No reason to Veto?

In Buyers, closing, Condo rules, Distressed Sales, fannie mae, FHA, First-Time Buyer, flood insurance, florida, Florida Legislature, foreclosure, government, Home Buyer, home sellers, HUD, hurricane, insurance, lenders, Loan Originator, mediation, miami, miami beach, Military, modification, mortgage, new rules, real estate, Sellers, Short Sales on June 2, 2010 at 3:52 pm

Governor vetoes 2 real estate bills, signs 2

TALLAHASSEE, Fla. – June 2, 2010 – Out of the blue. That’s how Florida Realtors lobbyists describe their reaction to Governor Crist’s veto yesterday of HB 545, a Realtor-supported measure that would have repealed an onerous disclosure for coastal property owners.

“We had not heard from one group or individual who was opposed to HB 545, so we are quite surprised the governor would veto the bill and expose hundreds of thousands of property owners to safety issues and higher premiums, and increase legal liability and litigation for sellers and real estate practitioners,” says John Sebree, vice president of public policy for the Florida Realtors. “We’re talking with the bill sponsor to see if there are enough votes in the Florida House and Senate to override the veto. It’s a long shot, but one worth taking considering the damage this bill will cause when it takes effect Jan. 1, 2011.”

HB 545 by Rep. Pat Patterson (R-DeLand) sought to repeal the windstorm mitigation disclosure – one of the last remnants of the My Safe Florida Home program, which expired in 2009 due to lack of funding. Effective Jan. 1, 2011, sellers of home located in wind-borne debris regions must provide buyers with the building’s hurricane resistance rating and three improvement plans, including costs. Inspectors are not registered with the state and the inspection process has been widely criticized for “widespread, fraudulent and unethical behavior,” according to a study by the Florida Commission on Hurricane Loss Projection Methodology.

“The inspection process is rife with fraud and provides buyers with inaccurate information 55-80 percent of the time,” says Trey Goldman, Florida Realtors’ legislative counsel. “The veto will ultimately result in a less efficient insurance market, higher premiums for everyone and possibly the loss of life if homeowners fail to evacuate during hurricanes because they mistakenly believe their homes are more wind resistant than they really are.”

In other news, Gov. Crist signed into law the Distressed Condominium Relief Act (SB 1196) that repeals a requirement that individual unit owners carry hazard insurance and seeks to move excess condo inventory by allowing investors to purchase blocks on condos without getting tagged as a “developer” and taking on a developer’s responsibilities and liabilities. It also lets a condo association decide whether or not to retrofit a building with sprinkler systems and removes mandatory retrofits of sprinkler systems in condos over 75 feet.

The governor also signed HB 965, legislation that requires property appraisers to adjust the assessed value of single-family residential properties affected by tainted drywall. If the home cannot be used for its intended purpose without remediation or repair, the value of the property must be assessed at $0. To qualify, a home must have imported drywall that causes a significant impact on the just value of the property. Also, the buyer must not have been aware of the presence of the tainted drywall at the time of purchase.

Finally, as expected, the governor vetoed SB 2044, legislation backed by the insurance industry that, among other things, would have allowed insurance companies to avoid the lengthy process of filing a rate increase with state regulators. Under the failed bill, property insurance rates could have increased up to 10 percent per year.

“I am most concerned about the expansion … that makes it easier to increase Floridians’ premiums,” Crist said in his veto message. “During these very difficult economic times, Florida’s consumers should not have to be concerned with an additional premium increase to their policy. Additionally, the bill makes troubling changes to the way (hurricane) mitigation discounts are applied. Specifically, responsible Floridians who have already made investments to harden their homes could be unfairly penalized.”

The bill would have also allowed insurance companies to pay only a part of a claim upfront, withholding the balance of the payment until repairs have been completed.

However, insurers can still raise consumers’ rates early in expectation of a rate increase approval from state regulators. If Crist had signed the bill, insurance premiums could not have gone higher until an increase is official.

The bill also attempted to reduce insurance fraud by allowing insurance companies to pay only part of a claim upfront, withholding the balance of the payment until repairs have been completed. Insurers say that policyholders sometimes receive claim monies but fail to make the necessary repairs.

Reprinted by Permission: © 2010 Florida Realtors®

Write to your state representative and to Governor Crist to weigh in


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