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Fla. Legislative Session Ends with Mixed Bag of News for Real Estate

Property owners will save a reported $2B but tourism and economic development suffer.

By Toby Tobin
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PALM COAST. FL – May 10, 2017 – The Florida legislature has finished the 2017 session with a flurry of notable decisions. From a Realtor’s perspective, there were wins along a broad front but budget cuts to Enterprise Florida and Visit Florida are cause for concern.

Passed

Cap on Estoppel Certificate Fees: Sellers who live in a community governed by a Homeowners Association, a Condominium Association or Co-Op (more common in South Florida), are required to provide an Estoppel Certificate disclosing the status of their dues and assessments account. This information is required to close real estate transactions. The document is provided by the association management company for a fee paid by the seller. SB 398 places a cap on these fees. Effective July 1, 2017

Business Rent Tax Reduction: Florida is the only state that levies a sales tax (6%) on business rents. Chambers of Commerce and Realtors have joined together for years to reduce or eliminate this tax. A reduction to 5.8 percent was passed. While modest, it is a start in the right direction and is projected to save business $60M annually. Effective January 1, 2018

10 Percent Cap on Non-Homestead Property Tax: A 2008 referendum created a 10 percent cap on the annual increase in taxable property values for all non-homestead properties. This referendum sunsets after ten years, ending January 1, 2019. HJR 21 puts the question in front of voters again November 2018, with one difference; the cap will be permanent.

Additional Homestead Tax Exemption: HJR 7105 puts a constitutional amendment on the 2018 ballot that would allow homesteaded property owners to shield an additional $25,000 of the value of their home from non-school property taxes. The exemption will apply to the portion of the value between $100,000 and $125,000. If passed by 60 percent of voters, the added exemption will become effective January 1, 2019.

Local Governments Preempted from Drone Regulation: Aerial photography via drones has become a powerful marketing tool for Realtors. Over 400 local governments will now be prohibited from enacting local ordinances governing drone operations.

Did Not Pass

Restrict Local Regulation of Vacation Rentals: Proposed legislation that would have neutered a 2014 statute that had returned control over short-term vacation rentals to local governments died. The state had preempted rental control from local governments in 2012. The 2012 legislation resulted in many homes, particularly in Ocean Hammock, being rented to large groups, in some cases more than 20 individuals. Some neighboring residents referred to the large rental homes as "mini-hotels." The 2017 bill would have required local ordinances controlling vacation rentals to apply equally to all properties, not singling out vacation rentals. The proposed 2017 bill passed the house but died on the senate floor. The 2014 statute allowing local control of vacation rentals (except for limits on rental frequency or duration) will remain in effect. Flagler County's current ordinance limiting occupancy was adopted after the 2014 legislation. That ordinance is currently undergoing a legal challenge from a vacation rental property owner.

Budget

The new budget dramatically cuts funding to Enterprise Florida (economic development) and Visit Florida (tourism marketing). These cuts underscore the divide separating legislative leaders and Governor Scott. They are not viewed by GoToby.com, Florida Realtors and the Florida Chamber of Commerce as positive moves.

reader comments
Legislature Over Reach
Posted by Ron
May 12, 2017, 8:52 am
In 2011 the legislature passed Senate bill 883 which removed local property zoning. This zoning protected single family neighborhoods from businesses operating near your homes. Before this bill passed local governments where able to prohibit this activity from destroying your rights of peaceful enjoyment of your homes.

How can a local government create a comprehensive plan without local property zoning laws. A single family home that is issued a license as a bed and breakfast are prohibited from operating in these single family neighborhoods. But because our legislature now we can not prevent a vacation rental from operating in our neighborhoods.

A vacation rental is a public lodging establishment just like a hotel, motel and bed and breakfast. They conduct transient activities. They are required to obtain a commercial business insurance policy. They also use a licensing agreement just like a hotel or motel for occupancy. They are not rentals or leases. There is no transfer of property rights to the occupants. So why did the legislature take away our rights and allow this type of transient business in our neighborhoods?

Well in 2014 our Senator Thrasher introduce a bill to right a wrong an repeal the 2011 law. This bill threw thru the Senate. But in the house it was amended. Local governments where still prohibited from using their local zoning laws and where restricted from acting on frequency or duration. This was a concession to the Florida vacation management association by our own Representative Travis Hutson.

Even though both bills died in the Senate and our local governments can still regulate these dwellings thru ordinances. Our counties, cities and towns can not protect our single family communities from these businesses unless they had ordinances in place prior to 2011.

All residents in Florida must stay alert. Because the Florida Vacation Management Association along with their lobbyist Lori Killinger, AIRBNB, Homeaway, Florida Realators Association, National Realators Association who started this problem in the first place believe they have the right to operate right next door to your home and they also believe that their busniesses should not be regulated. Even though every other transient public lodging establishment is inspected for fire/ life safety codes, require sprinkler systems in most cases, have ADA requirements in place, are required to pay an occupancy tax and other lodging taxes in addition to following zoning laws which have been in place for decades.

Our legislature must concede to the fact once a home obtains a business license to operate a transient activity it is no longer a home it is a vacation rental. It should be treated just like any other business. A home license as a bed and breakfast is not considered a home. What makes a vacation rental different?
Reply to BJ Barrow
Posted by Toby
May 10, 2017, 4:12 pm
Using the yellow "Site Search" box at the right side top of this page, enter "Vacation Rental." That search will return several articles I've written about the subject. The articles done in Oct through December of 2014 will give you the background information you are seeking.
Budget Vacation Rentals
Posted by Bj Barrow
May 10, 2017, 4:08 pm
The 2014 statute allowing local control of vacation rentals (except for limits on rental frequency or duration) will remain. What does this mean please advise Toby;

Thank you
BJ Barrow

 
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Don "Toby" Tobin is a licensed real estate professional affiliated with Grand Living Realty. Toby is a member of the Flagler County Association of Realtors®, the Florida Association of Realtors, Enterprise Flagler, Flagler Home Builders Association, and the National Association of Realtors.

GoToby.com proivdes real estate news, commentary, and analysis for Palm Coast and Flagler Country Florida, as well as Realtor® referrals and consultation to buyers, sellers, and developers.