How much money and what’s the money for?  Bank of America is promising to put down anywhere from $2,500 to $30,000 as cash on the barrel-head to help the seller in the short sale to relocate.  The pilot program began here in Florida, now it goes nationwide.

Short sales are very, very good alternatives to the foreclosure process here in Florida, as we have been discussing here for awhile now.  Problem was in the past that lenders weren’t that cooperative or that fast in helping short sales succeed for distressed homeowners trying to get out from under their mortgage.  Lenders took their time okaying the short sale terms, if they ever did.  Antsy buyers sometimes walked away.  Wary buyers just avoided the short sale properties in the first place, knowing the reputation they had for taking months and months to get finalized and the complications of having the lending institution involved.

So, it’s big news to have Bank of America actively encouraging – even helping – the success of short sales of residential home properties here in Florida and elsewhere in the country.

Details of the New Bank of America Short Sale Program

To qualify for the new program, short sale offers on homes with mortgages owned and serviced by Bank of America itself have to be submitted to BofA between now and September 26, 2013, and the bank needs to okay the sales price before the short sale is put out there in the marketplace.  If the bank hasn’t okayed the sale price before you’ve got an offer on the table, then you’ve got a problem with qualifying for this new program.

How much will you get in this new program for relocation expense after you’ve been qualified?  BofA doesn’t have a set schedule; instead, it’s going to be decided on a “case by case” basis.  (Translation: get ready to negotiate that number).

Read the May 2012 press release from Bank of America with all the details online here.

Larry Tolchinsky’s Tip:

Last year, Bank of America tested the waters here in Florida with a similar plan that was offered for around sixty days last Fall.  From that approximately sixty-day period, it’s reported that 11,000 Floridians with Bank of America mortgages agreed to short sales by August 2012 but only 847 of those houses have actually sold.  From those 847 deals, it’s reported that BofA paid an average of $12,000 in relocation expense.

If this sounds like the Home Affordable Foreclosure Alternatives (HAFA) program offered by the federal government, it should.  HAFA also offers relocation cash, just not as much (estimated offer is around $3000 under HAFA).   BofA is offering a similar deal to its own distressed homeowners who may otherwise end up as defendants in foreclosure actions filed by BofA – which is the incentive for the lender to go ahead and make these kind of cash incentive offers.

What about the deficiency?

However, it would be prudent for Florida homeowners with Bank of America mortgages to move carefully.  The “case by case” basis in determining the amount of relocation expense that will be available to them is an issue to be considered: what are the criteria here, and is there wiggle-room in negotiations?

Another big question (and this is a BIG question): what about the deficiency judgment?

It’s nice that the lender is offering to help with relocation costs, but one has to wonder about their plans to deal with the deficiency that will result from the short sale.  It’s not much of a bargain to get relocation expenses now, and then have to pay thousands in a deficiency judgment for years down the road.

Which boils down to a recurring theme here:  now is not the time to negotiate anything with a sophisticated lender (or anyone else) when the transaction involves Florida real estate.  Things are just in too much of a mess.  With these short sale programs, there is the nuance that the homeowner can work with the friendly bank to get things done, the stressful situation resolved, and everyone moving on down the road.

That’s not the reality of today’s Florida real estate market.  This relocation expense offer is nice, but it’s just part of a negotiation that needs to take place with experienced legal advocates at the table.  Maybe that’s why the numbers are not higher in the Florida pilot program – when it got down to brass tacks, this wasn’t such a bargain?

For more on short sales, check out:

1. 10 Things to Know About Mortgage Debt Collectors and Florida Short Sales, Florida Foreclosures, and Florida Home Loan Modifications
2. Five Things To Know About The Income Tax Break For Short Sales, Foreclosures, and Loan Modifications That Ends December 2012
3. The Short Sale Transaction in Florida: Things That the Seller (and Buyer) Need to Know Before Closing the Short Sale of a Florida Home – Clouds on Title

For more on deficiency judgments, read:

1. Future of Florida Deficiency Judgments on Florida Home Mortgages – Will New Laws Limit or End Bank’s Ability to Sue for Unpaid Mortgage Balance?
2. Florida Deficiency Lawsuits Against Florida Homeowners Who Walked Away From Their Mortgages: Are You About to be Sued for the Deficiency Balance Left on Your Florida Mortgage? (Answer Likely is Yes)

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

What is forced-placed insurance?

Forced-placed insurance is an insurance policy put in place to cover a home or condo by the mortgage lender or mortgage servicer when the mortgage payments fall behind schedule.  They argue that this is necessary to protect their collateral, i.e., the home, from harm (fire, flood, whatever).  That’s fair enough, someone needs to make sure that the property is protected by insurance – and the bank does have an interest in protecting the home with insurance if the homeowner’s own insurance policy isn’t available any longer.

Here’s the thing:  they may take out the policy, but they look to the home owner who is behind on the mortgage payment to cover the cost of this new home insurance policy and the home owner’s not a part of the negotiations.

Surprising to almost no one in this current Foreclosure Fraud mess, these new forced-placed insurance policies are much more expensive than the standard homeowners’ insurance policy. These policy premiums are shockingly high, especially when compared to the same coverage offered under the standard homeowner’s coverage.  They can be enough to force the homeowner into foreclosure.

Of course, banks and servicers point to the language of the mortgage and note paperwork the home owner signed long ago, in better times: that mortgage documentation usually had a tidy little provision within it that stated the borrower agreed that the lender could go get a force-placed insurance policy in some situations.  Falling behind on the mortgage payments?  Yes, that is usually listed in those handy contract provisions.

Banks and Insurance Companies in Cahoots.

Given the current Foreclosure Fraud greed stories, it shouldn’t be a big surprise to anyone that there are ties between the mortgage loan servicers and lenders and the insurance companies.  Sometimes, one owns the other one.  Sometimes, they get nice financial incentives to do the deal (which some are blatantly labeling as “kickbacks“).

Larry Tolchinsky’s Tip:

Right now, forced-place insurance is just getting attention from various state and federal powers that be, and steps are being taken to do something about this latest version of greedy, bad acts by banks in Florida and elsewhere.  However, forced-place insurance or lender-placed insurance has not been stopped: it’s still happening to people everyday.

In fact, once again, don’t expect state or federal agencies to fix this problem.  There was talk that the Consumer Financial Protection Agency would take care of the greedy forced-place insurance policies being purchased with distressed homeowner’s money all over the place.

Nope.  The CFPA, created by the Dodd-Frank federal laws, regulates new financial services.  However, hopes that the CFPA would solve the problem recently died; to learn more about what they did and didn’t do, check out this May 2012 article in the Huffington Post.

If you are behind in your mortgage payments, then first things first — don’t go it alone in this legal mess of ForeclosureFraud antics, get an experienced Florida real estate attorney on your side to help you through the legal jungle that exists today.

Additionally, consider this:  if you get a notice that your standard homeowner’s insurance coverage is being cancelled or expiring, then be proactive and get yourself another policy.  Do this, and you out maneuver the bank or mortgage servicer just waiting to issue that evil, expensive force-placed policy on your home.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

Read our earlier post giving details on the Senate version of the legislation here; the House version, HB1013, is the one that was signed into law by Governor Scott on April 27, 2012.  The new law is effective July 1, 2012, and will apply to all warranty issues: those that come before and after the effective date of this new legislation.

This new law was written and passed after a Florida appellate court (the 5th District Court of Appeals) ruled in 2010 that Florida home builders and real estate developers might have to bear the financial responsibility for things like bad sewers, screwed up roads, warping sidewalks, etc. in the neighborhoods and condo projects that they built.

That case is available online in case you’d like to read it:  Lakeview Reserve HomeOwners v. Maronda Homes, Inc. From that opinion:

The Developer developed a residential subdivision in Orange County, Florida, and incorporated the Association to serve as the homeowners association of that subdivision. In developing the subdivision, the Developer performed certain site work, including construction of the stormwater drainage system and private roadways. During construction of the subdivision, the Developer retained control of and managed the subdivision. Ultimately, the Developer transferred all control of the subdivision to the individual lot owners and the Association.

The Association filed a complaint against the Developer for breach of the implied warranties of fitness and merchantability based on latent defects in the subdivision’s common areas. Specifically, it claimed that the roadways, retention ponds, underground pipes, and drainage systems throughout the subdivision were defectively constructed. The Developer filed a motion for summary judgment, arguing that the common law implied warranties of fitness and merchantability do not extend to the construction and design of private roadways, drainage systems, retention ponds and underground pipes, or any other common areas in a subdivision, because these structures do not immediately support the residences. The trial court agreed and entered summary judgment against the Association….

[We] hold that there is a common law warranty of habitability applicable in the case at bar…..

A review of the history of the application of implied warranties for habitability is instructive. For centuries, caveat emptor, “let the buyer beware,” was generally the rule of law. This served well at a time when parties were thought to usually be on equal footing and neither had a significant advantage in discerning potential defects to goods sold in the marketplace. This theory was particularly persistent in land sales, where a buyer could, and wisely should, inspect the land to ensure it was suitable for the buyer’s intended use. The notion of caveat emptor initially carried over into the construction and sale of homes and commercial buildings. Buyers could still inspect the land, and early building construction and land development was relatively simple….

Larry Tolchinsky’s Tip:

With this new law, that court opinion has no power any longer.  Which is great news if you are a Florida real estate developer.  It’s not good news if you are a condo owner, a Florida home owner, or a Florida HOA or Condo Board.  Why?

Florida Condo Associations and HOAs are severely cash-strapped.  All the Foreclosure Fraud hijinks has resulted in lots of folk not paying their dues and fees, and there’s not much in the association finances to cover things like sewage problems.

Which means that we’re going to see even less repairs and maybe, some people getting hurt because things didn’t get fixed due to lack of money.  No matter that the ones responsible for the cause of these harms — faulty design, flawed building — are doing business still.

This new law gives them a Free Pass on legal liability from poor and substandard workmanship in the common areas of communities and condo projects.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

What’s happening?  Mr. Roman Pino, a drywall hanger, is suing the Bank of New York – he’s already gone through a Florida trial court and the 4th District Court of Appeals.

Mr. Pino also settled his case – but last December, the Florida Supreme Court announced that it would be considering the legal question involved in his foreclosure case, and next week the attorneys for both sides will stand before the Justices and make their presentations and take questions from the bench starting at  9:00 AM on Thursday, May 10, 2012. (After that, the Court will issue an opinion but that will be months from now.)

You can read the Florida Supreme Court’s opinion where it explained how and why it was keeping the case even though the parties had settled the underlying dispute here. From that opinion, the High Court provides:

At issue in this case is whether the plaintiff in a mortgage foreclosure action (here, BNY Mellon) may be subject to sanctions for filing what is alleged to be a fraudulent assignment of mortgage where the plaintiff filed a notice of voluntary dismissal before the trial court had the opportunity to rule on the motion for sanctions. As reflected above, the Fourth District certified this issue to be one of great public importance, and in doing so, noted that “many, many mortgage foreclosures appear tainted with suspect documents” and that Pino’s requested remedy, if imposed, “may dramatically affect the mortgage foreclosure crisis in this State.” Pino, 57 So. 3d at 954-55. The issue also has broader implications and presents questions outside of the mortgage-foreclosure context. Moreover, Pino, the petitioner to the instant review proceeding, has already filed his initial brief on the merits in this Court.

What is this big legal question that the Florida Supreme Court wants to consider and decide?  It’ is something key to justice in all this Foreclosure Fraud.

Here is the big question:  can a bank in Florida file a lawsuit with fraudulent documents down at a Florida courthouse and then go back and file a voluntary dismissal of that lawsuit and by proactively dismissing its own case, dodge the bullet of getting sanctioned for filing fraudulent documents in the first place?

For lawyers, it’s more than this:  from a legal perspective, the question is whether or not a Florida trial court has the jurisdictional power to overturn a voluntary dismissal filed by the bank when a motion to overturn is presented to the trial court that includes an allegation that the dismissed case involved fraudulent filings and therefore, was a fraud on the court.

Can the Florida trial court dismiss the dismissal to stop a party from procedurally evading punishment for a fraud on the court?  We’ll know soon enough.

Larry Tolchinsky’s Tip:

It’s true that Mr. Pino and the Bank settled his case – but he had them boxed in a corner.  After he was sued for mortgage foreclosure by BNY Mellon, he moved for the big bank to be sanctioned (which can mean not only throwing the case out, but forcing the party to pay money) because Mr. Pino asserted that the filed paperwork supporting the foreclosure lawsuit contained a fraudulent assignment of the mortgage.

Robosigning, apparently.  And we all know that there’s lots and lots and lots of robosigned documents being filed in Florida courts all over this state.  What was the bad paper in Mr. Pino’s case?  From the 4th court of appeals opinion:

BNY Mellon commenced an action to foreclose a mortgage against the defendant. The mortgage attached to the complaint specified another entity, Silver State Financial Systems, as lender and still another, Mortgage Electronic Registration Systems, as mortgagee. The complaint alleged that BNY Mellon owned and held the note and mortgage by assignment, but failed to attach a copy of any document of assignment. At the same time, it alleged the original promissory note itself had been “lost, destroyed or stolen.” The complaint was silent as to whether the note had ever been negotiated and transferred to BNY Mellon in the manner provided by law.

So, now there’s a sanctions motion setting on the court’s calendar.  Big bank responds by settling fast with Mr. Pino and filing a voluntary dismissal of the foreclosure lawsuit.  That’s pretty much standard procedure: you dismiss the lawsuit on the record after you settle the case.

However, Mr. Pino wasn’t done.  He filed a motion pursuant to Rule 1.540(b) of the Florida Rules of Civil Procedure, asking the trial court to vacate that voluntary dismissal and he also filed a motion for sanctions against the Big Bank for filing that fraudulent assignment in the first place.

Here’s an important point: the sanctions motion was filed before the notice to voluntary dismiss the case.  So, the bank knew that Mr. Pino was asking the court to sanction the bank before the bank dismissed its foreclosure action.  That’s a big deal.

Another big deal:  MERS is involved.  As we discussed earlier, MERS (Mortgage Electronic Registration System) is being investigated by various states (e.g., the Massachusetts Attorney General) as well as journalists for its contribution to the Foreclosure Fraud crisis.  From our earlier post:

MERS … was set up by banks to streamline their ability to foreclose on homes throughout Florida and elsewhere. Problem was, MERS apparently didn’t bother to follow the public record standards established under the state law. They didn’t file their documents in the land records, among other things.

And the wrong was pretty blatant.  After Mr. Pino first argued that there was no assignment of the mortgage in the bank’s foreclosure suit, BNY Mellon amended its pleadings and included an assignment that was dated just before the foreclosure lawsuit had been filed in the first place and without any evidence that the assignment had ever been recorded in the public records.

It was then that Mr. Pino moved for the court to sanction the Big Bank, arguing that this smelled to high heaven (legal jargon, it was false) and (get this) in support of his request, Mr. Pino pointed out that the person shown on this newly filed, non-recorded assignment as signing it (executing it) was and employee of the mortgagee’s lawyer — and that if you looked closely, you would find that the date on the notary stamp showing the commission date revealed that the assignment never could have been legitimately notarized on the date that is shown on the assignment.

Wow.

Then, to add even more pressure, Mr. Pino set some depositions (where sworn testimony is taken in front of a court reporter) – he would be deposing not only the notary and the lawyer’s employee who signed the document, but also the people named as witnesses on the assignment.

No wonder the bank scurried down to dismiss that lawsuit and settled that foreclosure case with Mr. Pino.  Right?

So now, we’re all watching to see what the Florida Supreme Court is going to do about this mess.  The record is giving the High Court a prime example of what Florida foreclosure defense attorneys see all the time – big banks doing bad things.  Very bad, obviously bad, fraudulent things.

What happens to the evildoers?  We’ll know soon enough.  But one thing we know right now — just like we’ve been saying, that big settlement with all the Attorneys General which has had so much media coverage doesn’t mean much to the Average Joe.  It’s individual fights like this one, hard fought by Mr. Pino, that will bring justice to the Florida homeowner victimized by Foreclosure Fraud.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

What’s the Florida Hardest Hit Fund?

Go here for our earlier post that gives all the details.

Of course, the okay by the Board of Directors for the Florida Housing Finance Corporation is not enough: the federal government has to give its approval, as well – and this is expected to come from the Treasury Department sometime this month.  Looks like Florida homeowners fighting foreclosure to stay in their homes may soon have more time and money available via the Hardest Hit Fund as soon as late June 2012.

No need to wait for details on how the FHFC has changed the Florida Hardest-Hit Fund (HHF) Program; unless the Treasury suits revise the terms that the Florida Housing board submitted, things should change as follows (though the public notice with final changes will not be released until the federal stamp of approval is given) according to the FHFC Board Notice:

First, the money assistance for those out of work or cash-strapped is to be offered in two ways:

• an unemployment mortgage assistance program, where HHF pays the monthly mortgage payment; or
• a mortgage catch-up, where HHF pays the past-due mortgage payments in an HHF loan reinstatement payment program.

Second, the amount of money available for mortgage payments has increased:

• now, HHF fund can provide monthly mortgage payments can be paid up to one full year at a total of $24,000 (before, it was over after 6 months with a cap of $12,000);
• HHF will provide money to bring a mortgage current up to a total of $18,000 (three times more than the old total of $6000);
• HHF will pay up to $25,000 to homeowners applying to have their past due mortgage payments;

Third, time limits have changed:

• HHF no longer has a deadline to determine which mortgages are eligible for the HHF program – which makes the Hardest Hit Fund available to more Florida home owners than other the old requirement of mortgages issued before Jan. 1, 2009.
• Before, HHF was limited to mortgages that were less than 6 months behind; now, how many months a mortgage is past due isn’t a factor (but two requirements here remain: you cannot be in foreclosure and the mortgage servicer has to agree to the HHF participation).

Larry Tolchinsky’s Tip:

Florida homeowners need help as fast as they can get it: no one knows this better than a Florida foreclosure defense lawyer.  Attorneys defending Florida homeowners against the threat of Florida foreclosure actions are also very well aware that the Hardest Hit Fund has been around for a year now, and it’s hasn’t helped many people at all.

It makes sense that the Hardest Hit Fund has been revamped because it had to be.  As it was and by all accounts, it was a failure. Consider this: it’s reported that one year later,  over 90% of the $1 Billion of the federal TARP monies used to fund the Hardest Hit Fund is still sitting there.

Ninety Percent.

This new version of the Hardest Hit Fund is designed to help more Florida home owners avoid foreclosure.  Let’s hope that it is much more successful than its predecessor… of course, that won’t take much, will it?

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

You and I have until May 14, 2012, to send Pam Bondi our ideas on how around $300,000,000 should be used.

This isn’t all that the State of Florida got from these five lenders (read our earlier post here that gives details on these banks’ bad acts, including full text reports of the government investigation findings).   Florida got $8.4 billion as a total settlement, but most of that money has already been divided up to pay for things like home loan mortgage modifications and reductions to mortgage principle balances.

Bondi is asking for public input on how to spend a part of the settlement proceeds that weren’t allocated to specific uses as part of the deal, other than to provide for “consumer relief.”

Larry Tolchinsky’s Tip:

It’s nice that Pam Bondi is asking all of us to voice our opinions about how that money should be spent, and hopefully each and every opinion will be read and considered.  However, to think that this big settlement is the end of the ForeclosureFraud mess is wrong, and reading these big settlement amounts as a suggestion that we’re all done but for the clean up isn’t accurate.

For one thing, this settlement is just concerning these five mortgage lenders.  That’s all. There’s a lot more financial institutions involved in this Wild West mess than these banks.

Consider the news story in last week’s Sun Sentinel about the complications in determining who owns what title.  In an article entitled, “Who owns that dirty, foreclosed house? It’s complicated,” investigative reporter Megan O’Matz reports that authorities are having big problems determining who is responsible for paying the upkeep on abandoned properties because the real estate titles are in chaos.

Seems that Code Compliance in various Florida areas are having a big problem finding who is the legal owner of abandoned properties in order to force them to do things like clean the place up and remove the neighborhood eyesores and community environment dangers.  Why?  It’s a spaghetti bowl of names to sort through – mortgage lenders, servicers, trustees, etc. – on each tract of land and apparently, a lot of finger pointing among the financial institutions that they’re not responsible for paying the upkeep expenses.

Surprise, right?

Add to this other issues we’ve already been monitoring: other banks and credit unions have been foreclosing and going after deficiency judgments steadily over the past few years; appraisal fraud and evildoing appraisers have monkeyed with real estate values; title companies treading carefully in issuing new title policies; and the inability of anyone to find a solution to the huge backlog in foreclosure dockets in Florida (it’s around two and a half years now), and it’s easy to understand that Florida still has a huge mess to fix.

Which means that individual Floridians need to be very careful in all their real estate dealings.  Now is not the time to make decisions without the advice and guidance of an experienced Florida real estate attorney.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

Below, the complete news release from Florida AG Pam Bondi:

Attorney General Pam Bondi News Release

April 30, 2012\Media Contact: Jenn Meale\Phone: (850) 245-0150

Attorney General Pam Bondi Seeks Public Input on Distribution of $300 Million in Settlement Funds for Housing-Related Programs

TALLAHASSEE, Fla.—Attorney General Pam Bondi invites the public to make suggestions on how best to distribute approximately $300 million recovered on behalf of Florida’s consumers in the national mortgage servicing settlement. From Monday, April 30, through Monday, May 14, at 5 p.m., the public can submit suggestions to the Attorney General’s Office by visiting MyFloridaLegal.com.

“Florida is one of the hardest hit states in the country in terms of foreclosures, and I’d like to hear from Floridians about ways we can help homeowners and offset the devastation caused by the foreclosure crisis,” stated Attorney General Pam Bondi.

In the next several weeks, Attorney General Bondi will be evaluating input from the public, interested stakeholders, and representatives of the Governor’s Office and the Legislature before distributing settlement funds.

In February 2012, Attorney General Pam Bondi entered a $25 billion joint federal-state agreement with the nation’s five largest mortgage servicers over foreclosure abuses and unacceptable nationwide mortgage servicing practices. The court-approved settlement calls for the Attorney General to direct approximately $300 million in consumer relief for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, and to enhance law enforcement efforts against financial fraud.

The settlement agreement lists permissible uses of the settlement funds, including: housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, and training and staffing of financial fraud or consumer protection enforcement efforts. More information regarding the uses of these settlement funds can be found under “Exhibit B” of the final settlement agreement. Mortgage Settlement Link

###

Which means news stories this week about the national housing market and the Florida housing market are getting lots of attention.  Read Bloomberg and you’ll find a report entitled, “Sales of New U.S. Homes Exceeded Estimates in March,” where real estate experts like a senior economist at Moody’s Analytics give predictions that the residential housing prices are going to start going back up as soon as 2013.

Go over to the Palm Beach Post where Kimberly Miller has an article entitled, “South Florida housing prices have hit bottom, Zillow analysts declare” and it gets better.  There, she reports that some experts have even more exciting opinions for Florida.  According to Zillow’s latest report, Palm Beach County, Broward County, and Miami-Dade County have already turned the corner, with residential prices hitting a turning point in 2011 – and when Miller checked with an economist at Florida International University, he opined that Florida real estate will hit its bounce-back this Fall – and that prices just can’t get any lower.

So, is the future getting bright again?  Maybe so, maybe not.  The Wall Street Journal notes that a lot of factors are in play in this economy and this includes a lot of foreclosures still in limbo.  And over at Reuters, Yale economics professor and co-creator of the Case-Shilling Index Robert Shiller does not yet see reason for all this hoopla: he’s still thinking that we may not have a big change in housing prices for years and years to come.

Larry Tolchinsky’s Tip:

Last week in Orlando there was a public forum hosted at Rollins College by the Bipartisan Policy Center Housing Commission where lots of different people with all sorts of expertise could discuss Florida’s economic situation and especially the Florida housing market.   This group included some very big bigwigs and the talk involved not just the local Florida real estate economy but the real estate markets of other states and regions in the United States and those in other parts of the world.

And from all that brainpower, there was the big reality that the Florida housing market does not operate in a vacuum.  Even if we could all ignore the bottleneck of foreclosures pending in Florida courts, and no solution yet on what to do with the huge shadow inventory of houses held by Florida banks and mortgage servicers – there’s still the concerns about our overall economic growth and especially the employment situation.

As a professor at the University of Central Florida pointed out to the forum, housing is tied to employment and no one can accurately predict when the Florida housing market will be stabilized and moving ahead until they take into consideration of factors of the Florida labor market.

So, once again we point out that we’re living in unusual times right now and it’s important for Florida home owners and those interested in Florida real estate investment to tread carefully in their real estate decisions.  Because of all of the uncertainty out there, no one should read something in the newspaper or hear something on the television or find something on the internet and jump into any long-term decision.

It’s extremely important in Florida real estate matters, whether you are buying or selling, deciding whether to face foreclosure or to short sale your home, that you discuss your particular situation with an experienced Florida real estate attorney.  There’s just to many legal issues involved in Florida real estate right now, and things are not going to be returning to any sort of “normalcy” from a legal perspective for a long, long time.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

What is a wild deed?

A “wild deed” is a phoney, fake document filed in the public records and used by the evildoer to cloud title to real estate as he or she claims a legal right in property belonging to someone else (usually as part of the closing procedure in a sales transaction).

It’s not the job of the County Clerk to judge documents: their job is to insure that documents are properly filed and that land records are kept safe.  Making legal decisions on what documents are okay and what documents are not valid – that’s the job of a judge and jury.  Meet the requirements (properly signed, etc.) and pay the fee, and you can file the document even if the clerk is extremely suspicious that you are up to no good.

So, wild deeds DO get filed in the real estate records.  Florida law does not prevent this.

The Case of Evildoing Jacob Franz:Dyck – Famous Florida Wild Deed Con Artist

Why do evildoers do this?  For money.  Consider the notorious case of  “Jacob Franz: Dyck.“  (We’ve put the name in quotations to clarify that this is how this guy signs his name — with a colon between the last two parts of his full name.)

Jacob Franz: Dyck has spent some time behind bars in the past, and he’s also made a living as a dentist here in Florida.  This rogue dentist has also made a name for himself in real estate circles for his scheme of  researching Florida real estate facing foreclosure actions and going down to the courthouse and filing bad paper (“wild deeds”) in the land records - fake deeds that purported to give him an interest in the home or land tract.

Result? To get Dyck to go away, someone had to pay him some sort of nuisance fee.  Reports are he was collecting around $2500/transaction.  Not bad, if he did two or more a month, right?  He’s said to have filed over 100 wild deeds in Osceola County alone.

Larry Tolchinsky’s Tip:

Wild deeds, sometimes known as “stray deeds” or “interloping deeds” (terms used in Florida case law precedent), are not the result of the recent Foreclosure Fraud mess – the idea of muddying the waters of real estate title to get some fast cash has been tried long before all the robosigning, missing loan documentation, and other recent Foreclosure antics hit our state.

Still, the reality remains that filing a document in the real estate property records for a particular tract of land means that someone has to check out the claim that is made via that paperwork.  Until the matter is resolved, there is a cloud on the title.

Sometimes the wild deed or stray deed or interloping deed isn’t the result of wrongdoing.  Sometimes, it’s just a mistake.  A typographical error in the document, particularly the legal description of the property.  Maybe it’s a claim to the land that isn’t valid any longer because the debt has been paid.

Whatever the reason, the chain of title must be cleaned of this problem before the owner can move forward with clear title.  How is this done?

If there is a simple mistake, then a corrective deed can be issued by the Wild Deed’s grantee.  What if an evildoer is involved?  Then the wild deed matter may need a Florida Quiet Title Action, a lawsuit filed in the local court which results in a judgment, signed by the judge, that resolves the title question.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

Floridians living in these types of communities are given state government assistance through things like education, developer disclosure regulation, and help in resolving disputes by mandating pre-lawsuit procedures of mediation and arbitration.   Specifically, the Division has the power and duty to enforce the following Florida Laws:

• The Condominium Act, Chapter 718, F.S.
• The Cooperative Act, Chapter 719, F.S.
• The Florida Mobile Home Act, Chapter 723, F.S.
• The Florida Vacation Plan and Timesharing Act, Chapter 721, F.S.
• The Yacht and Ship Brokers Act, Chapter 326, F.S.
• Homeowners’ Associations, Chapter 720, F.S. (jurisdiction limited to arbitration of election and recall disputes)

For example, the Division provides online information regarding how community associations and condominium boards work, providing information like the following:

41. As a unit owner, why are my rights restricted as to the use of my individual unit and the common elements?

Restrictions on the use of both the individual unit and the common elements help to preserve the best interest of all unit owners. Your association documents should detail any restrictions such as types of window coverings, pets, rentals, parking and the number of unit occupants.

Condominium: Section 718.112(3)(b), F.S. / Cooperative: Section 719.106(2)(b), F.S.

Florida Statutes Control Alternative Dispute Resolution of Conflicts Between Condo Owners and the Condo Board

The Florida Legislature has passed specific laws that regulate the resolution of controversies between condominium owners and the condo association’s board.  Found in Florida Statutes 720.311 and 718.1255, these laws work to define and detail how all sorts of controversies can be resolved without having to file a formal lawsuit in a Florida court.

From Florida Statute 720.311:

(1) The Legislature finds that alternative dispute resolution has made progress in reducing court dockets and trials and in offering a more efficient, cost-effective option to litigation. The filing of any petition for arbitration or the serving of a demand for presuit mediation as provided for in this section shall toll the applicable statute of limitations. Any recall dispute filed with the department pursuant to s. 720.303(10) shall be conducted by the department in accordance with the provisions of ss. 718.112(2)(j) and 718.1255 and the rules adopted by the division. …

(2)(a) Disputes between an association and a parcel owner regarding use of or changes to the parcel or the common areas and other covenant enforcement disputes, disputes regarding amendments to the association documents, disputes regarding meetings of the board and committees appointed by the board, membership meetings not including election meetings, and access to the official records of the association shall be the subject of a demand for presuit mediation served by an aggrieved party before the dispute is filed in court. Presuit mediation proceedings must be conducted in accordance with the applicable Florida Rules of Civil Procedure, and these proceedings are privileged and confidential to the same extent as court-ordered mediation. Disputes subject to presuit mediation under this section shall not include the collection of any assessment, fine, or other financial obligation, including attorney’s fees and costs, claimed to be due or any action to enforce a prior mediation settlement agreement between the parties….

From Florida Statute 718.1255:

(4) MANDATORY NONBINDING ARBITRATION AND MEDIATION OF DISPUTES.—The Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation shall employ full-time attorneys to act as arbitrators to conduct the arbitration hearings provided by this chapter…. The decision of an arbitrator shall be final; however, a decision shall not be deemed final agency action. Nothing in this provision shall be construed to foreclose parties from proceeding in a trial de novo unless the parties have agreed that the arbitration is binding. If judicial proceedings are initiated, the final decision of the arbitrator shall be admissible in evidence in the trial de novo.

(a) Prior to the institution of court litigation, a party to a dispute shall petition the division for nonbinding arbitration.

Larry Tolchinsky’s Tip:

Condominium controversies – especially those with a selective enforcement defense – can be complicated to resolve and stressful for everyone involved.  Clearly, the sooner that the conflict is resolved, the better for everyone; filing a formal lawsuit should be the last resort for any fight between neighbors.  You all have to live together, right?

Still, things should be fair.  One owner should not get treated differently than another, which is what the selective enforcement defense is all about.

What Florida law provides is all sorts of avenues to fix any unfairness in the application of covenants, rules, and regulations by Condo Boards on condo owners in the least stressful and least expensive means possible: alternative dispute resolution.  The most common form of ADR we’re all aware of:  two people set down at a table and resolve their dispute between the two of them.  This kind of informal settlement of a conflict is the best thing possible for two neighbors and for a condo owner and a condo board.

However, when things escalate – and sometimes that’s necessary – then Florida law offers different ways to find a solution.  Mediation involves a third party mediator who facilitates the negotiations.  As described above, that mediation will hopefully succeed but need not be binding on the parties.

Arbitration is a more formal and more serious form of alternative dispute resolution.  In arbitration, you waive your rights to things like a jury trial and allow the Arbitrator to make the decision on what will happen.   Arbitration can only apply in certain situations.

Whatever the method of resolution — informal settlement, mediation, arbitration, or lawsuit — condo owners fighting against things like selective enforcement should be aware of their legal rights as defined in Florida law and the best way of insuring this is the case is by having an experienced Florida condo lawyer on their side.   There are longstanding precedents in this area of the law that can be helpful – but only if the condo owner is aware of their existence.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655

Simply put, you must live in accordance with the restrictions found in the public records as well as the rules and regulations of the association itself.  If they don’t allow birds, then you cannot have a canary as a pet.  If they don’t allow privacy fencing, then you cannot install a wooden privacy fence.  If they don’t allow exterior paint outside of a specific set of colors, then your dream of a pink house with white shutters cannot become a reality.

Of course, people are people and there are lots of occasions where residents as well as managers and board members all turn the other way to small violations – things that are considered harmless, or more often these days, things that are too minor to spend the association’s scant resources to enforce.

Sometimes, violations are allowed to exist because of other reasons: the violator is the board president’s mother in law; the manager’s best friend has fenced their patio; or the poodle belongs to the owner who is timely making the largest monthly fee payment.  Whatever the reason, it’s commonplace in Florida today to have condo boards and homeowners’ associations failing to enforce all the restrictions, rules, and regulations across the board, 100% of the time.

Selective Enforcement is a valid Florida defense to HOA Actions

Which means that when a condo association or HOA does decide to enforce restrictions, rules,or regulations against one home owner and not against others, then that owner may well have a viable defense to that action, the defense of “selective enforcement.”  This is because selective enforcement is against Florida law.

Florida Statutes Govern Actions of Condo Associations and HOAs

Chapter 720 of the Florida Statutes governs Homeowners’ Associations.  The Florida Legislature has defined an HOA as follows, in Florida Statute 720.301:

“Homeowners’ association” or “association” means a Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. The term “homeowners’ association” does not include a community development district or other similar special taxing district created pursuant to statute.

The Condo Association is not only responsible for assessment revenue and how it is spent, it’s also responsible for maintaining the community’s legal standards.  The HOA does this by actions to enforce covenants and in turn, the individual condo home owner responds by defending against the action by asserting defenses, including the “selective enforcement” defense.

A home owner or condo owner can argue that he or she is the victim of selective enforcement if either:

• 1) there are facts to demonstrate that the Condo Association or Community Association (HOA) has enforced some covenants but not others in an arbitrary and capricious manner; or
• 2) there are facts to demonstrate that the Condo Association (HOA) or Community Association has unfairly and unreasonably chosen to enforce the covenant against this owner but has not done so against another similarly situated owner.

Florida Legislature and Arbitration or Mediation Before Lawsuits Are Filed In Court

Given the unique situation surrounding these controversies — both sides literally sharing a home turf — the Florida Legislature has tried to facilitate resolving them by requiring arbitration for all recall and elections disputes prior to filing a lawsuit.  In arbitration, the losing party may have to pay for all the legal fees and costs of the arbitration process (which run as high as $10,000 in some instances).

Additionally, Florida law encourages the parties to use mediation before filing a formal lawsuit.  Private mediation is an alternative for HOA controversies in the hopes that setting down at a table with a private mediator may help these neighborhood conflicts and Condo Wars get resolved to everyone’s satisfaction before anyone gets named as a party to a lawsuit in the court records.

Florida Courts Decide If There Has Been Selective Enforcement by a Condo Association (HOA)

If the individual home / condo owner and the Association cannot resolve their dispute outside of a lawsuit, then ultimately, the matter will be filed in the local courthouse and a Florida judge (and/or jury) will be the decision-maker on whether or not the home owner has been a victim of selective enforcement by a Condo Board.

For example, in the 2003 case of Prisco v. Forest Villas Condominium Apartments, Inc., 847 So. 2d 1012 (Fla.4th DCA 2003), it took the condo owner taking his legal fight all the way to the Florida appellate court before he was vindicated:  it was selective enforcement of his condo board to try and make him get rid of his dog, when the HOA never enforced the pet restriction in regards to cats.

Larry Tolchinsky’s Tip:

Home owners fighting with HOAs and Condo Boards are always difficult situations — after all, the condo owner is literally in conflict with his neighbors, and the situation can be tense.  Since these issues rarely resolve themselves quickly, the stressful environment can continue for awhile and it’s important to keep emotions in check.

Which is just one reason why having an experience Florida real estate attorney as your advocate is helpful.  “Talk to my lawyer,” is a great response to anyone asking any questions.  It’s also a great thing to say when any retaliation is threatened or occurs.  Condo wars can be volatile!

Another reason to have a Florida attorney is because this area of Florida real estate law springs in large part from an analysis of prior case precedent, and finding arguments in past court opinions that apply and strengthen the selective enforcement defense of a new matter.

This is true regardless of the battlefield.  Having an attorney available to provide legal analysis on the particular circumstances of a controversy and how the case precedent and statutory authority applies to that situation is important, regardless of whether the parties are involved in informal settlement, a private mediation, an arbitration, or a filed lawsuit.

Why?  Future Florida selective enforcement cases will be resolved by Florida courts based upon the directives and guidance given by past courts on what that means exactly, such as:

1.  The Florida Supreme Court in White Egret Condominium, Inc. v. Franklin, 379 So.2d 346, 350 (Fla. 1979), where the highest court in the state held ” … a condominium restriction or limitation … may be enforced if it serves a legitimate purpose and is reasonably applied,”  and

2.  where the Fourth Court of Appeals explained in Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180 (Fla.4th DCA 1975) that  “… the association is not at liberty to adopt arbitrary or capricious rules bearing no relationship to the health, happiness and enjoyment of life of the various unit owners. “

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655