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Orlando Real Estate Law Blog

Commercial property values are down

Consumers in Florida and around the country are doing more of their spending online, and many of the nation's biggest brick-and-mortar retailers are struggling to keep their doors open as a result. The commercial real estate market reflects the economy as a whole, and demand for warehouse space is strong while malls across the country are closing. A sluggish retail sector has not helped, and the Federal Reserve has taken action in recent months partly to curb real estate speculation.

The financial sector currently holds more than $3.8 trillion in commercial real estate loans, and more than half of this debt is held by the nation's banks. Reports suggest that American banks with less than $50 billion in assets are particularly vulnerable, and experts say that loans could become more difficult for developers to obtain as risks are balanced and portfolios trimmed.

Collier County to appeal court's decision in eminent domain case

Property owners might be interested in a case that is currently pending in Florida. The case involves Collier County and the lawsuit that was filed and won against it by a subsidiary of CVS Health called RTG and Holiday CVS. In that case, a jury awarded the plaintiffs $6.5 million in an eminent domain case.

Collier County had condemned a portion of the parking lot in order to improve an intersection. CVS and its landlord argued that the 11 parking spaces that were taken from the lot would cause the pharmacy to close by 2015, but it has continued to operate in the location.

Why millennials struggle to afford homes

Millennials in Florida and throughout country would like to buy a house, but they don't seem to be able to afford it right now. That was the takeaway from a survey conducted by Apartment List. It found that 70 percent of millennials who responded had less than $1,000 saved to put a down payment on a house.

It also found that less than 30 percent of those between the ages of 25 and 34 could put a 10 percent down payment on a house in the next three years. Only 15 percent could put that same amount down in the next year. Of those who are between 25 and 34, most said that they don't save money regularly each month. Of those between 18 and 34 who responded to the survey, 40 percent said that they don't save money at all.

Florida family fights back against eminent domain

A Florida family won a minor victory in 2017 in a long legal battle against the city of Cape Coral over an eminent domain land purchase that began in 2014. While the family expects legal arguments may continue, the City Council agreed to drop the matter and purchase a nearby parcel. The case represents hope for landowners who may be facing eminent domain and a reminder that opposing unfair takings does have a chance of success.

In 2014, the Cape Coral City Council tried to purchase a 5-acre piece of property in order to install an irrigation storage tank and pumping facility. They offered $330,000 for the property, but the owners argued that the property was worth much more. Unable to negotiate a purchase, the city council attempted to use eminent domain law to forcibly acquire the land. This attempt ultimately failed when the landowners strongly opposed it. The city voted to purchase a neighboring parcel to save on legal costs.

Good reasons to look at commercial properties

Florida residents may not give commercial property much thought when it comes to becoming a landlord. However, buyers may actually be better served by investing in such properties. First, commercial property values tend to remain more stable over time when compared to stocks or similar investments. This is because both the building and the land that it sits on have value.

Commercial tenants tend to be better than residential tenants because they will handle most maintenance issues on their own. Therefore, an investor may not have to take a phone call in the middle of the night demanding an emergency repair. Knowing that there is a team to maintain the property may also help to preserve its value both now an in the future. Commercial tenants may also pay to insure the property, which may cut costs and result in higher returns on invested capital.

FDOT highway plan criticized by local residents and businesses

The Florida Department of Transportation has modified its plans to increase the capacity of 24 miles of U.S. Route 231, and the agency now says that the highway will only be widened to six lanes between U.S. Route 98 and Penny Road. However, this news has not been received warmly by some local residents and businesses who have accused the FDOT of deliberately releasing the details of its plan way in advance in order to drive down property values in the area.

So far, only segments one and two of the project have secured funding, and the right-of-way acquisitions of 72 businesses, 53 homes and 428 parcels of land are not scheduled to begin until 2021. However, a local property owner says that news of the project and the upheaval that it will bring has already made it extremely difficult to attract business tenants to the area.

Challenging incorrect property valuations

Florida property owners may have to pay thousands of dollars because of tax valuations of their homes. When residents believe that the valuations for their properties are too high, they can challenge them.

Some appraisers incorrectly note features of properties, including listing more bedrooms than the homes have or failing to note conditions that should drop the home's value such as cracked foundations. Homeowners should carefully review the appraisals to see if any mistakes were made, and if there were, they should ask that they are corrected.

Getting a home inspection

People wanting to buy a home in Florida should make sure that the home they are considering receives an independent inspection before it is purchased. Inspections conducted by professionals can ensure the buyer is not saddled with a home that requires extensive repairs.

More than 90 percent of home sales are contingent on a home inspection, and the number of inspections that are performed each year is increasing, based on information from the American Society of Home Inspectors. This data indicates the significant role they have in the process of buying a home.

Escrows and home purchases

When Florida residents plan to purchase homes, they will have their down payments held in escrow until the transaction closes. Escrow involves holding down payments and handling the other money aspects of the transactions. Escrow companies or other independent parties receive the loan proceeds from the lenders and pay those funds and the down payments to the sellers. They also are responsible for transferring and recording the deeds of the property.

When the purchase agreements are being negotiated, the sellers and buyers will normally choose the escrow agent or company that will handle the assorted tasks. The parties may draft instructions for the escrow agent. The buyers then pay the escrow agent their earnest money, and the agent will be given copies of the purchase agreements and other paperwork.

Responding to an eminent domain ruling

Landowners in Florida may have heard of "eminent domain," they but might not be familiar with the intricacies of the concept and the legal issues that surround it. Eminent domain means that the government has a right to take the land of a private citizen for public benefit. The government must pay the landowner fairly for the land. In practice, however, eminent domain is rarely this straightforward.

For example, what constitutes public benefit may be a matter of interpretation. A pipeline might be for public benefit if it carries electricity, but this may not be the case if it is carrying oil. Furthermore, it is not always clear what constitutes just compensation or a fair time limit. Eminent domain could be forever.

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