Shoot First, Ask Questions Later

Some say the road to hell is paved with good intentions.

Like in the case of the well-meaning Realtor who gets their client committed to a home purchase, without the client first having figured out what to do with their lease that doesn’t expire until after closing.

When eventually confronted with the question of why the landlord is unenthusiastic about letting the client out of the lease early, and demanding payment of the rent through the conclusion of the lease, an uninformed Realtor just shrugs and offers platitudes like these:

“Florida law allows for an automatic termination of the lease once you buy a new home.”

 “The standard lease provides for early termination if you buy a new home.”

 “That’s unfair, the landlord can’t do that.”

No one ever said life is fair, especially since there is no such thing as a “standard lease,” and Florida law says absolutely nothing about what happens when a tenant purchases a new home.

Suddenly, the Realtor finds their client in a costly quagmire. What to do?

Put in the most basic terms, a lease – written or oral – is an agreement to pay for the use of someone’s real estate for a specified period of time. Florida’s landlord-tenant act (Florida Statutes ss. 83.40-83.683) governs residential tenancies when there is no written agreement. Other than some basic requirements as to how to deal with advance rents and deposits, and certain basic maintenance duties required of a landlord, what two contracting parties agree to between themselves is entirely up to them.

For this reason, each lease is as unique as the people agreeing to it. From the fill-in-the-blank version you purchase at Office Depot, to the FAR-BAR template, to a lawyer-prepared agreement, each says what it says in its own way, and there is no mandate in the Florida Statutes as to what that agreement must contain.

Put another way, each lease is fact-specific, so you can never assume that what one says or does will be the same for another.

From the savvy Realtor’s perspective, while the client’s existing lease is not really their concern, the Realtor will undoubtedly be the first person the client calls when the landlord refuses to let them out of the lease early, and they’ll likely demand to know how their Realtor could commit them to a purchase knowing they still had a lease.

As is the case with any healthy relationship, a little bit of communication can be a good thing. Should you find yourself in this situation, a good starting point would be to take the following steps:

  • Encourage the client to get their situation figured out in a way that makes it comfortable for them to proceed with their planned purchase.
  • Remind them to read their agreement and understand whether or not they have a termination option, and if they do, how is it exercised, and what will it cost.
  • If they do not understand their lease, they should call their landlord, or better yet, seek the advice of a real estate attorney to gain a better understanding of their options before they approach the landlord and/or the purchase offer you’re working on for them.
  • Once they understand their options, they should pursue some sort of written resolution of the lease – either on their own, or with their real estate attorney’s assistance.

Meanwhile, document the action you’ve recommended so there is no question later about what advice you gave. It can be as simple as: “since you wish to purchase a home while you’re still obligated under a lease, we discussed that you’re going to take the following action to deal with your lease…. And, once you have this figured out, you will let me know when and how you wish to proceed with a purchase offer.”

Short, sweet, to the point, making it clear it is the client’s responsibility to deal with their lease, and under no circumstances are you promoting them making a large purchase commitment without first understanding their existing rental obligation and its financial impact.

Further, this is not a suggestion that you insinuate yourself into the lease termination discussion or process. Your goal is simply to make sure your client recognizes their existing obligation, and takes some action to address the situation so they don’t wake up weeks down the road with a major purchase obligation layered on top of a potentially significant lease obligation.

As always, never hesitate to consult with an experienced real estate attorney if you have questions about your role in helping clients with an unresolved lease commitment, or likewise if your clients need assistance achieving a resolution of their lease in order to move forward on their new home purchase.

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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 Day The Wall Came Crashing Down

GetMedia[1]A client was awaiting closing on the sale of her historic home when one day, lo and behold, the rustic old wall along a perimeter of the property came crashing down.

Ay yi yi.

Just one more headache in the protracted process of selling a home with a long and storied history, but one with the kind of deferred maintenance that caused the owner’s (shrewd) Realtor to demand an As-Is Residential Contract for Sale and Purchase for all offers received.

According to that form: “Except for ordinary wear and tear and Casualty Loss, Seller shall maintain the Property, including, but not limited, lawn, shrubbery and pool, in the condition existing as of Effective Date (“AS IS Maintenance Requirement”).”

So what to do in a case like this where the wall was in an obvious state of disrepair at the outset, but just couldn’t hold itself together long enough for the closing to occur?

Put another way, given the contract’s AS IS Maintenance Requirement, how do you bring something like this back to its same decrepit state as of the Effective Date, or quantify the expense for doing so?  By extension, does it then become the seller’s obligation to provide a new replacement for what fell apart in the interim, the cost of which can be substantial?

In this case, no contractor who visited the property was able (or willing) to give an estimate for anything other than a proper repair and replacement.  What ended up transpiring was a negotiated credit that covered a portion of the estimated repair cost.  What first took place was quite a bit of conversation about the blurry nature of the parties’ respective rights and obligations under the contract, and what anyone was legally required to do.

From a technical perspective, the contract probably cannot reasonably be expected to give explicit guidance on this subject matter.  What this does, though, is land everyone smack dab in one of those gray areas that lawyers love (we make a good living in that space), and Realtors detest (“Just tell me what to do so we can get this closed!”).

What, then, is the smart listing agent to do when preparing to present a property with known (or anticipated) structural challenges?  Here are a few thoughts to get you started:

  1. Take a good long look around for readily observable issues, such as active leaks, foundation cracks, shaky fences and walls, etc.  The things any regular person might be reasonably expected to notice.
  2. Ask the seller to be thorough and candid in filling out their disclosure, and include any known and/or observable issues about which they have concern.
  3. Require all offers to be submitted using the As-Is Residential Contract for Sale and Purchase.
  4. Consider specifically addressing trouble spots in the contract, i.e., “Perimeter wall is specifically excepted from Seller’s AS-IS Maintenance Requirement and will be conveyed to Buyer in its as-is condition at the time of Closing, regardless of whether the condition has changed beyond the extent of ordinary wear and tear.”

This is not to suggest that the agent is taking the place of the home inspector, or the seller’s disclosure is meant to take the place of the buyer’s thorough review of the property.  Where the agent wants to end up – to the extent this can be achieved through clear and concise contract drafting – is in a bright line situation where one and all agree that items of concern that could deteriorate substantially between the Effective Date and Closing are not something for which the seller is financially responsible (think active roof leak…).

As always, you are encouraged to seek the advice of an experienced real estate attorney should you run across issues such as these and need a helping hand when the time comes to respond to an offer.  Bright lines are best established when there is time to think through the situation, rather than when deadlines are looming and pieces of history come crashing down around you.

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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

Performing At Your Peak: Doing Laser Surgery With A Machete

Imagine being at the dermatologist’s office to get a mole removed, and she walks in brandishing a machete, rather than a scalpel?! Chances are you may think that even the most skilled technician might end up taking more of you with her than was intended (or necessary) for such a precise operation.

In the real estate game, the same thing happens when the time comes to excise a contingency from a ratified contract. Sellers’ markets beget demanding listing agents who, in return for a hard-fought concession, insist that a specific contingency – or worse, “all contingencies” – be lifted.

Eager to please and keep the deal rolling toward its intended conclusion, the unwitting agent who uses a machete, rather than a laser, to accomplish this task can back into a heap of unintended consequences.

Periwinkle back

Aside from the obvious inspection and financing contingencies within the FAR/BAR contract forms (each of which contingencies contain their own nuances and variables), agents tend to forget about those other matters upon which the contract is contingent, such as:

  • The seller’s obligation to convey marketable title
  • Survey-related issues
  • Permit close-out
  • Flood zone determination and insurability

…and so forth and so on.

Take, for example, the occasion under the regular FAR/BAR repair-limits contract when a seller agrees to address inspection-related matters, and the listing agent requests that in return the buyer “remove the inspection contingency.” A simple addendum saying “Buyer removes the inspection contingency in return for Seller repairing XXX prior to Closing” is defective for a variety of reasons, including the following:

  1. The contract form provides various specific definitions, including the meaning of “Inspection Period” within the “Property Inspection and Repair” section. There is no definition of “inspection contingency.” Therefore, such a reference is both overly broad, not to mention ambiguous.
  2. There are three different inspection topics within this section (“General Inspection,” “WDO Inspection,” and “Permit Inspection”), each with its own repair limit, and each dealing with a specific subject matter. A blanket removal of all inspection contingencies would theoretically terminate, for example, the obligation of a seller to correct costly permit or municipal lien violations that may exist or, worse yet, which may not have been revealed because the municipal lien search was not yet in hand when the General Inspection was completed and the repair concession negotiated.
  3. The walk-through inspection right (and Seller’s obligation to provide access for same) is contained in the same section of the contract. Depending on whether or not the parties are getting along, a blanket removal of “all inspection contingencies” could be viewed by an antagonistic seller as a waiver of the buyer’s final walk-through right and seller’s obligation with respect to same.

Similar care should be taken when assigning obligations to and as between parties. Take the situation where the responsibility for selecting and paying for title services is negotiated back and forth, and all three of the check boxes within the FAR/BAR contract’s Title Evidence and Insurance section end up deleted and replaced with a simple “Seller to pick and pay for title.”

In this case, kudos to the selling Realtor for pulling off a coup (whether or not intended) by moving the lender’s title insurance expense – a buyer cost even when the seller selects and pays for owner’s coverage – to the seller’s side of the balance sheet.

And, shame on the listing agent who wasn’t familiar enough with the standard contract form to realize that this deceptively simple alteration deleted a benefit contained in the pre-printed provision, and instead obligated their client to higher closing costs.

I could go on and on with stories of such unintended consequences where well-meaning agents were led astray by demands for some sort of action and the desire to get something – anything – in writing in order keep a deal moving (just imagine the fallout from the following addendum language, which I have seen used on far too many occasions: “Buyer lifts all contingencies to closing and Buyer’s earnest money deposit is non-refundable”…).

Suffice to say that too great an understanding of the standard contract form set is never a bad thing, and the knowledge of each form’s contents and inner-workings breeds nothing but a better intuition about how to deal with situations where a general request (or demand) can potentially lead to disaster.

As always, we are eager to assist with your contract and closing needs, and every request for assistance with contract formation or drafting is an opportunity for us to educate our agent friends about this essential, but highly technical, aspect of their business. Peak understanding leads to peak performance (not to mention satisfied, long-term clients), and we appreciate every chance we have to help our agents reach for the sky!

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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

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

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

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