Real Estate

Sunday, May 22, 2016

Buying or Selling a Home? Top 4 Reasons to Use a Florida Real Estate Attorney

Buying or Selling a Home? Top 4 Reasons to Use a Florida Real Estate Attorney

By Jarryd M. Dalfino, Esquire

May 22, 2016

Home ownership. Whether a secluded ranch house, a millionaire’s mansion, a downtown condo, or the emblematic suburban house with a white picket fence, home ownership is a staple feature of the American dream. In order to achieve the dream of home ownership, the average American must make the single largest financial investment of their lives. For example, in Florida the average price of a home in 2016 is approximately $224,000.

Read more . . .

Monday, January 14, 2013

What the New Tax Law Means to You

As you probably know, Congress avoided the so-called “fiscal cliff” by passing - at the 11th  hour - the American Taxpayer Relief Act of 2012 (the 2012 Tax Act), signed into law by the President  on January 2, 2013. The 2012 Tax Act makes several important revisions to the tax code that will  affect estate planning for the foreseeable future. What follows is a brief description of some of  these revisions - and their impact:

  • The federal gift, estate and generation-skipping transfer tax provisions were made permanent as of December 31, 2012. This is great news for all Americans; for more than ten years, we have been planning with uncertainty under legislation that contained built- in expiration dates. And while permanent in Washington only means that this is the law until Congress decides to change it, at least we now have more certainty with which to plan.
  • The federal gift and estate tax exemptions will remain at $5 million per person, adjusted annually for inflation. In 2012, the exemption (with the adjustment) was $5,120,000. The amount for 2013 is expected to be $5,250,000. This means that the opportunity to transfer large amounts during lifetime or at death remains. So if you did not take advantage of this in 2011 or 2012, you can still do so - and there are advantages to doing so sooner rather than later. Also, with the amount tied to inflation, you can expect to be able to transfer even more each year in the future.
  • The generation-skipping transfer (GST) tax exemption also remains at the same level as the gift and estate tax exemption ($5 million, adjusted for inflation). This tax, which is in addition to the federal estate tax, is imposed on amounts that are transferred (by gift or at your death) to grandchildren and others who are more than 37.5 years younger than you;  in other words, transfers that “skip” a generation. Having this exemption allows you to take advantage of planning that will greatly benefit future generations.
  • Married couples can take advantage of these higher exemptions and, with proper planning, transfer up to $10+ million through lifetime gifting and at death.
  • The tax rate on estates larger than the exempt amounts increased from 35% to 40%.
  • The “portability” provision was also made permanent. This allows the unused exemption of the first spouse to die to transfer to the surviving spouse, without having to set up a trust specifically for this purpose. However, there are still many benefits to using trusts, especially for those who want to ensure that their estate tax exemption will be fully utilized by the surviving spouse.
  • Separate from the new tax law, the amount for annual tax-free gifts has increased from  $13,000 to $14,000, meaning you can give up to $14,000 per beneficiary, per year free of federal gift, estate and GST tax ± in addition to the $5 million gift and estate tax  exemption. By making annual tax-free transfers while you are alive, you can transfer significant wealth to your children, grandchildren and other beneficiaries, thereby reducing your taxable estate and removing future appreciation on assets you transfer.  And, you can significantly enhance this lifetime giving strategy by transferring interests in a limited liability company or similar entity because these assets have a reduced value  for transfer tax purposes, allowing you to transfer more free of tax.    

For most Americans, the 2012 Tax Act has removed the emphasis on estate tax planning and put  it back on the real reasons we need to do estate planning: taking care of ourselves and our  families the way we want. This includes:  

  • Protecting you, your family, and your assets in the event of incapacity;
  • Ensuring your assets are distributed the way you want;
  • Protecting your legacy from irresponsible spending, a child’s creditors, and from being  part of a child’s divorce  proceedings;
  • Providing for a loved one with special needs without losing valuable government  benefits; and
  • Helping protect assets from creditors and frivolous lawsuits.   

For those with larger estates, ample opportunities remain to transfer large amounts tax free to  future generations, but it is critical that professional planning begins as soon as possible. With  Congress looking for more ways to increase revenue, many reliable estate planning strategies  may soon be restricted or eliminated. Thus, it is best to put these strategies into place now so that  they are more likely to be grandfathered from future law changes.   

Further, as is well publicized, the 2012 Tax Act included several income tax rate increases on  those earning more than $400,000 ($450,000 for married couples filing jointly). Combined with  the two additional income tax rate increases resulting from the healthcare bill, income tax  planning is now more important than ever.   

If you have been sitting on the sidelines, waiting to see what Congress would do, the wait is  over. Now that we have increased certainty with relatively “permanent” laws, there is no excuse postpone your planning any longer.  If we can help, let us know.

Tuesday, February 7, 2012

Mortgage Relief Deal Under Discussion

Mortgage Relief Deal Under Discussion

If Florida chooses to opt in, there could be some guaranteed relief ahead for Florida homeowners struggling to pay their mortgage.  Check out the article by clicking here.

Tuesday, February 7, 2012

Top 3 Real Estate Tips for Small Businesses

Top 3 Real Estate Tips for Small Businesses

For the vast majority of small businesses, the company’s first and only real estate transaction is entering into a lease for commercial space. Whether you are considering office, manufacturing or retail space, the following three tips will help you navigate the negotiation process so you can avoid any unpleasant surprises or costly mistakes.

“Base Rent” is Not the Only Rent You Will Pay
Most prospective tenants focus their negotiation efforts on the “base rent,” the fixed monthly amount you will pay under the lease agreement. You may have negotiated a terrific deal on the base rent, but the transaction may not be the best value once other charges are factored in. For example, the majority of commercial lease agreements are “triple net,” meaning that the tenant also must pay for insurance, taxes and other operating expenses. When negotiating “triple net,” ensure you aren’t being charged for expenses that do not benefit your space, and that you are paying an amount that is in proportion to the space you utilize in the building. Another provision to watch for is “percentage rent,” in which a tenant pays a percentage of revenue in excess of a specific amount. This may not be a bad thing, as it provides the landlord with an incentive to help ensure your company is successful.

There’s No Such Thing as a “Form Lease”
Most commercial property owners and managers offer prospective tenants a pre-printed lease containing your name and various terms. They often present these documents and adamantly explain that it is the landlord’s “typical form lease.” This, however, does not mean you cannot negotiate. Review every provision in the agreement, bearing in mind that all terms are open for discussion and negotiation. Pay particular attention to the specific needs of your business that are not addressed in the “form lease.”

Note the Notice Requirements
Your lease agreement may contain many provisions that require you to send notification to the landlord under various circumstances. For example, if you wish to renew or terminate your lease at the end of the term, you will likely owe a notice to the landlord to that effect, and it may be due much earlier than you think – sometimes up to a year or more. Prepare a summary of the key notice requirements contained in your lease agreement, along with the due dates, and add key dates to your calendar to ensure you comply with all notice requirements and do not forfeit any rights under your lease agreement.



Friday, December 18, 2009

Should I Pay My Mortgage?

This would have seemed like a strange question even 5 years ago.  But I talk to people on a regular basis who are asking that question – “Should I pay my mortgage?” – even some who have the short-term ability to do it.  Florida is one of the highest ranking states in “strategic defaults,” i.e., intentional defaults where the homeowner stops paying even though they can afford it (at least by someone else’s analysis).  In these economic times, there are a number of factors to consider.  A helpful article on the issue appeared recently in the Wall Street Journal.  The authors suggest these factors to consider:

·       Am I willing to rent for at least 3 to 5 years while waiting to qualify for a home loan again?

·       Can I accept a blot on my credit record for seven years, one likely to make any loan I need more expensive?

·       Am I willing to take the risk that my lender will continue to dun me for the balance owed on the mortgage after the foreclosure process is completed?

·       How much can I save by renting, taking into account the tax deduction I get for mortgage interest and real estate taxes?

·       Do I have a moral responsibility to keep my legal financial commitments?

·       What will be the effect of a foreclosure on my neighbors and community?

Click here to be directed to the full article in the WSJ.

If you need advice or assistance with a loan modification, short sale, or foreclosure defense, we at Aman Law Firm can help.  Just give our office a call and schedule a consultation.

Sunday, November 23, 2008

Estate Planning and the Enhanced Life Estate Deed


One of my clients is an elderly divorcee. She recently contacted me with several concerns about her estate. Her primary concern was that she wanted to keep her home out of probate when she passes away. Like most people, she doesn’t like the idea of her property being tied up in legal limbo for months before her beneficiaries (in this case, her three sons) take possession of the home. She was advised by another attorney to set up a trust, put her home (her only asset of real monetary value) into the trust and then manage the trust until she passes away. She brought the matter to me as she does with all of her legal concerns. I advised her that a simpler way for her to handle the matter might be to execute an “Enhanced Life Estate Deed” also known as the “Lady Bird Deed” (named in honor of former First Lady, Ladybird Johnson) or a “Transfer on Death Deed.”

What is an Enhanced Life Estate Deed?
An Enhanced Life Estate Deed is a document that would deed my client’s home to her children but reserve for my client a life estate coupled with the ability to sell the property at any time. This is called an “Enhanced Life Estate.” In layman’s terms, this means that (1) my client still owns the property; (2) my client can sell the property at any time without notifying her beneficiaries; and (3) if my client never sells the property, the house will pass directly to her beneficiaries after she passes away without going through probate.

Florida, Texas, Ohio, California, Kansas and several other states now accept this form of conveyance. In these states it is a recommended alternative to the traditional life estate deed. Of course, where a life estate can result in unwanted capital gains taxation, it should not be used, and other forms of planning should be considered (such as a living trust).

Lady Bird Deed v. Quitclaim Deed 
In the past, people have used a Quitclaim Deed in an attempt to avoid probate. The Quitclaim Deed was supposed to make things easier for beneficiaries. A Quitclaim Deed deeds property to one’s children while the parent retains a life estate interest. The problem with the Quitclaim Deed is that my client would not be able to sell or encumber (e.g., mortgage) her property without the consent of her beneficiaries.

Further, creditors of my client’s beneficiaries could obtain an enforceable lien against her home because the beneficiaries could not claim the home as homestead property. Also, spouses of my client’s beneficiaries could claim an interest in the property, either upon their husband’s death or in the event of a divorce.

The Enhanced Life Estate Deed does not share the above pitfalls. For more information about the difference between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, please contact our office at 813-265-004, and ask for Jeff Aman.

Other Benefits to a Lady Bird Deed
The Enhanced Life Estate Deed has several other benefits including:
(1) bypassing probate;
(2) it does not result in capital gains for the beneficiaries because they will not receive any value until my client passes away. When she passes away, her beneficiaries take the home at a “stepped-up basis” – not my client’s original basis. A “stepped-up” basis is the value of the property on the day of my client’s death;
(3) it does not open up the property to the beneficiaries’ creditors during my client’s lifetime because the beneficiaries have no interest until my client has passed away without selling the home;
(4) it allows my client to sell her home at any time, compared to a regular life estate where she would not be legally entitled to sell her home.

Language Creating the Deed
Attorney’s Title Insurance Fund has recognized certain specific language that must be included to validate an Enhanced Life Estate Deed. Without the specific language the deed will be declared invalid for transferring the real estate in the manner outlined above.  We charge our clients $350.00 to meet with you, prepare and record the deed.

Friday, November 14, 2008

Escrow Disputes for Realtors


Q: At what point do I know whether an “escrow dispute” has arisen between the parties?

A: Essentially, there is an escrow dispute when (1) one of the parties refuses to close and (2) both parties are unwilling to sign a written authorization to the Escrow Agent as to the disbursement of the funds being held in escrow. When it appears that one or both parties will not close, the Escrow Agent (or one of the Realtors) should send a proposed Release and Cancellation of Contract (FAR Form RC-3). The FAR Form is signed by Buyer and Seller and provides for: (1) termination of the Contract; (2) release of the Realtors; and (3) disbursement instructions for the escrowed funds. Without this form or a similar disbursement authorization signed by Buyer and Seller, the Escrow Agent should not be expected to disburse any funds to either party.

Q: As an agent for one of the parties, or transaction broker, what is my role in the event of an escrow dispute? What should I do?

A: Once the escrow dispute has arisen (see above), it could be argued that the role of the Realtor has been concluded, unless due to a provision in the listing agreement or the contract the Realtor has a claim for all or a portion of her commission. Practically speaking, however, even if there is no hope for a commission on this transaction, most diligent Realtor professionals will continue to stay “in the loop” with their clients through the outcome of the escrow dispute. Parties should always be advised to seek the informed counsel of a competent real estate attorney to advise and possibly represent them as to the escrow dispute. After the dispute has arisen, it is the duty of the party or her attorney to deal with the other party and/or the other party’s attorney, and the Escrow Agent. The Realtor should not be expected to assert her client’s position in the dispute, or provide legal advice.

Q: What is the “standard procedure” for handling an escrow dispute? How is it typically processed and resolved? How long does it take?

A: It is really up to the Escrow Agent (or the parties) to move the escrow dispute toward resolution. The Contract for Purchase and Sale will set forth the appropriate procedure. Usually, there is a mediation expectation, followed by some form of binding arbitration or recourse to the local courthouse. For example, in the standard FAR Residential Contract, the parties have 30 days from conflicting demands to mediate the dispute. Failing that, the “Escrow Agent will submit the dispute, if so required by Florida law, to Escrow Agent’s choice of arbitration, a Florida court or the Florida Real Estate Commission.” Note that under the FAR Contract, the Escrow Agent chooses the forum for resolving the dispute. Other forms of contracts (e.g., FAR/BAR, Vacant Land, Commercial) vary slightly in the disposition of an escrow dispute. The relevant section of the contract in question should be referred to in each instance. In general, however, if the parties cannot settle at mediation, it could take months to reach a resolution. Parties should also be aware that the Escrow Agent is entitled to reimbursement for its reasonable attorney’s fees and costs incurred in connection with the escrow dispute. Therefore, there is ample motivation to settle early in order to avoid diminution of the available escrow funds.

Aman Law Firm assists clients in the greater Tampa Bay area, including Tampa, Lutz, Land O' Lakes, Wesley Chapel, Hillsborough, Pinellas, Pasco, and Polk Counties, and throughout the State of Florida.

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282 Crystal Grove Blvd. , Lutz, FL 33548
| Phone: 813-265-0004
14502 N. Dale Mabry Hwy, Suite 200, Tampa, FL 33618
| Phone: 813-265-0004

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