Managing Earnest Money

by Isaac Benmergui, Esq on May 28, 2015

Managing Earnest MoneyEarnest money is the sum you are willing to hand over in cash with an offer to buy a home. When the seller accepts your offer, a signed contract and the earnest money check holds the property for you while all the details are worked out for closing. At closing, your earnest money is applied toward your down payment.

Currently, the South Florida residential market is hot, with prices on the rise and single-family inventory limited. In hot markets, sellers are not as likely to keep your earnest money because there are many more buyers out there. If you can’t come to an agreement, they simply return the money and everyone parts ways.

In a sluggish market, the buyer has more choice, and sellers want to hang on their buyers. Here are some rules to abide by when you are considering writing out an earnest money check:

  1. Don’t make the check for more than you are willing to lose. If you go big, you may not be willing to back out of a bad deal because of what’s at stake. Your earnest money should be just enough to show you are serious, but not so much that you can’t afford to lose it. Remember, if the seller wants more, all they have to do is ask. You can comply or counter.
  2. Speak with the closing agent before writing your check. Make sure the agent who will be holding your check agrees to honor unilateral rights to cancel before you write the check. Be clear on whether or not their company policy requires the seller to agree to release the check before you make it out to them.
  3. Know your legal outs. Most contracts give contingencies based on which you can cancel, but they will expire early in the contract. Before you hand over earnest money, ask for all the contingencies, expiration dates, and the forms you might need to cancel the contract.

Never rely on your financial contingency for return of your earnest money. Although you may not be obligated to purchase the property if your financing doesn’t come through, you likely won’t get your earnest money back. Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have close to 10 years of experience handling Real Estate, Personal Injury, Immigration and Commercial Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Rent on the Rise in South Florida

by Isaac Benmergui, Esq on May 27, 2015

Rent on the Rise in South FloridaThe weather isn’t the only thing getting hot in Florida—the rental market is heating up, too.

A few things are driving the rush to rent: vacancies are decreasing, which means demand is outgrowing the supply of rental space. Second, single family construction has been down as space runs tight and there are few new places to build. And even though condominium construction is on the rise—new construction will nearly double the Downtown Miami inventory–most of the owners are foreign and planning to use their new units as seasonal housing, not as rentals.

So what does this mean if you have space to rent? When rent is on the rise, shorter lease terms are favorable to the landlord. You also don’t need to spend as much on marketing, since more demand means even the smallest announcement will attract qualified renters.

You can also be more selective about your renters, but just be sure that you don’t violate any aspects of the Federal Fair Housing Act. Keep your criteria related to financial and credit-related specifics and not lifestyle-related ones. High demand for rentals also means you can have additional restrictions on your rental, such as not allowing pets.

But don’t let the hot market cloud your judgment. Just because the prospective renters you are seeing have great credit and payment history or good references doesn’t mean you should skimp on the important parts of the process. Always use a rental application, do background and reference checks, and have a lease agreement specific to your property and it’s conditions. Don’t ever use prefab or “standard” contracts found online, as they may not conform to state law and they may leave out important provisions of your lease.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have close to 10 years of experience handling Real Estate, Personal Injury, Immigration and Commercial Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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What is a TRIM notice?

by Isaac Benmergui, Esq on May 26, 2015

What is a TRIM notice?Florida is a unique state in that nearly all of its tax dollars come from property value. It doesn’t take a state income tax, has just a 6 percent sales tax, and keeps state spending low; state spending per capita is the lowest in the United States. The state does not collect property tax in Florida, but the cities and counties do.

Florida property taxes are among the highest in the nation, so as you can imagine residents keep an eye on them. The Truth in Millage act, or TRIM, guides local governments on how to set tax rates. It also helps residents see exactly what portion of their taxes is going up due to increases in property value and due to increases in special assessments by local taxing agencies.

Every August, Florida taxpayers receive a notice in the mail stating their assessment for current and previous years and any proposed tax increases. This notice is important for two reasons. First, if your assessment is higher than what the market will support, you have 25 days from the mail date to appeal your assessment. If you can’t make the appeal deadline, you can also challenge your assessment in court. This gives you additional time to research complex legal claims, but it will be more expensive than an appeal.

If you have no issue with your property assessment, but wish to voice your opinion on special assessments by local taxing authorities, you can attend the initial budget hearing for your area in mid-September.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have close to 10 years of experience handling Real Estate, Personal Injury, Immigration and Commercial Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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My real estate agent is a CCIM. Do I still need an attorney?

by Isaac Benmergui, Esq on May 25, 2015

My real estate agent is a CCIM. Do I still need an attorney?Real estate agents come in all varieties of expertise and levels of education. In addition, the laws regarding licensing are different in every state, just like the bar for attorneys is different in every state. For most residential real estate transactions, a real estate agent is enough.

A CCIM is a higher threshold of expertise that a commercial real estate agent can hold. In fact, some refer to it as the “PhD” of real estate. However, it’s important to note that a CCIM in not an educational degree like a doctorate or a J.D. CCIMs obtain additional training credits in market analysis, negotiation, and investment analysis. Attorneys can also carry a CCIM designation, but they don’t have to in order to be able to handle complex commercial transactions.

When dealing with commercial real estate, you need to be able to interpret contracts and be able to understand their legal ramifications, know whether the contract you’re dealing with is legally enforceable or not, and be able to get legal opinions on your different options. These are all things a real estate attorney can do but a real estate agent cannot.

Real estate agents are great for specific area knowledge and analysis, but they can’t help you with complex legal issues involving tenants, leases and legal questions.  Another benefit is that attorneys are paid hourly or with a flat fee per service, not based on commission, which means they have no conflict of interest regarding the outcome of your issue. As a seller, an agent working on a commission basis is always working for you. But as a buyer, the commission process works against you, since a higher sale price means more money for both agents.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have close to 10 years of experience handling Real Estate, Personal Injury, Immigration and Commercial Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Yuca Sues over Commercial Lease Dispute

by Isaac Benmergui, Esq on May 22, 2015

Yuca Sues Over Commercial Lease DisputeA court battle over an expired lease, a verbal agreement, and a holdover tenant is waging on Lincoln Road. The case highlights the importance of having every aspect of a commercial lease written down and signed by both parties.

The litigation began when the landlord at Lincoln Road, J. Berens & Sons, decided that property values in the area had increased enough in recent years to make it profitable to sell. Berens & Sons initiated the eviction process on the grounds that Yuca has no lease and as a holdover tenant, owes double the monthly rate, and must vacate when the property sells.

However, Yuca restaurant, an establishment that has been at the location since 1995, said their deal with the landlord includes 5-year extensions every five years, along with a 5 percent increase in the rent. Owners at Yuca contend that although their lease is up, they had an oral agreement with the landlords to continue with the same arrangement.

Yuca says the eviction process was only initiated because the Yuca lease affords them “right of first opportunity,” in the event that the landlord decides to sell. It guarantees the restaurant the right to know that the property is being sold and 20 days to come to an agreement with the landlord before they are able to execute an agreement with a new owner.

This case brings up several important issues with commercial leases. First of all, there’s no such thing as a standard lease. Every lease is different and contains special agreements that are specific to that landlord-tenant relationship. Although a lease may look standard, always have it looked at by a real estate attorney to advise you on any special clauses that you need to be aware of.

Second, the lawsuit alleges that Yuca began $500,000 worth of renovations on the property based on the verbal agreement that they say gave them their 5-year extension on the lease. Even if you have had a relationship with the landlord for many years, such as in this case, never invest in a property on which you do not have a current lease.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have close to 10 years of experience handling Real Estate, Personal Injury, Immigration and Commercial Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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