Florida Mortgage | Land Surveying Primer ~ Why you should order a survey every time!

ARE YOU BUYING A HOME OR AN ENCROACHMENT??

A Land Surveying Primer

Ok... I am a little biased right now. I grew up in a Real Estate Industry Family...specifically my parents own a Land Surveying Company.

• I remember at 11-12 years old going in and doing tax book research and answering phones...yes I was a master of microfiche then!
• I remember at 14-15 going to the courthouse and looking up deeds and plat maps.
• I remember at 16-17 following the field crew around and watching and helping them spot houses
• I remember at 17-18 after drafting and architecture classes at High School drawing the mortgage inspections (the simpler ones)...

I remember driving out and doing Mortgage Inspections... spotting boundaries, driveways, decks... anything that may have been added either after construction or since the last sale.

Why am I relating this to you??

Because... the mortgage industry has become cheap!

Everyone is worried about closing costs and interior inspections... but who is making sure that you are not buying a property with an encroachment?

Who is making sure that you're buying a home without a huge easement?

No one!!!

Why?? Because lenders are not requiring mortgage inspections... much less full surveys, or pins.

• Mortgage Inspections are rudimentary checks of the house to make sure that whoever built on the land colored within the lines.
• Surveys actually find benchmarks, setbacks, landmarks, centerlines and easements and detail them on paper...they are of legal record if recorded.
• A Staked Survey is when the crew marks the corners with wooden stakes or flags. They are temporary but are important for construction.
• Pins is when the surveying crew does a survey and then puts iron rods, usually capped with an orange plastic cap with the surveyor's initials and license number. These are "permanent".
• Plat... the drawing to the left is a "plat map" ... it shows all the dimensions and directions of a property including where the house sits. Note the dotted lines, those are set backs. Transits, GPS and Triangulation are used to find these dimensions and their latitudes and longitudes.

The biggest issue that arises from not ordering at least a mortgage inspection is border disputes!

What a survey or mortgage inspection helps to prove is whether your neighbor has a deck or driveway on your property and whether the area you wish to expand upon is buildable land!

If you purchase a piece of property and the neighbor has his driveway over the lot line, you can request that he move it.

If he cannot, you have to do a "sell-off" of that portion of the land to the neighbor - which leaves you with an irregular lot and some deed restrictions will not allow you to have a smaller lot than you already have ... this requires rezoning!

You can also create an easement... a legal pass-through allowing your neighbor to use that part of your property. The easement will be written for a number of years and for one specific use.

My community is Zero-Lot-Line... because of this, the Eastern boundary of my lot abuts my neighbor's house. Well... the roof line hangs over my lot so there is a legal "Overhang Easement" drawn onto my property allowing the neighbor to have his roof and a satellite dish overhanging but not attached to my property.

An easement can also be created to provide access to a lot behind another parcel that has no direct road access... and the driveway created would be the responsibility of the property owner to maintain not the person behind them.

Easements can also be for Utilities, Sewers, Phone, Roadways, access, etc...

Because of the complicated nature of land - raw or unimproved - it is up to us - the Real Estate professionals - to encourage the use of Land Surveying techniques. It is up to us to step forward and head off the purchase of land without an inspection of the parcel because then we can ensure a smoother transaction and a peaceful existence for our clients on their properties for the entire term of ownership.

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David A. Podgursky, MBA
The Mortgage Go To Guy!
Your Source for Residential and Commercial Mortgage Loans in Florida

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Florida Property Tax Update: Investor and Commercial Worries

The release of the newest version of the proposed Florida Property Tax Reform should worry a large portion of property owners in the State.

While Florida House Speaker Mark Rubio and Governor Charlie Crist have done a reasonable job accommodating homestead property owners, i.e. full time residents, especially those with property values under $500,000, I feel that there was a failure in this newest revision of the property tax reform to adequately address the issues facing investors and commercial property owners.

Many feel that these people don't need as much attention but I think that the ripple effect of not helping with their tax woes will be felt more directly than Florida Legislators might realize.

Apartment Investors

These investors will have the ugly job of informing their tenants that all this news about how tax savings will pass to them is just not the case.  As property taxes will only lower slightly, and not at all in some cases, Rents will have to remain high to ensure that the properties cash-flow for the investor. The onus of the currently high tax rates on commercial properties will still fall on the pocketbooks of the renters. 

Strip Center & Industrial Park Owners

These Investors are usually using Triple-Net (NNN) Leases which involve CAM (Common Area Maintenance) charges.  The CAM usually includes Maintenance, Taxes, Insurance and other common fees.  This benefits the investor in that they know they are collecting these fees from their tenants...but high inventory and vacancy rates will suffer as CAMs will not be able to be lowered without a true overhaul of the tax codes.

Condo Owners

This is a broad range of property owners but mainly consisting of small and medium businesses.  These businesses are suffering from a double dose of the tax reform blues as they see a much less aggressive tax plan on their homes AND their work places.

Shopping Center Owners

Malls and shopping centers have very high per square foot rents right now plus CAM and sometimes Gross Leases to factor in.  Due to high taxes, some small businesses are settling for lesser centers because of the high cost of doing business in newer Shopping Centers.  Therefore large shopping center owners are seeing higher turnover rates and are now having to offer more incentives to potential tenants. 

Land Owners

Some property owners lease their land instead of selling it or constructing on it themselves.  Fast Food Chains are a popular target for this type of property owner.  They buy the land and lease it to the franchisee who erects the building on it and stays for a certain period.   With high taxes, this is creating a burden on property owners in higher traffic areas as they are the most affected due to higher property values.

A potential fix...

Some of these problems could be addressed by a proposition which was not offered up in the most recent coverage was a change in Assessment practices.  If properties were consistently assessed with the same method and with an As-Used mentality rather than with a Potential Usage mentality, a small commercial property owner would not have as much to fear when the property appraiser comes to reassess after a new record was set for a price of another property down the street. 

Comparables of properties of different Zonings, Usages, and Types should not be weighed in the judgment of an entirely different property.  This is the problem with the Palm Beach County Property Appraiser who prefers to base assessments on Potential use regardless of the fact that a property might have been used in the same way for fifty years and has no reason to believe it will change.

The worst part...

There are definitely more property owners that will not feel the overdue relief promised by Legislators... but what these lawmakers are not seeing is that the indirect effect of high taxes on commercial properties on the middle and lower class is felt when employers cannot afford to create more jobs or offer higher wages... when apartment owners cannot afford to reduce rents... and when small businesses just cannot expand due to ultra high costs making financing property impossible.

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More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
The Mortgage Go To Guy
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

Florida Property Tax Update - AN EARLY VOTE!!

My earlier post Florida Property Tax Update - The Compromise is Near!! details what seems to be the final answer to the Florida Property Tax Reform issue that is currently the main topic of the Florida State House and Senate special session.

Florida House Speaker Marco Rubio, R-Miami, pushed forward a plan that will create a percentage system that will reward property owners with much larger exemptions based on the type of ownerships:

• Homestead
• Non Homestead Residential
• Investment
• Commercial
• etc

The only issue to resolve at this point is what the specific percentages will be for each category of ownership.

The good news out yesterday was that due to the Florida Presidential Primaries being moved up, the House and Senate have requested that instead of waiting for a vote on an amendment for property taxes to wait for the next general election in November 2008, they want to have this amendment available for vote in this upcoming Primary election!!

Yesterday Morning, Governor Charlie Crist, R, signed a bill moving the Florida Presidential Primary election from March to January 29th of 2008.

As that is only 6.5 months away, it looks like Property Tax Relief is coming soon!

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More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
The Mortgage Go To Guy
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida

Affordable Housing Initiatives in South Florida: Part 5 - The beginnings of a FIX

Legislators consider new proposals for appraising properties in Florida

Mark Hollis of the Sun Sentinel wrote an article today about the first step in changes in Affordable Housing - specifically in South Florida's hot climate...

Today, state officials made the first step in lowering property values and possibly kill an ongoing border war. They have decided that County Appraisers should be basing their appraisals on "as built" not "potential use"...

There are people with great properties that are "in the path of progress" or in "eminent domain" areas that are suffering higher tax rates because the Palm Beach County Appraiser Gary Nikolits has determined that their property value is some huge number not because of what the building as improved is worth but what it would be worth for highest and best use - despite the fact that someone might be living there for 30 years and maybe don't want to sell. In the meantime their house is being taxed to death and they're being forced to sell.

Yay!

And the story is... the Broward County Florida Appraiser's scathing comments about Mr. Nikolits were JUSTIFIED according to State Officials.

The Benefit of this is that when the Legislators do roll back taxes to help taxpayers... the value will be rolled back AND assessed values will be restated as AS IMPROVED - not HABU (Highest and Best Use)