender to be foreclosing in this lawsuit?

Sometimes, you will have only weeks after the bank files its foreclosure action to prepare for a summary judgment hearing. So, don’t wait!!!  Talk with a lawyer today. Most foreclosure defense lawyers, like our office, offer a free initial consultation in which they will explain the benefits of taking the deposition of a bank representative and how that testimony can be used to prevent the entry of a summary judgment or how it can help the homeowner to prevail at trial.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

Listing Agreements: Are All Florida Real Estate Broker Contracts The Same?

Posted By on March 10, 2015

When you decide to sell your Florida home or condo (or other residential real estate), one of the first steps you may take is finding a real estate broker to help you get the property sold. In the Miami and Broward County areas, there are lots of real estate agents working hard for local, state-wide, and national brokerage firms to get condos, single family homes, townhouses, and more sold for residential sellers.

What is a Listing Agreement?

When a residential seller here in Florida finds a real estate broker that he or she wants to hire, then that broker is going to want the seller to sign a contract which is known in the industry as a “listing agreement.” This is a legal document and it will bind the seller to legal duties — but all too often, Florida home sellers don’t realize that there are different kinds of listing agreements and that once they’ve signed one of these agreements, they may be bound to terms that they later find to be unfair.

For instance, sellers may work hard to find their own buyer for their Miami condo or Fort Lauderdale house only to find that under the listing agreement, the real estate broker may still be due money under the contract even though no real estate agent working for that brokerage firm did a thing to find that buyer.

Florida Listing Agreements Between Sellers and Real Estate Brokers / Agents

There are four basic types of contracts between sellers of residential real estate here in Florida and real estate brokers / agents: the open listing; the exclusive agency; the exclusive right of sale; and the net listing.

1. Open

In a open listing agreement, the real estate broker (working through its agents) can bring potential buyers to check out your property and if that potential buyer ends up closing the deal, then that broker gets paid a commission for finding that buyer. The Florida seller can sign as many different open listing agreements with as many different real estate brokers as he or she chooses to execute.

Thing is, Florida real estate professionals don’t like competing with each other in these kinds of situations, so the seller may find it difficult to gather a lot of signed open listing agreements and the property may not get promoted as much by the real estate pros as it would under other arrangements.

2. Exclusive Agency

In an exclusive agency agreement with a Florida real estate broker, the seller is free to find his or her own buyer and if the seller succeeds the broker gets paid nothing. However, if the real estate broker finds the buyer, then the broker (working through its agents) will get paid the real estate sales commission as detailed in the listing agreement.

3, Exclusive Right of Sale

In an exclusive right of sale listing agreement, the real estate broker gets a commission when the home is sold no matter who finds the buyer. If you find the buyer, then the real estate broker still gets paid the commission that is described in the listing agreement.

4. Net Listing

In a net listing agreement, there’s more wiggle room for the real estate broker profit-wise. Here, the agreement allows for the residential real estate to be sold with a specific amount (the “net amount”) to be paid to the seller and the real estate broker is authorized under the listing agreement to keep all the money from the sale that exceeds that net amount. In some circumstances, that sum may be much higher than the standard commission percentage the real estate broker would receive.

How Does The MLS Work? – Will My Realtor Add My Property to the MLS?

The Multiple Listing Service (MLS) is a real estate tool used across the country to help market and sell real estate. Each entry into the MLS is given a specific identification number and real estate professionals are able to search through MLS listings in a national database using different criteria (location, sales price, number of bedrooms, number of days on the market, etc.).

MLS involves real estate brokers agreeing to participate in the Multiple Listing Service and forwarding information about their exclusive listings (see above) for inclusion in the MLS database. Any MLS member can work to sell property in the database and if a real estate broker other than the one who signed the exclusive listing agreement finds the buyer, then that broker and the broker shown on the listing agreement split the commission.

Sellers do not contract for listing agreements in MLS. The Multiple Listing Service is made up of real estate professionals as its members. Additionally, not every real estate professional in Florida may participate in MLS and not every piece of residential real estate will be included in MLS databases for Florida homes for sale.

Warnings to Florida Sellers about Listing Agreements

Listing agreements are legally binding contracts between you and the real estate broker. Many of these real estate professionals will be forceful in getting a contract signed but remember that they are NOT LAWYERS and they are NOT CONTRACTING WITH YOU FOR YOUR BEST INTERESTS, BUT FOR THEIR OWN SALES REVENUE GOAL.

Questions for sellers to consider before signing any listing agreement including things like:

  • How long is this listing agreement going to be in effect?
  • What are the terms of sale?
  • At what price are you willing to sell?
  • How much commission will be paid and when is it due?
  • What fixtures are not going with the property (are you keeping the fridge?)
  • Is the property going to be listed in the MLS?
  • Will there be a lockbox on your property?
  • How can you terminate the listing agreement?
  • Is there a fee to terminate the listing agreement?
  • Are you going to be bound to arbitration?

Before you agree to any kind of listing agreement as a seller of a Florida condo, townhouse, single family home, or other residential real estate, it’s important for you to read and understand all the provisions in that legal contract and to know your legal options before you sign on the bottom line. Getting the advice and guidance of a Florida real estate lawyer can be invaluable here and much less expensive than many sellers presume.  Most often, your real estate lawyer will review this Agreement as part of their services in representing you in the sale of your home.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

Liens on Your Florida Condo or Home: What are They and How Do You Get Rid of Them?

Posted By on March 3, 2015

Condo living is a different lifestyle here in Florida, one that lots of people enjoy. Sharing the responsibilities of lawn care and landscaping, pool upkeep, and more can free condo residents from chores they would have face if they lived in a single family home in the suburbs.

However, living the Florida Condo life also means being willing to live in a shared community where a property manager has control over lots of things and where condo unit owners can face decisions being made by the Condo Board or the Condominium Association with which they do not agree.

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Condominiums are popular in Fort Lauderdale.

 

When Condo Unit Owners Don’t Pay Their Fees and Assessments

One big result of this: when the Condo Board decides on spending money on a project and each condo owner is faced with the new responsibility of having to pay their share of that project’s cost. What if the unit owner rebels and decides not to pay?

Another result of this: there are Florida condo units that have been abandoned by their owners which are in the foreclosure process. What happens to the Condo Association when they have basic expenses (like maintenance, etc.) and there’s not money coming from those defaulting unit owners? What is the Condo Board to do?

The answer, in many instances, is a lien. Liens are placed against the Florida condo unit. If the liens remain unpaid, then the Condo Association can foreclose on the condo unit and take title to the property.

Liens Against a Florida Condo

Before real estate agents show Florida condos to prospective buyers, they are required to explain the distinction of this type of real estate ownership and how it is different from owning a single family home. One of the big reasons for this requirement is because anyone buying a Florida condo needs to know that there is the risk of a lien being placed against their condo home by the Condo Association.

What is a lien?

A lien is a way to cloud title against real estate, preventing it from being sold or transferred without the debt established in the lien being paid. It is tied to the Florida real estate itself, not the owner. Liens filed in the real property records are also prerequisites for foreclosing on the condo.

Liens can be placed against land and real estate, like condominium units, townhouses, single family homes, as well as commercial and industrial properties for several reasons. There are tax liens where liens are placed against Florida real estate as vehicles to get income taxes, estate taxes, or property taxes paid, for instance. Also, mechanic’s liens and materialman’s liens can be placed by contractors who have unpaid construction invoices. Vendors’ liens can be filed against real estate in Florida to get certain debts paid.

However, most disputes involving condo fees and condominium assessments are liens placed by the Condominium Association against a specific condo unit for outstanding and unpaid assessments.

Florida Condo Liens

Florida Statute 718.116 authorizes liens to be placed against condo units and makes the owner of the condo unit responsible for paying any assessments that are placed against the condo unit while that particular owner has legal title to that unit.

Florida Statute 718.116 also authorizes new owners of Florida condos to be liable for paying past-due assessments on the Florida condo. The new owner and the past owner of the unit can be held liable for those condo assessments “jointly and severally” which means that if the past owner is not able or unwilling to fork over any cash to pay the assessment debt, the new owner can be held liable for the entire amount.

This is true even if the new owner bought the Florida condo in a foreclosure sale.

Why? Isn’t this unfair to the new condo owner?

Maybe. However, the Florida Legislature has decided that the interests of the condominium as a whole in maintaining and repair and upkeep of the entire condominium property must prevail over the new condo owner who may be surprised to learn that they’ve got a big assessment amount due and owning now that they’ve closed on their new condo unit. The law is designed to help Condo Associations get reimbursed and paid for the monies needed to do their job regarding the common areas, etc., for the benefit of the condo owners as a whole.

Problems With a Florida Condo Lien?

If you have problems with a lien being placed against a Florida condo that you own or may wish to purchase, then you need to know the legal ramifications of the condo lien as well as ways to solve the lien problem short of losing the condo property (as well as your options and risks if you choose to let the condo go in face of the condo lien).  You may also want to explore the potential liability of any real estate agent who failed in their duty to explain what condominium purchases are and the risks involved in purchasing a condo unit (like liability for assessments).

An experienced Florida condo lawyer can explain the nuances of your particular circumstance and help you decide which alternative is in your best interests.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

Florida Condos, Coops, TimeShares, HOAs, and CDDs: Know the Difference Before You Buy

Posted By on February 24, 2015

In Florida, there are different types of home ownership recognized by the Florida Legislature other than the traditional single family home. Florida laws recognize five different alternatives that anyone considering buying residential real estate in Florida, for their vacation home, their retirement home, or an investment property, needs to know. (And, yes, the real estate agent should be apprising you of the differences when you are considering properties to buy ).

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These five residential property ownership options are: Cooperatives, Condominiums, Community Development Districts (CDDs), Homeowner Associations (HOAs) and Time-Shares.

1. Florida Cooperatives

In a Florida Cooperative, you don’t own the land or the fixtures or the improvements built on the land. Instead, you own stock in a corporation. The corporation is the real estate owner; you are a shareholder in the corporation.

As a result, the corporation is responsible for things like paying property taxes and maintaining the property condition. You, as a shareholder, own stock that carries with it a right to occupy a part of that holding via a proprietary lease.

Florida cooperatives are governed by the Florida Cooperative Act, which is Chapter 719 of the Florida Real and Personal Property Code.

2. Florida Condominiums

In a Florida Condominium, you do own real estate in “fee simple” but you only own your individual unit in the bigger condominium complex. This might be one of the many beautiful condo towers here in South Florida that offer ocean views from balconies, or it may be a condominium that is a few stories high with only a dozen units or so, located in a neighborhood convenient to shopping centers and entertainment venues.

Thing is, by owning a condo you are entering into a shared community environment, where you are agreeing to abide by rules and regulations set up for the condominium as a whole — these are set out in the condo documents (declarations, bylaws, etc.) which are to be provided for review to potential buyers prior to purchase.

As a Florida condo owner, you also own a part of the common areas of the condominium — the pool, the parking lot or garage, etc. — but it is in an “undivided interest.” No Florida condo owner can point to a section of the tennis court, for instance, and claim exclusive ownership of that spot.

Florida condo owners pay property taxes on their individual condominium unit. When they sell their unit, they transfer ownership by a real estate deed just like owners of a single family home in the suburbs.

Florida condominiums are governed by the Florida Condominium Act, which is Chapter 718 of the Florida Real and Personal Property Code.

3. Florida Time Shares

In a Florida time-share, you are agreeing to own a specific property in a shared ownership with others, or to own only the right to occupy that property for a specific time period. There are a variety of legal alternatives in owning a Florida time-share, with different rights and remedies regarding the scope of your rights to use the specific property.

Florida Time Shares are governed by the Florida Vacation Plan and Time-Sharing Act.

4. Florida Home Owner Associations

In a Florida Home Owner Association (HOA), the owner of property within the boundaries of the association is legally required to be a member of the Homeowner’s Association as a condition of owning the real estate. It’s not an option. As an owner in a neighborhood with a Florida Homeowner Association, you can vote (or assign an agent to vote on your behalf) on association business.

The Home Owners’ Association itself is a Florida corporation that is legally responsible for maintaining, upkeep, etc., of the community. Assessments are placed on property within the community in order to fund the Homeowner Association’s work and if the owner fails to pay his or her assessment, the HOA can place a lien on the property.

Florida Homeowners’ associations are governed by Chapter 720 of the Florida Real and Personal Property Code.

5. Florida Community Development Districts

In a Florida Community Development District (CDD), a special purpose governmental unit is created with limited functions in order to provide urban community development in specific parts of Florida. This unit, a “community development district” or CDD, is able to tax or levy assessments upon those who own property within its boundaries as the CDD determines is best.

The CDD itself is overseen by its Board of Supervisors, who are 5 people elected by land owners to serve on the board. They hire a district manager who handles the actual operations.

Anyone purchasing property within a Florida CDD should expect to see the legally required disclosure in their documentation, letting them know that they are buying real estate within a CDD and can expect that the CDD may impose taxes or assessments upon the property in order to fund or pay for the upkeep of public facilities or services within the district itself. These would be in addition to any taxes or assessments that the property owner may be required to pay as property taxes or other taxes imposed by county or local government.

Florida CDDs are governed by the Uniform Community Development District Act of 1980, found in Chapter 190 of the Florida Planning and Development Code.

 

Consider Before You Buy

Before you go ahead and buy a home or condo within one of these ownership alternatives, you may want to understand the legal ramifications of living and owning property within them. For some people, these alternatives provide just what they want or need.

A Florida condo offers a great lifestyle for those who don’t want the hassle of pool upkeep but enjoy their morning swim, for example. A Florida time-share may be a great idea for someone who is considering uprooting their family from some snow-covered state and relocating to sunny Miami: spending a couple of years in South Florida with time-share ownership may be a great stepping stone for them.

However, each option has its limitations and real estate agents are legally required to disclose properties that are limited by these legal alternatives to anyone considering a purchase in one of them. That’s because the laws that apply to owners in a condo, time share, CDD, HOA, or Co-op may be an unwelcome surprise to some who don’t want to share in ways that each of these options requires real estate owners to do.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

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