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Housing Market Projections

Housing Market Forecasts for 2020

   Happy New Year!  While many are trying to adhere to their New Year’s resolutions, such as dieting, exercise, maybe finding a new job or a new relationship, real estate investors are on an emotional rollercoaster about the prospective housing market for this year.   Expert predictions of real estate trends for Florida in 2020 are variable, at best, with some market predictions for the Sunshine state being positive and others projecting a doom and gloom forecast. 

   Over the past decade, the housing market across the United States was strong, with the number of investors and buyers often exceeding the availability of inventory.  This was a consequence of a thriving economy, with low unemployment rates, low interest rates and various other economic factors.  Potential buyers and sellers were able to fulfill their dreams.  Although real estate forecasts can differ from state to state, the Florida Realtor Association recently reported that housing sales were up, almost by 15% in November of 2019 and the housing inventory was low.  While this appears to be good news for the housing market in 2020, there are inconsistencies in the economists’ predictions for the year ahead. According to a study done by the 2018 Q2 Zillow Home Price Expectations Survey, a study which included the polling of one hundred real estate experts and economists, they believed we will be entering into a housing recession beginning this year.  However, as 2019 progressed, Zillow recanted that position, advising that there will most likely not be a recession in 2020, as the economy has shown signs of growth and there is healthy consumer confidence.  In a survey that was conducted in August, 2019, of more than 200 economists, by the National Association for Business Economics, 72% believe there will be a recession, beginning in 2020. They cited trade policy, stock market volatility and rising interest rates as likely reasons for the next recession. In spite of the negativity of some real estate predictions, many believe that it is likely that the Florida real estate market will continue to flourish and it is a favorable environment for a lucrative investment.  Florida is the fastest growing state in the country, with Central Florida having the fastest growing cities in the United States.  There continues to be a high influx of northerners, immigrants from other countries and tourism driving the economy.

   While the real estate market is cyclical, with periods of high and lows, one thing is certain; every real estate transaction, whether buying, selling or leasing residential or commercial property, is best handled by a knowledgeable real estate attorney. The services of an attorney can safeguard your rights and ensure that you negotiate and close the deal, while protecting your interests and assets.  Whether you are a business owner, a real estate investor, an inheritance beneficiary, or an individual buying or selling your home, the Boutty Law Firm is experienced and effective in real estate and business law transactions.  Start the New Year off right, by calling for a consultation to discuss your real estate goals with a trusted attorney.   

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Residential Construction Defect

Residential and Commercial Construction Defects

The population growth in Central Florida in recent years has had major implications for the real estate market.  There has been a surge of commercial and residential real estate construction for single family housing, multi-family units and commercial businesses, bringing with it a myriad of possibilities for construction defects and subsequent litigation.  Construction defects are deficiencies in the building process which can result in costly damage to the property or can put the inhabitants of the property at risk for personal injury.  A construction defect can be a serious issue or it can be a matter of just not meeting the buyer’s expectations.  Lawsuits for construction defects can be a lengthy and costly process and multiple parties can be held liable for damages.  Restitution may include the costs of repairs, property devaluation, loss of use, court costs and attorney fees. In some cases there can be fines for gross negligence paid to the state and suspension of professional licenses.  A plaintiff can file a negligence claim if there were personal injuries as a direct result of the construction defect.  For negotiation, mediation and litigation of claims, a knowledgeable attorney is invaluable on your path to a successful resolution.  Attorney Benjamin Shane Boutty has been representing clients in construction and business law, for over 20 years.  He is well versed in all aspects of construction defect law, as he is a state certified contractor as well as a construction law attorney, a professor and has owned several construction companies.

What Constitutes a Construction Defect?

   Construction defects can be the result of design deficiencies, workmanship issues or material defects and often, they are a combination of all the following;

  • A design deficiency is the failing of the architects and engineers to follow State of Florida building codes in the design of a project, usually occurring by error or omission. An example may be a poorly designed roof that causes leaks and mold damage.
  • Workmanship issues can be either aesthetic concerns or they can be a structural integrity problems. An aesthetic issue can usually be repaired quite easily, whereas a structural integrity problem may not be easily seen until major damage has occurred, such as cracks in the foundation of the building or unstable load bearing walls.
  • Material deficiencies are defects that arise due to damaged materials or inferior products delivered by the manufacturer or the contractor using improper building materials.  Examples can be inferior dry wall that cracks, roofing shingles that leak or faulty electrical wiring that can result in a fire.

   Patent defects in a building are ones that are obvious upon inspection. Latent defects in construction are those that are not easily seen, which are usually more damaging and problematic. In the State of Florida, the statute of limitations for patent construction defects is four years after the defect is discovered, or ten years for latent construction defects.

Be Proactive in Communication and Documentation to Minimize Liability

   To prevent and mitigate construction defect liability, it is important for those professionals in the construction industry to be proactive by having a quality control measure in place.  This requires frequent and diligent review of plans and site assessments.  Frequently inspecting the project and keeping detailed records of the construction progress is needed evidence in the event of future litigation. Home buyers are entitled to a builder’s warranty with the purchase contract which establishes the buyer’s rights and protections.

   The Boutty Law Firm, in Winter Park, Florida, represents both plaintiffs and defendants in a wide range of construction defect disputes.  Our clients are property owners, material suppliers, architects, home owner associations, general contractors, developers and construction companies. If you are the owner of a property that is claiming damages or a business owner that is being named in a lawsuit, we can negotiate or mediate your dispute for an effective solution or be your advocate in court. Call the Boutty Law Firm for a consultation to discuss your unique situation.

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Commercial Property Lease Agreement

Consider these Factors Before Signing a Commercial Real Estate Lease

   For entrepreneurs or experienced business owners seeking to rent a commercial space such as an office, industrial property or a retail store, it is essential to understand the negotiations that are necessary before signing a lease agreement. 

A lease agreement between a landlord and a tenant, for the purpose of doing business, is more complex than a residential rental agreement.  It is in the best interest of a potential tenant or a commercial property owner to have the lease agreement reviewed by an experienced commercial real estate attorney, to determine if the terms of the contract will be suitable for the needs of the business. 

Some of the terms that are required in a binding commercial lease are the initial rent and future rent increases, the duration of the agreement, the security deposit, improvements to the property and if they are completed by the tenant or the landlord.  Other terms include the ability for the tenant to sublet space, the placement of signs due to zoning ordinances and landlord preference, an exclusive clause to prevent the landlord from leasing another unit to a competitor and compliance issues related to the Americans with Disabilities Act.

The leasing contract needs to address the renewal terms, in the event that the tenant wishes to stay in the current location after the expiration date of the lease.  Federal law requires that if a unit was built prior to 1978, it is mandated that the landlord include a disclosure statement if there is the possibility that lead paint may be present in the unit.  A radon gas disclosure is required, if radon gas levels have been found on the premises above the levels of federal and state guidelines.  A commercial lease should document how the lease can be terminated, in the event the tenant is unable to stay full term. 

It is important to know if the tenant can sublet the space, in part or in its entirety. There are circumstances whereas the tenant closes the business or wishes an alternate location and the lease needs to specify if it can be transferred to another. Commercial leases are offered on the basis of rentable square footage instead of usable square footage.  This means that in a shared building, the tenant pays not only for the square footage you are able to use, but also for a portion of the common areas. An example of shared spaces includes the hallways, restrooms, elevators, stairwells, storage areas and lobbies. 

   There are various types of lease agreements that can be negotiated for entering a rental arrangement with a commercial entity. A gross lease typically is an agreement that the tenant pays a monthly amount that is inclusive of all expenses regarding the property, such as the property taxes, insurance, maintenance and utilities.  This is a set fee that gives the tenant an expectation of exactly what their monthly expenses will be.  Other types of agreements are triple net leases, double net leases, single net leases and modified gross leases.   Each variation allows for different calculations of payment for the expenses of the property, divided between the landlord and the tenant.

   Starting a business is an exhilarating experience, however commercial leasing contracts must be handled proactively in the negotiation phase to minimize or prevent future litigation issues.  The Boutty Law Firm has extensive experience in all real estate matters. We can counsel and represent you in the initial phase of a rental agreement or with disputes that can result from the tenant or landlord’s breach of the lease, terminating lease agreements, constructive eviction and delinquency in rent eviction proceedings.  If you are a commercial property owner or a tenant, let the Boutty Law Firm handle your diverse business needs.

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Real Estate Listing and Contract

Real Estate Contracts and Disputes

In the selling or purchasing of property, there are emotional aspects that factor into the decision making process for the buyer or the seller.  When a homeowner is selling a house and property, they may be grieving years of memories being left behind.  A buyer may be excited about a particular neighborhood and anxious about the scarcity of homes there. Part of the work of a real estate agent is to help clients through the process.  The first step in buying or selling, is to find a real estate agent that can help you confidently navigate a home purchase or sale, one that listens to your concerns and knows the market.   The listing agreement is the contract that contains the terms by which a real estate agent can market a property. A valid listing agreement includes information, such as the start and end date of the listing, the  price of the home, the agent’s compensation, any monetary co-agreements with other real estate agents and the circumstances by which the contract can be terminated. 

   There are several types of listing agreements and they are all legally binding documents.  An example of these includes an open listing, which allows for multiple real estate agents to compete for the sale of a property.  It is the lowest level of commitment to an agent, as even the seller may bring in a buyer and do all the marketing. An open listing arrangement offers the seller flexibility and the benefit of multiple agents.

   A one time show agreement is a commission contract signed between a real estate agent representing a buyer and a home owner.  The agent can bring only one or a limited number of potential buyers to see the property, as agreed upon with the seller, and receives a commission only if a sale occurs with one of those buyers. This contract is useful in “for sale by owner” properties, as the real estate agent only represents the buyer wishing to see a particular home.

   An exclusive right to sell is the most commonly used listing agreement. It specifies a real estate agent that will receive commission on the sale of the home, regardless if the home is sold through the efforts of someone else. It allows the agent or brokerage, full and total control over the transaction, including marketing the home, listing on multiple listing services and closing the deal.

      Many real estate listing agreements are signed by sellers without fully understanding the provisions in the contract, resulting in disputes. It is important to be proactive and seek the advice and counsel of a real estate attorney prior to signing an agreement.  If a dispute occurs, it can be resolved through negotiations in mediation, arbitration or litigation.  Some of the common disputes occur due to breach of contract, when one party fails to follow the terms and conditions of the contract.  This may occur if the buyer fails to obtain adequate financing before the closing date or if they fail to go through with the purchase due to other circumstances. Or if the seller wants to back out after the contract is signed, it is a breach of contract.  Breach of duty occurs if the real estate agent acts in such a way that is detrimental to his client. A real estate agent is a proxy for his client and therefore has a fiduciary duty to represent his client’s best interest.  He must disclose all the facts in an open and honest manner to the client. Some of the ways they may breach the fiduciary duty are receiving fees not disclosed to the client, failure to inform a seller of offers made on the property, failure to advise a buyer of any defects on the property or acting as a dual representative to both seller and buyer, without their knowledge.  Another alleged claim in a real estate dispute can be the result of an express and implied warranty breach. These terms relate to the quality of the product and they are inclusive of a warranty to ensure a clear title to a property. In new home sales, the warranty guarantees that the house will not have any major defects that render it inhabitable and that the contractor has an obligation to repair any of the work that has been performed.

    A real estate purchase is a major financial and emotional journey that can be stressful and unpredictable.  The Boutty Law Firm has extensive knowledge in both residential and commercial real estate law. If you are a buyer, seller, construction professional or real estate agent with a legal issue, we can be an advocate for your rights under the law. Protect your investment and call us for a consultation today.   

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Home protection against hurricane damages

How to Dispute Insurance Coverage after Hurricane Damages

Hurricane Damages and Insurance Coverage

  During the months of June through November, we are immersed in a media blitz about storms and damages.  The State of Florida, which is surrounded by the Atlantic Ocean and the Gulf of Mexico, has a coastline of 8,436 miles, all of which are at high risk during a hurricane. Even those that don’t live on the coastline suffer heavy wind and water damages.  The report of a tropical storm or a hurricane brewing brings heightened anxiety levels and there can be immeasurable emotional wreckage following the storm. The history of hurricanes, such as hurricane Irma, hurricane Michael and the recent hurricane Dorian, caused devastating damages, for which there is major economic loss that may never be recovered. 

   The standard preparation for responsible homeowners and business owners, when a storm is approaching, is to do their best to secure loose items and trim or remove weak tree branches, especially around electric lines.  Creating a home inventory and reviewing your insurance coverage is imperative, if you need to claim damages.  Taking photos of your property prior to the storm, will adequately document the condition of your possessions.  When torrential rain, high tides or wind causes significant damages to your property, the results can be devastating.  Property owners are left to deal with roof and shingle damages, broken windows, flooding, moisture damages, destroyed porches, fallen trees and destruction of boats and other property.  Homes can be completely destroyed and become inhabitable.

   Insurance policies give us a false sense of security but insurance companies have an incentive to pay out as little as possible.  Your insurance policy is a contract between the insurer and the policyholder, in exchange for premiums.  This document determines the claims which the insurer is legally required to pay.  Following an event, an insurance adjuster will write a report of his subjective assessment of the damages.  This can result in a low estimate or a denial of the claim in total.  Some reasons that an insurance company will deny a claim or they may not pay for the damages in their entirety can be; policy exclusions, a missed payment can lapse your policy, coverage limit is reached but it’s not enough to cover damages, no documentation of damages, flood insurance needs to be a separate policy and/or pre-existing damage,   

   In addition to legitimate disputes between property owners and insurance companies, there are also a large number of questionable claims that need to be investigated and oftentimes, litigated in a civil court of law. While trying to deal with the trauma of your losses, insurance companies and property owners need to be aware of unscrupulous contractors that exploit customers during the confusion of a disaster.  Be wary of Assignment of Benefits fraud, which happens when you sign a deal that gives your contractor the right to bill your insurance company directly.

   The Boutty law firm will look out for your best interest and advocate on your behalf in a breach of contract dispute. You may be the property owner that feels your insurance company is unlawfully refusing to pay or you may be the insurance company that is disputing what appears to be a fraudulent claim. Or perhaps it is necessary to file for civil litigation regarding an untrustworthy contractor.  To learn more about how we can help you during this stressful time, schedule an appointment to discuss the details of your case.

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