FIRPTA and the First Day Effect

Island bayouThe days of our lives are scattered with those first times we always remember – a new school, a new job, a new year, a new romance – those milestones that come and go, and in the lead-up can be the impetus for a new way of doing things, different from how we approached or looked at life before.

Thanks to an impending rule change by the Internal Revenue Service (IRS), on February 17, 2016 the rate of income tax withholding in connection with the disposition of a U.S. real property interest to which a foreign person is subject increases to fifteen percent (15%) of the amount realized by the Seller on the transfer, from the present ten percent (10%) level.

Under the rules of the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), it is the buyer of real property who is required to withhold the percentage due on the transfer, and remit the withheld amount to the IRS (I) unless an exemption applies, or (ii) the seller has obtained a Withholding Certificate from the IRS authorizing a reduced amount of withholding.

According to noted international tax specialist Renea Glendinning, CPA, “If the buyer fails to withhold the proper amount, they can be held liable for the withholding.  The buyer’s closing agent generally acts on the buyer’s behalf to assist with meeting any withholding obligations.”

Up to now, most buyers were nonchalant about the withholding obligation, and happy to accommodate foreign sellers when it came to allowing them to await receipt of a Withholding Certificate, rather than forcing remittance of the withheld funds at the time of closing.

With the withholding rates going up (and the potential liability getting larger), the rush to the new era seems to have bred a newfound lack of willingness to accommodate foreign sellers in their acquisition of a Withholding Certificate. In the run-up to the rate change, buyers have begun to exercise their rights under a formerly obscure FAR/BAR contract provision to force the remittance at the time of closing, which states in part:

“If prior to Closing Seller has submitted a completed application to the IRS for a Withholding Certificate and has provided to Buyer the [required] notice…but no Withholding Certificate has been received as of Closing, Buyer shall, at Closing, withhold [15%] of the amount realized by Seller on the transfer and, at Buyer’s option, either (a) timely remit the withheld funds to the IRS or (b) place the funds in escrow, at Seller’s expense, with an escrow agent selected by Buyer and pursuant to terms negotiated by the parties, to be subsequently disbursed in accordance with the Withholding Certificate issued by the IRS or remitted directly to the IRS if the Seller’s application is rejected or upon terms set forth in the escrow agreement.”

From a listing agent’s perspective, an unyielding buyer isn’t necessarily a problem or cause for concern, especially from a timing perspective.   A foreign seller does not have to wait until the following calendar year to file their final tax return and obtain any refund due.  Instead, they can make what is referred to as an application for early refund, which is essentially the same application as the one for the reduced withholding.

The difference in this case is the withholding has to have been remitted to the IRS, and the application must include with it copies of the Form 8288-A to document that the withholding has been paid (therefore the reason it cannot be sent until after closing occurs).  The processing is basically the same as with the application for reduced withholding, but when the Withholding Certificate is issued, the refund is obtained from the IRS, rather than from the closing agent for the sale transaction.  Between not being able to send the application in before closing, and having to get the refund from the IRS, it is likely that only an extra month or two has been added to the time the refund is received.

From a selling agent’s perspective, the issue is more nuanced, and the response to the foreign seller wishing to apply for reduced withholding and escrow funds at closing (rather than remit them to the IRS), can depend in large part on how well the buyer is educated on the subject as the contract is first being written.

Especially given the FAR/BAR form’s statement that “[d]ue to the complexity and potential risks of FIRPTA, Buyer and Seller should seek legal and tax advice regarding compliance,” there is never a better time to get an experienced real estate attorney involved than at the beginning of the transaction to advise on the meaning and implications of the buyer’s withholding obligations and options, and help you forge a consensus for the parties as they move forward to closing.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

** Publisher’s note: This post was composed with the valuable assistance of Renea Glendinning, CPA (Kerkering Barberio).

Ever Wonder What Some Attorneys Think Of You?

90There is an obscure provision in the FAR/BAR contract that offers some unique protections to a licensee if – among other things – a party has misrepresented any information to the licensee (or there is incorrect information available in the public records), the licensee makes a faulty third party referral, or any such third party vendor provides defective products or services to a contracting party.

Section 14 of the contract provides in part:

Buyer and Seller (individually, the “Indemnifying Party”), each individually indemnifies, holds harmless, and releases the Broker and Broker’s officers, directors, agents and employees from all liability…including all costs and expenses, and reasonable attorney’s fees at all levels, suffered or incurred…in connection with or arising from claims, demands or causes of action instituted by Buyer or Seller based on:

  1. inaccuracy of information provided by the Indemnifying Party or from public records;
  2. Indemnifying Party’s misstatement(s) or failure to perform contractual obligations;
  3. Broker’s performance, at Indemnifying Party’s request, of any task beyond the scope of services regulated by Chapter 475, F.S., as amended, including Broker’s referral, recommendation or retention of any vendor for, or on behalf of, Indemnifying Party;
  4. products or services provided by any such vendor for, or on behalf of, Indemnifying Party; and
  5. expenses incurred by any such vendor. 

Buyer and Seller each assumes full responsibility for selecting and compensating their respective vendors and paying their other costs under this Contract whether or not the transaction closes.”

There is a small fraternity of attorneys who will insist this provision be stricken from the contract offer. 

This leaves buyers and sellers off the hook for any misrepresentations they may have made, and the licensee open to claim in the event one of their recommended referrals (i.e., home inspector, lender, closing agent, roofer, electrician, pest inspector, handyman, surveyor, septic inspector, plumber, and so on) renders defective service.  It also removes the specific responsibility for sellers and buyers to pay for the services of the third party vendors they utilize.

For a seller or buyer, this is not an unhappy turn of events – they’re not on the hook financially, or for being less than forthright.  Yet the licensee is potentially liable for the actions of the third parties the licensee refers, and possibly the fees for said vendors if the party fails to pay.

So what do you do when put in such a position?

You want to render comprehensive service and guidance to your client, yet with the stroke of a pen, their attorney leaves you holding the proverbial bag for your professional efforts.

Do you raise an objection and risk creating an adversarial atmosphere?  Or, do you just go about your business with fingers crossed, hoping that everyone performs as expected (and you don’t run into a situation like the one [true story] where the respected home and pest inspectors both missed the massive termite infestation in the property’s truss system, necessitating tens of thousands of dollars of post-closing repairs for the unwitting buyer)?

Dishonesty and misrepresentation can be difficult to peg.  According to Realtor Magazine: “Use..seller disclosure forms (and be sure that the seller fills out the form). [D]ocument sellers’ sources of information and encourage the use of other professionals, such as inspectors and attorneys, whenever appropriate. Avoid making predictions, such as “This well will never run dry” or “The value of this house is sure to appreciate.” They’re recipes for disaster.“

On the referral issue, you can simply pass along the third party referral responsibilities to the client’s attorney, leaving yourself free from any possible liability for defective performance by a vendor.

Most professionals, though, would feel like they were not doing their job, and furthermore maintain a trustworthy network of third party professionals upon which they rely, so a fallback position (and one some brokerages have adopted), is to provide a list of referrals with contact information and a bold-faced disclaimer, and leave it up to the client to make the hiring decision.  You can also ask the client to oversee whomever they hire once the decision is made.

While a discussion on the laws of agency and referral are lengthy enough to fill at least another post (or two), suffice to say that this situation is an excellent reminder to continually vet your third party vendors to ensure their performance is of the quality you expect and your clients deserve, and to always remain vigilant in seeking out forthright clients with which to work.

You will also want to check with your liability insurance carrier to understand what coverage you have, if any, should the work of any of your referral partners turn up defective.

And, when faced with this unique situation where your client’s attorney puts you on the defensive, be sure to alert your broker about the proposed contract revision, and if you proceed in the normal course and wish to make referrals, be very judicious with your selections and utilize your A-Team for every component of the transaction under your control.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

The Gifts That Keep On Giving: Disguised Waivers of Post-Closing Claims

A3968606_H01_13[1] [1219594]

Like a beautiful bow completes the look of your holiday gift package, many agents and their brokerages like to wrap the purchase process up with a signed walk-through acceptance form to memorialize the results of the final, pre-closing review of the property, and acknowledge its then-existing condition.

A benign version of such a form might offer the option of either:

  1. Acknowledging the inspection was completed, and the results were either satisfactory, or subject to certain enumerated matters to be addressed as the parties may agree; or
  2. Acknowledging the buyer waived the right to a walk-through (and holding the agents and brokerages harmless as a result of such decision).

However, just like flu viruses mutate and become more dangerous each passing year, recently this seemingly innocuous form has – as proffered by some agents and brokerages – begun to take on another purpose: to serve as a blanket waiver of post-closing claims against the seller and the seller’s broker.

The current FAR/BAR-4 contract forms provide as follows regarding the final walk-through inspection:

“On the day prior to the Closing Date, or on Closing Date prior to time of Closing, as specified by Buyer,  Buyer or Buyer’s representative may perform a walk-through (and follow-up walk-through, if necessary) inspection of the Property solely to confirm that all items of Personal Property are on the Property and to verify that Seller has maintained the Property as required by the Maintenance Requirement, and has made repairs and replacements required by [the] Contract, and has met all other contractual obligations.”

Section 14 of the contract advises a buyer to verify property condition and “facts and representations made pursuant to [the] Contract.”   The broker is in turn indemnified and held harmless from claims arising from – among other things – misstatements, inaccuracies, and the parties’ failure to perform contractual obligations.

The contract goes on to state, in BOLD CAPITAL LETTERS:

“Buyer agrees to rely solely on Seller, professional inspectors, and governmental agencies for verification of Property condition, square footage, and facts that materially affect Property value and not on the representations (oral, written, or otherwise), of Broker.”

While the contract clearly enumerates the documentation required of both sellers and buyers in completion of the closing process, nowhere is a written walk-through acceptance listed as one of those necessary documents.  In other words, the parties are under no obligation to sign such a form, much less one that waives any claims as against the seller, the listing agent and/or their brokerage.  An agent’s attempt to delay or hinder the closing based on a party’s refusal to sign such a form would be of no legal consequence.

From the agent’s perspective, imagine the fallout if he or she unwittingly had their client sign the “mutant” disclaimer form casually presented during or after a final walk-through, only to have the buyer discover a latent or undisclosed defect after closing requiring substantial cost to remediate? Hopefully in that case everyone’s malpractice coverage is up to date when the buyer comes calling with the signed waiver form in hand, wondering why their agent allowed, and even encouraged them, to relinquish their rights to future claims prior to closing.

In a nutshell, since there is no defined standard for the form and content of the so-called walk-through acceptance, the devil is in the details when it comes time to consider what is being tendered and the meaning of its terms. 

The smart agent will always avoid committing UPL (the unlicensed practice of law), not to mention malpractice, and consult a real estate attorney to understand what is being asked of them and their client when presented with one of these mutant “acceptance” forms that attempts to have the buyer waive all claims against the seller and their agent and brokerage after closing.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

Money In The Middle

picture-uh=a3f8b524389a1b66624b1f42f2699cc-ps=f92e749295e9ecb15f731ffd9b1c489It can be a funny feeling, finding yourself stuck in the middle… The middle of the road. The middle of the night. The middle of nowhere.

Or, for a transaction broker, that perfectly legal place: the middle of the deal.

Representing both sides puts the agent smack-dab at the intersection of honesty, fair dealing, and potentially unreasonable (and un-addressable) expectations. Not only are you managing twice the details, but also double the perceptions.

Even with the deal negotiated and the contract signed, middle ground in the middle of a transaction can be tricky to achieve. Given that in some states such a relationship is not permitted, you may be working with clients who are at best skeptical of the arrangement. In every case, accolades and attaboys can whipsaw into discontent and distrust if the agent isn’t careful each and every step of the way.

Under Florida law, it shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.” Transaction brokers, by definition, “provide a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:

  • Dealing honestly and fairly;
  • Accounting for all funds;
  • Using skill, care, and diligence in the transaction;
  • Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
  • Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
  • Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
  • Any additional duties that are mutually agreed to with a party.”

From a purely practical perspective, how does the savvy professional manage this arrangement to everyone’s reasonable satisfaction and a mutually profitable conclusion?

Disclose.  The statutory disclosure form is just the beginning. Knowing this is but one more piece of paper in an extensive pile, a shrewd agent will make and take the time to explain the nuances of the arrangement, and be candid about any prior relationships and dealings with any of the involved parties. The goal, of course, is to work through to an understanding about how this all dovetails with the agent’s legal and ethical obligations to each client in the transaction, and to set realistic, achievable expectations up front.

Refer.  With the agent’s representation being limited, it can help deflect possible conflicts if both seller and buyer engage their own attorney. This ensures that each side has a confidential sounding board squarely in their court, which can in turn be of value to the agent should any potentially controversial issues arise later.

Communicate and update.  Within the boundaries of the agent’s statutory obligations, keeping the lines of communication open and consistent can go a long way toward leveling the playing field and making everyone feel like they’re getting equal time (and by extension, not being left out of anything important). “Reply all” – when possible or practical – can be a valuable tool on many levels, real and perceived, when communicating the mundane details that propel a transaction forward from contract to closing.

Stay above the fray.  Sometimes, and without apparent provocation, the winds can kick up and it becomes hard for even the most seasoned transaction broker to stay the course in the face of deteriorating relations and unreasonable demands. However, in the spirit of honesty and fair dealing, it behooves the agent in the midst of a controversy to take a step back, enlist the guidance and input of objective advocates, and serve as the calm in the center of the storm. Part and parcel of this is mustering the gumption to be measured in your responses, supportive when called upon, and consistent across party lines, all the while staying focused on the clients’ needs, the contract terms, and your legal and ethical obligations to each party.

Call in the big guns.  One of the best tools available to the transactional agent is the one that sits right down the hall – your managing broker. A careful agent will enlist their manager’s assistance up front, and often again throughout the transaction, if for no other reason than to have a second set of eyes (and ears) checking your work and, more importantly, helping you gain clarity and chart your best course when storm clouds start to form on the horizon.


Boiling this all down, while it sounds great in theory to “bring both sides,” the arrangement can be an awkward one if not handled with a deft hand and a keen eye. Suffice to say that like most facets of the agent’s practice, transaction brokerage is as much about legal responsibilities, as it is about intuition and the ability to communicate and manage the process effectively.

For these reasons it behooves the astute agent to take a methodical and thoughtful approach should the transactional opportunity present itself. And, be unafraid to get help when and where needed to ensure that buyers and sellers alike are competently represented, while in turn fulfilling your legal and ethical responsibilities each and every step of the way.

As always, I welcome your questions and feedback, and wish you safe travels on the road to closing.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

Put Your Finger On The Trigger (And Squeeze)

GulfmeadA buyer recently entered into a contract with a long-fuse (6-month) closing, which she negotiated intentionally to accommodate the sale of her existing investment property and facilitate a forward  tax deferred exchange.  The relinquished property was in New York City, a jurisdiction famous for closings fraught with intrigue and delay.  Turns out, our buyer was born under a lucky star, and her Brooklyn property sold and closed – by New York City standards – in record time.

Meanwhile, back in Sarasota, the seller’s agent had repeatedly stated that her client would be able to relocate quickly once the buyer’s New York property sold, so the buyer’s agent dutifully specified in the sale contract that the closing date would be “on or before X date.”  However, when the rubber hit the road and the buyer tried to enforce an earlier closing, the seller – who was enjoying his last, sunny, Siesta Key beachfront summer– decided that the closing date specified in the contract would be just fine with him, and an early move just wasn’t in the cards what with all this nice weather and such…

The moral of this story is that a contract contingency with no triggering mechanism is just a bunch of empty words, the written equivalent of a dog that’s all bark and no bite.  In order to create an enforceable contingency, the closing date provision should have read something like: “Closing shall be X date, although Buyer may elect an earlier Closing Date by giving Seller at least 10 days advance written notice of the earlier Closing Date.”   Short, sweet, to the point, and entirely clear about how the buyer goes about selecting and enforcing an earlier closing.

The same holds true for other types of contingencies.  Case in point, that old favorite “this Contract is contingent upon Seller providing a written real property disclosure within three (3) days of the Effective Date.”    Hard to say what exactly happens if the disclosure is not provided – i.e., does the contract terminate?  Does the buyer get the earnest money deposit back?  Is there a review and termination period subsequent to provision?  Who knows?  There is no stated consequence if the disclosure is not provided, and if it is the buyer’s desire to have a right of termination if the disclosure reveals information not to buyer’s liking, there is nothing stated that gives the buyer this option.  Once again, just a bunch of words that do nothing but make the contract drafter’s shortcomings painfully apparent.

Which all brings me back to the advice I give agents time and time again: your contract is your stock in trade, and if you don’t pay attention to what you’re writing and its practical effects, then you are doing your clients a disservice.  Just as important, you could be opening yourself up to a malpractice claim depending on the importance of the contingency.

As always, I encourage you to consult with an experienced real estate attorney if you have questions about how best to structure your contract and any particular provisions where deposits, closings, and other key elements are involved.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

Debunking Old Myths, Installment 1: Yes, You Need A Survey With A Cash Closing

Somewhere along the line it entered the Realtor lexicon the phrase “you’re paying cash, you don’t need a survey.”

It is as if the method of payment for the property magically changes the fact that…for example…a six-foot corner of the living room encroaches into the platted side yard setback…

It is common knowledge that mortgage lenders require a survey in connection with their loan.  However, there are those Realtors and buyers who believe that on this particular subject the inverse is true when it comes to paying all cash, and the survey requirement is merely the contrivance of mortgage lenders to make buyers’ lives more difficult and expensive.

So just what exactly is a survey, and why do you need one?

The survey is “the process by which corners, boundaries, divisions, and other attributes of land are ascertained and measured.”  A surveyor is the expert who renders his or her opinion as to the location of “property and its improvements and appurtenances.”  The physical rendering of the surveyor’s work is the map of survey.

The map shows a buyer precisely what they’re purchasing in terms of the boundaries of the land, the location of improvements on and about the land, and the rights of others (if any) to use portions of the land.  How one finances the purchase of a property has no impact on the physical reality of the property, its boundaries, improvements, and any third party rights relating thereto.   

Put another way, to decline to obtain a survey is to forgo an understanding about the location of a property’s boundaries and improvements, the nature and extent of any third party rights and uses, and whether there are any collateral issues regarding these or any other matters that would impact the ownership and enjoyment of the property.

It is also important to note that unless the closing/title agent is provided with an accurate survey in advance of closing, the buyer’s title insurance policy will contain an exception to coverage for “[a]ny encroachment, encumbrance, violation, variation, or adverse circumstance affecting the [t]itle that would be disclosed by an accurate and complete land survey.“  Provision of the survey allows the title agent to insure the buyer’s property free and clear of such matters (except any adverse matters indicated on the survey map).

Practically speaking, the most typical survey-related concerns involve easements and encroachments.   

An easement “is a right given to another person or entity to use [a person’s] property.”  For instance, most modern subdivision lots have easements around the perimeter of each lot that allow utility providers access for placement and maintenance of lines and conduits, or allowing the homeowners association or others access to and from the property for maintenance and other matters.  In other cases an easement may exist to provide access to a land-locked parcel by granting ingress and egress over the subject property.

Regardless of the nature of the easement (whether specific or general), it can limit one’s ability to do what they please with their property, so it is important to know where the easement(s) is/are located, and the nature/extent of the easement(s) prior to taking title to the property.

An encroachment occurs when physical improvements (i.e., the home, patio, garage, fence, etc.) are built beyond setback or easement lines within the property, or beyond the boundary line of the property (or likewise when an adjoining property’s improvements are built into the subject property’s boundary).

Some encroachments can be resolved prior to the time of closing, i.e., through physical removal, or through the negotiation of the appropriate agreement, etc.  In some specific cases an endorsement can be added to the final title insurance policy to provide the buyer with protection in the event of a later challenge to an encroachment that is not (or cannot be) removed prior to closing.  Some encroachments are of enough concern that the client may not end up purchasing the property at all.

Of course, the buyer would never have any of these options if a survey revealing the issue was not procured in the first place.

From the selling agent’s perspective, keep in mind that the FAR-BAR contracts specify the time period for acquisition of the survey (Section 9d), and the mechanism for identifying issues of concern and extending the closing date as necessary based on the survey results (Section 18B).  As with the rest of the contract form, it is important to be familiar with these provisions so you are not caught unaware when a survey-related issue comes to light.

From the listing agent’s perspective, always make it a point to ask sellers for a copy of the latest and most accurate survey of the property that they have available, and share this early on with the selling agent, or even attach to the MLS file so the information is readily available to potential buyers and their closing agent.  Also be prepared to discuss and have your sellers disclose any known survey-related issues so they can be addressed as soon as possible and hopefully not delay or hinder the closing.

As always, I encourage you to seek the advice and guidance of an experienced real estate attorney when it comes to understanding and interpreting surveys and their contents, and when having to protect clients’ rights in the event of survey-related issues or concerns.  It goes without saying that we would be delighted to provide such assistance when the time comes.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

The Florida Master Site File: A List For All Persuasions

At least a decade ago the City of Sarasota began a phased survey of its building stock to establish an inventory of historic resources (both actual and potential).  This occurred in connection with the adoption of a historic preservation element within the City’s Comprehensive Plan, which set out as its goal “to identify, document, protect, preserve, and enhance all cultural, historic, architectural, archaeological resources of the City.”

The structures on the completed inventory list were systematically submitted for inclusion on the Florida Master Site File (“FMSF”), which is the State’s “official inventory of historical cultural resources.”  Structures listed on FMSF may be eligible for national or local historic designation, but inclusion on the FMSF does not automatically restrict a property owner’s ability to redevelop or renovate.  Any restrictions are the purview of local authorities.  And, an “owner is not required to approve inclusion in the [FMSF] inventory, [although] neither the owner’s name nor interior information on buildings is required on [FMSF] recording forms.”

Division of Historical Resources FMSF Link

Under the City of Sarasota’s zoning code, certain restrictions exist if a structure is listed on the FMSF.  So, by unilaterally filing a recording form with the State for each structure on its inventory list, the City was able to methodically create a population of buildings for which a hurdle exists should the owner wish to modify, or demolish, the structure.

An owner wishing to demolish a FMSF-listed structure will be required to file the usual demolition application, but the City’s neighborhood and development services department must then conduct a historic review “to determine if the structure is a contributing building to a historic district, eligible for local or national designation or if there are any viable alternatives to the demolition of the structure.”  If a structure is noncontributing, or not eligible for designation, then “the neighborhood and development services director may authorize demolition.”

If the structure meets the criteria for local or national designation, or contributes to a historic district, then a demolition permit “shall not be issued…until [City staff] has issued the historic review, which shall include an evaluation prescribing what measures are required to avoid, minimize, or mitigate the adverse effect on the historic resource.”  Mitigation – as the term is used by the City – “may require the applicant undertake all reasonable measures to save the resource on site or relocate the building.”

The reason this should be of interest to property owners and Realtors alike is that the City’s FMSF inventory is extensive – the following link sets out in detail the large number of FMSF structures within the City limits:

City of Sarasota FMSF Link

In many cases, property owners are not aware that their property is on the list.  These days, with the search for suitable building lots reaching a fever pitch, FMSF status is typically discovered once the property is under contract for sale, or after closing when the buyer applies for a permit – whether for demolition or otherwise – and their application comes to an immediate halt pending staff review pursuant to the ordinance.

And, one cannot assume just because a structure is newer (i.e., 40’s or 50’s vintage), or of questionable provenance, that it is automatically NOT subject to FMSF listing.  On the contrary, the City’s list reveals a large number of non-contributing, non-eligible structures that – for reasons of age, proximity to other structures, adjacent or potential districts, and so forth – have landed on the FMSF list, and are therefore subject to at least one additional layer of review when a permit is sought.

The simplest way to avoid the hiccups inherent in this situation is to refer to the City’s FMSF list up front when taking a listing or researching a potential acquisition.  If it turns out the structure is listed, you will then want to contact the City’s historic preservation specialist (Dr. Clifford Smith, Senior Planner-Historic Preservation, [941] 365-2200, ext. 4361) to schedule a site review to understand options and next steps.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com