Illegal Rentals More Common in Miami

by Isaac Benmergui, Esq on February 13, 2018

Illegal Rentals More Common in Miami Outrageous security deposits. Restrictions on A/C use. Parking restrictions. No pets.

These are the kinds of rules tenants who rent unregulated “efficiency” apartments face. These efficiencies are generally a room in or on a landlord’s property that is rented out as part of Miami’s underground economy. Demand for these rentals is driven by two things: a lack of affordable rentals in Miami, both single-family homes and apartments, and the rising cost of home ownership. Because housing prices have risen so fast, homeowners are using existing homes to generate additional income, and renters need cheaper options, so they take advantage of illegal rentals until they can afford something better.

How can you tell if a rental apartment—of any size—is an actual, legal rental space that’s up to code? First, any rental arrangement should involve a lease signed by both parties. Without a lease, you have no legal standing. Second, be suspicious of rentals offered online. Drive by the physical address and look for a rental sign. It’s not uncommon for scammers to steal listings and offer them up for rent when the property may be vacant, in foreclosure, or owned by another party.

Third, the offer to pay utilities for a small, suburban rental space is also a red flag. The reason utilities are paid is because splitting them alerts the utility that there are multiple parties sharing a space. Be aware also that if you’re not paying utilities and you’re paying rent to a private party, that can have an impact on the next time you need to rent a property, because your previous rental is unaccounted for. Without a lease or utilities, you have no proof that you have been paying your bills in a timely fashion. That can impact your credit score, too.

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 over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

{ 0 comments }

Homes Exposed to Sea-Level Rise Selling 7 Percent Lower than Unexposed PropertiesThere’s a dirty little secret in Florida real estate, and that’s that rising sea levels are endangering prime waterfront property. It’s the reason big investors are concentrating their buys further out on high ground, not on the properties with the best views.

Even properties built with hurricanes in mind were no match for Hurricane Irma. Even buildings with special storm features had storm window fail and seams perforated, letting water flood in and stall elevators and ruin units. Condo owners face additional exposure to storm damage, since associations share the bill for damage to the building if insurance doesn’t cover all the repairs needed following a big storm.

Zillow estimates that half a million Miami homes could be underwater by the end of the century—well within the lifetime of today’s school age children. And research by scientists at University of Colorado at Boulder and Penn State show that homes exposed to sea-level rise are taking a 7 percent hit compared to comps that don’t have exposure. “This discount has grown over time,” the authors wrote, “and is driven by sophisticated buyers and communities worried about global warming.”

Insurance companies are worried that current flood maps underestimate risks. Albert Slap, owner of Coastal Risk Consulting, says that the reason home values keep going up despite the risks is that real estate agents have no requirements under law to disclose actual flood risk to buyers. In his view, Slap says the market is being kept afloat by “systemic fraudulent nondisclosure.”

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 over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

{ 0 comments }

Discount Broker Home Bay Comes to Florida

by Isaac Benmergui, Esq on February 9, 2018

Discount Broker Home Bay Comes to Florida Another discount home broker is joining the ranks of RedFin and other discount brokerages in Florida. Home Bay offers to sell your property for a flat $2,500 fee, as opposed to the 3 percent traditional real estate agents charge. On a $395k sale, that would be a commission of nearly $12,000.

Discount brokerages work by charging sellers a flat fee and doing the bare minimum of work required for the sale. They list your home on the MLS, and that’s it. Many times, the broker doesn’t live in your area and may never see your home in person. It will be up to the homeowner to get photos, market your home with other real estate agencies or locally, field calls from interested buyer agents or schedule showings. If you want the listing agent to provide additional services, the fee gets higher depending on how many services you need provided.

This can be a tempting option until you consider that in 2006, analysis showed that sellers who used a Realtor got 24 percent higher sale price on average. One way to figure out the difference for your area today is to take the average sales price of comps that were represented by a brokerage in your area and compare them to comps that were FSBO, or for sale by owner. FSBOs are representative of homes represented by discount brokerages.

Another factor to consider is that today, many real estate agents also facilitate staging and professional photography for your home. Both these items cost you (or the agent) out of pocket but can add significant value to your sale. A 2013 study found that professional photography adds between $3-11k over list price for homes valued between $200k and $1 million. They also sold 21 days faster.

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 over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

{ 0 comments }

Bitcoin Users Could be Subject to Money Laundering Charges

by Isaac Benmergui, Esq on February 8, 2018

Bitcoin Users Could be Subject to Money-Laundering Charges Those using Bitcoin to launder money will now face criminal charges in Florida. The move came last May with the rise in popularity of the virtual currency, which hit $20k per Bitcoin at its high in mid-December. It clarified a Florida law that clarified the meaning of the phrase “monetary instruments” in Florida’s Money Laundering Act.

The law was written after a money-laundering case against a Florida man was thrown out due discrepancies over the language in the law. Bitcoin isn’t regulated by any bank, and the IRS doesn’t count transactions using the currency as anything more than bartering. However, in the real world, individuals can buy everything from condos to cars with Bitcoin.

Some condo developers have publicized their units by offering to accept Bitcoin as payment, and nearly 100 real estate listings on RedFin list Bitcoin as an acceptable form of payment. But as FinCen attempts to crack down on anonymous purchases, is Bitcoin the workaround?

The newly revised geographic targeting order now includes Palm Beach and Miami-Dade counties, as well as the five Burroughs of New York, and counties in California, Texas and Hawaii. Counties that fall within the order have to provide identification for individuals making all-cash or wire transfers of real estate purchases worth over $1 million in most areas. In some areas, purchases worth $500k or more trigger the requirements.

Bitcoin experts say money launderers likely would not choose Bitcoin as a way to clean money because every purchase leaves an indelible trace on a crowd-sourced transaction record called the blockchain.

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 over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

{ 0 comments }

Tax Experts Still Unsure What Tax Law Holds in Store for Miami Real Estate OwnersThe Tax Cuts and Jobs Act was signed into law December 22, but some real estate experts still haven’t been able to get through the hundreds of pages of typed and handwritten tax rules. More importantly, no one is really sure yet how the new tax law will impact real estate in Miami. Here are some tax experts’ best guesses.

Law:  Mortgage interest deductions are going to be limited to $750k, and will apply to second homes. This only applies to new loans, old loans will be grandfathered in.
Effect: This part of the tax law will undoubtedly impact the luxury market, specifically homes $750k to $1 million. What tax experts disagree on is how much influence this segment has on the rest of the real estate market.

Law: Deductions for income, property and sales taxes are now capped at $10k. That amount was previously unlimited.
Effect: This could lead to higher immigration to Florida from high-tax states, like California and New York. One developer who is leading the Brickell Flatiron project says she has already seen the effects of this—web traffic from New York buyers has tripled in the past month. Three penthouses in the building priced $1.5 million and up have already been sold to New York buyers.

Other, more minor issues that tax professionals are paying attention to include how the bill effect estate taxes, if corporations will actually stop holding investments overseas, and what other changes and tweaks will emerge as lawmakers continue to fine-tune the bill and correct problems.

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 over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

{ 0 comments }