Happy Friday and Memorial Day weekend, the official kickoff for summer vacations.

Situation Awareness: Starting January 1, 2024, to be eligible for recording, a deed must include the printed name and address of each witness who signed the deed. Time to update those templates.

1 big thing: Restricted foreign ownership

Source: DALL-E2

Florida’s new Conveyances to Foreign Entities Act becomes effective on July 1, and will complicate closings with foreign buyers from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria.

Why it matters: Traditionally, title agents, trustees, and Realtors could care less about a buyer’s nationality so long as the check cleared. But the new laws will require affidavits, uncomfortable questions, and investigations to ensure compliance.

A government official, entity, political party, business, or person who is from or lives in one of the listed “foreign countries of concern,” are not allowed to own:

  • agricultural land;
  • property within 10 miles of a military installation that is at least 10 acres in size; nor
  • property within 10 miles of critical infrastructure facilities such as airports, spaceports, seaports, chemical plants, power plants, water or sewer plants, etc.

If the property was acquired before July 1, 2023, the owner must register with the State. If they purchase it after July 1, 2023, they must divest their ownership or face criminal charges and civil fines.

The law does not apply to people from the prohibited countries if they are resident aliens (Green Card), or naturalized citizens of the U.S.

  • A foreign person from one of these countries may purchase up to one residential property up to two acres so long as the property is over five miles from a military installation, and the buyers have a U.S. non-tourist visa or asylum and register with the State within 30 days of acquisition.

 

State of play: Title insurers will require an affidavit from anyone purchasing property within 10 miles of a military installation or critical infrastructure facility, stating under penalties of perjury that they are not subject to this law and they are in compliance with the statute. Since it is difficult to know whether a property is located in one of these “red zones,” we expect that this will be a form signed in every closing after July 1, 2023.

Violations of the laws are a second-degree misdemeanor up to a thirddegree felony for the buyer and first-degree misdemeanor for the seller.

Yes, but: Tennessee and other states have passed similar laws. A group of Chinese citizens living and working in Florida have sued to declare the new law unconstitutional.

Our thought bubble: To comply with the new statute but not violate Fair Housing laws, we will require all beneficiaries to execute statements under penalty of perjury each time a new trust is created. They will confirm that they comply with the new law and are not part of the prohibited class of owners. We will be required to sign affidavits at closing to that effect, and we must have assurances from every beneficiary that what we assert is true

The bottom line: There will be more paperwork … and suspicion … around Florida closings after July 1.

2. Floods and solar panels

Source: DALL-E2 

Floridians living close to the coast are seeing flood insurance rates soar, and some with solar panels are receiving insurance cancelation notices.

Why it matters: More homeowners than ever will be required to carry flood insurance on their homes, and more and more are installing solar panels.

By the numbers: FEMA’s funds were running a deficit of over $20.5 million as of last November before the agency had to pay out claims for Hurricanes Ian and Nicole.

Of the 2.2 million flood policies nationwide, 597,967 are in Florida — the most of any other state.

Congress mandated that FEMA implement a new “Risk Rating 2.0” that we’ve written about before that rates properties’ premiums based on additional factors other than just elevation.

One major new factor is proximity to a body of water or the coast, and another one is the cost of rebuilding. So more expensive homes closer to the coast sometimes increase by over 200% while cheaper homes further inland may see decreases in premiums.

What’s next: Florida’s legislature passed laws requiring any home insured by Citizens Insurance also to carry flood insurance by 2027 whether the property is located inside a flood zone or not. And every property owner in Florida should carry flood insurance as we learned last year that anyone could be flooded in Florida. In addition to the National Flood Insurance Program, private flood insurance companies, such as Neptune Insurance, may provide better coverage and cheaper premiums.

Adding insult to injury, homeowners with solar panels are receiving insurance cancelation and non-renewal notices more frequently lately.

Florida is third in the nation for the number of installed solar panels on homes. But those homeowners are receiving notices that their insurance coverage is dropped if:

their roof is over 10 years old;

they’re covered by a carrier that is in that 50% of carriers that won’t cover solar panels; or

they failed to tell their insurer that they installed the panels and then have a damage claim.

The bottom line: Whether it’s flood insurance or solar panels, the best course is to shop around and have an experienced agent on your side to ensure you’re insured.

3. Catch up fast

1. A Philadelphia AirBnB host loses big when a guest refuses to leave, and he has to sue to remove him. Real Estate Investing and Landlord News – YouTube 

2. House flipping coach hit with $400 million fine. Marketwatch 

3. How a US debt ceiling default would eviscerate the housing market for buyers, sellers, and lenders. Realtor dot com 

4. Mortgage rates creep higher as the debt ceiling deadline approaches. HousingWire

4. Pic of the day

Too bad the internet doesn’t have smell-o-vision, or you could smell the wonderful aroma of these Yesterdays Todays, and Tomorrows that are blooming like crazy in the backyard this week.

“A career is what you get paid for. A calling is what you’re made for.” — Steve Harvey

A little history: Years ago, the computer system that selects jurors in Orange County konked out and failed to send out jury summonses. To fix it, the system cranked out a bunch of emergency summonses and sent them out at the last minute. I received one of those the evening before I was summoned to appear for jury duty. I and many others showed up to court the next morning, complaining that we’d received less than 24 hours notice to be there. Everyone was cranky and grumbling about their dumb luck.

Chief Judge Belvin Perry came to the lectern in front of the jury waiting room and apologized for the inconvenience, explaining the problem. Then he told us that we were lucky that we weren’t some of the folks he’d had the Sheriff round up at the local Walmart the day before because no summonses had gone out.

Then he reminded us why we were there. I’m paraphrasing, but he said something to the effect: “We must remember that foreign shores and forest floors are soaked with the blood of those who fought and died for our constitutional right to a trial by a jury of our peers.” He told us that we were all honoring their memory by showing up that day to ensure those rights were carried out.

Needless to say, we all stopped complaining. Each year when Memorial Day rolls around, I’m reminded of Judge Perry’s calling, his words, and the importance of this holiday weekend.

Makes me want to listen to this performance again.

 

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below. Was this email forwarded to you? 

Have an idea or issue to share? Email us. 

Be on the lookout for our next issue

Happy Friday and Memorial Day weekend, the official kickoff for summer vacations.

Situation Awareness: Starting January 1, 2024, to be eligible for recording, a deed must include the printed name and address of each witness who signed the deed. Time to update those templates.

1 big thing: Restricted foreign ownership

Source: DALL-E2

Florida’s new Conveyances to Foreign Entities Act becomes effective on July 1, and will complicate closings with foreign buyers from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria.

Why it matters: Traditionally, title agents, trustees, and Realtors could care less about a buyer’s nationality so long as the check cleared. But the new laws will require affidavits, uncomfortable questions, and investigations to ensure compliance.

A government official, entity, political party, business, or person who is from or lives in one of the listed “foreign countries of concern,” are not allowed to own:

  • agricultural land;
  • property within 10 miles of a military installation that is at least 10 acres in size; nor
  • property within 10 miles of critical infrastructure facilities such as airports, spaceports, seaports, chemical plants, power plants, water or sewer plants, etc.

If the property was acquired before July 1, 2023, the owner must register with the State. If they purchase it after July 1, 2023, they must divest their ownership or face criminal charges and civil fines.

The law does not apply to people from the prohibited countries if they are resident aliens (Green Card), or naturalized citizens of the U.S.

  • A foreign person from one of these countries may purchase up to one residential property up to two acres so long as the property is over five miles from a military installation, and the buyers have a U.S. non-tourist visa or asylum and register with the State within 30 days of acquisition.

 

State of play: Title insurers will require an affidavit from anyone purchasing property within 10 miles of a military installation or critical infrastructure facility, stating under penalties of perjury that they are not subject to this law and they are in compliance with the statute. Since it is difficult to know whether a property is located in one of these “red zones,” we expect that this will be a form signed in every closing after July 1, 2023.

Violations of the laws are a second-degree misdemeanor up to a thirddegree felony for the buyer and first-degree misdemeanor for the seller.

Yes, but: Tennessee and other states have passed similar laws. A group of Chinese citizens living and working in Florida have sued to declare the new law unconstitutional.

Our thought bubble: To comply with the new statute but not violate Fair Housing laws, we will require all beneficiaries to execute statements under penalty of perjury each time a new trust is created. They will confirm that they comply with the new law and are not part of the prohibited class of owners. We will be required to sign affidavits at closing to that effect, and we must have assurances from every beneficiary that what we assert is true

The bottom line: There will be more paperwork … and suspicion … around Florida closings after July 1.

2. Floods and solar panels

Source: DALL-E2 

Floridians living close to the coast are seeing flood insurance rates soar, and some with solar panels are receiving insurance cancelation notices.

Why it matters: More homeowners than ever will be required to carry flood insurance on their homes, and more and more are installing solar panels.

By the numbers: FEMA’s funds were running a deficit of over $20.5 million as of last November before the agency had to pay out claims for Hurricanes Ian and Nicole.

Of the 2.2 million flood policies nationwide, 597,967 are in Florida — the most of any other state.

Congress mandated that FEMA implement a new “Risk Rating 2.0” that we’ve written about before that rates properties’ premiums based on additional factors other than just elevation.

One major new factor is proximity to a body of water or the coast, and another one is the cost of rebuilding. So more expensive homes closer to the coast sometimes increase by over 200% while cheaper homes further inland may see decreases in premiums.

What’s next: Florida’s legislature passed laws requiring any home insured by Citizens Insurance also to carry flood insurance by 2027 whether the property is located inside a flood zone or not. And every property owner in Florida should carry flood insurance as we learned last year that anyone could be flooded in Florida. In addition to the National Flood Insurance Program, private flood insurance companies, such as Neptune Insurance, may provide better coverage and cheaper premiums.

Adding insult to injury, homeowners with solar panels are receiving insurance cancelation and non-renewal notices more frequently lately.

Florida is third in the nation for the number of installed solar panels on homes. But those homeowners are receiving notices that their insurance coverage is dropped if:

their roof is over 10 years old;

they’re covered by a carrier that is in that 50% of carriers that won’t cover solar panels; or

they failed to tell their insurer that they installed the panels and then have a damage claim.

The bottom line: Whether it’s flood insurance or solar panels, the best course is to shop around and have an experienced agent on your side to ensure you’re insured.

3. Catch up fast

1. A Philadelphia AirBnB host loses big when a guest refuses to leave, and he has to sue to remove him. Real Estate Investing and Landlord News – YouTube 

2. House flipping coach hit with $400 million fine. Marketwatch 

3. How a US debt ceiling default would eviscerate the housing market for buyers, sellers, and lenders. Realtor dot com 

4. Mortgage rates creep higher as the debt ceiling deadline approaches. HousingWire

4. Pic of the day

Too bad the internet doesn’t have smell-o-vision, or you could smell the wonderful aroma of these Yesterdays Todays, and Tomorrows that are blooming like crazy in the backyard this week.

“A career is what you get paid for. A calling is what you’re made for.” — Steve Harvey

A little history: Years ago, the computer system that selects jurors in Orange County konked out and failed to send out jury summonses. To fix it, the system cranked out a bunch of emergency summonses and sent them out at the last minute. I received one of those the evening before I was summoned to appear for jury duty. I and many others showed up to court the next morning, complaining that we’d received less than 24 hours notice to be there. Everyone was cranky and grumbling about their dumb luck.

Chief Judge Belvin Perry came to the lectern in front of the jury waiting room and apologized for the inconvenience, explaining the problem. Then he told us that we were lucky that we weren’t some of the folks he’d had the Sheriff round up at the local Walmart the day before because no summonses had gone out.

Then he reminded us why we were there. I’m paraphrasing, but he said something to the effect: “We must remember that foreign shores and forest floors are soaked with the blood of those who fought and died for our constitutional right to a trial by a jury of our peers.” He told us that we were all honoring their memory by showing up that day to ensure those rights were carried out.

Needless to say, we all stopped complaining. Each year when Memorial Day rolls around, I’m reminded of Judge Perry’s calling, his words, and the importance of this holiday weekend.

Makes me want to listen to this performance again.

 

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below. Was this email forwarded to you? 

Have an idea or issue to share? Email us. 

Be on the lookout for our next issue

Title

1 big thing: Bank runs and real estate

If you haven’t heard, two banks failed last week because of old-fashioned panicked bank runs, and the banks couldn’t cover the demanded withdrawals.


Why it matters: For the housing market, the collapse of two banks, one being the third-largest bank failure in US history, meant lower mortgage rates and optimism for even lower rates to come.

  • At least it’s not as bad as 2009 through 2012 when 440 banks failed. Back then, I had a subscription to FDIC’s weekly bank failure notice email blast to find out every Friday evening if one of our banks failed.

What’s next: The Fed meets next week to determine what to do with its lending interest rate.

  • Before the banks’ failures, the consensus was that the Fed would raise its rate another half a point.
    • According to a Bloomberg survey of economists and other experts, there’s an 80% chance that they’ll only raise a quarter of a point with a 20% chance they’ll hold steady and do nothing.
    • No one expects a half-a-point or more increase in the Fed lending rate.
    • The Fed had continued aggressively raising its rate, trying to bring down inflation, until something broke. Now that confidence in the banking system is threatened, the Fed should back off.

Bond traders seeking higher returns and yields turned away from their bearish outlook and bought 10-year bonds. This in turn pushed mortgage rates down.

  • Mortgage rates fell from a high of 7.05% on a 30-year fixed to 6.76% last week.

The bottom line: The recent bank failures have positively affected the housing market. The upcoming Fed meeting will determine whether or not there will be a further decrease in lending interest rates. While mortgage rates don’t always track with the Fed’s rate, it’s a good indicator of things to come.

2. New bill to reduce property fraud

Florida Sen. Jennifer Bradley introduced Senate Bill 1436 on Tuesday to combat real property fraud.

Why it matters: The bill, if it becomes law, would require clerks of court to create, maintain, and operate an opt-in recording notification service.

  • It would also require REALTORs and title agencies to mail notices to property owners at the time of listing and closing.
  • And it gives victims the right to file a lawsuit for quieting title against attempted fraudulently recorded deeds through a summary procedure.
Man reviewing bank code

The recording notification system requirements match the functionality of systems that are in place in many Florida counties. Still, the bill goes into much more detail about how the systems must function.

  • There are no rules currently on how these ad hoc systems are required to appear, be accessed, or work.
  • This would standardize the systems statewide and specify that each person’s e-mail address may be used to monitor at least five different names for recording notifications.

The bill requires Clerks to also provide a simplified form of complaint that victims can complete and file to strike a fraudulent instrument from the records to quiet the title in the victim.

  • The bill doesn’t allow a prevailing party in such quiet title actions to get their attorney’s fees, court costs, or any other monetary compensation from the fraudster. This is consistent with the current laws on the books.

Within five days of signing a listing agreement, REALTORs would be required to send a copy of a signed listing agreement to the address of the property owner shown on the tax records.

  • If the owner was different in the previous year, another statutory notice would be sent to that owner too.

Title agents also would be required to physically mail statutory notices to the owners listed on the tax records within five days of opening a new title order for a sale or refinance of the owner’s property.

Finally, the bill prescribes a form to be used for quitclaim deeds and requires that all deeds include the mailing address of each witness under their signatures.

Our thought bubble: Professionals should adopt the listing and title order opening notifications, in addition to the witness addresses, even if this bill doesn’t pass.

Yes, but: Without funds appropriated to clerks for the electronic notification system and the summary quiet title actions, we don’t see this bill becoming law this year.

3. Catch up fast

life preserver

1) Big banks are coming to the rescue of mid-size First Republic Bank by depositing $30 billion of their own funds for at least the next four months to ensure enough funds are available to cover depositors’ demands for withdrawals. Bloomberg

2) According to Zillow’s recent Home Price Expectations Survey, zoning reforms nationwide would have the biggest and most immediate effect in creating more affordable housing. The Title Report

3) Florida surpassed New York but is still behind California in the top-10 states with the most valuable housing markets. Zillow

4) Insurers slashed Hurricane Ian payouts far below damage estimates, documents and insiders have revealed. The group that did the investigation plans to file criminal charges against those insurers. Washington Post

5) Bank runs happen because humans are like stampeding animals. Our instincts drive us to run even when we have no idea why. When mixed with social media, panic can spread much faster than it did in the past. The Free Press

4. Pic of the day

Tis the season for Orlando’s bougainvillea bushes to be in overdrive. They’re beautiful, but anyone who has ever had to trim one knows how painful they can be if one of their inch-long thorns finds its way through your skin.

The bottom line: As the old saying goes, every night has its dawn, and every rose has its thorn.

Orlando’s bougainvillea bushes
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