How Top Real Estate Bills Fared in Tallassasee in 2018

Priorities and talking points

1. Reform is needed to stop the abuses that raise homeowner’s insurance rates

• An “Assignment of Benefits” (AOB) occurs when a policyholder agrees with a contractor to authorize the insurer to issue checks directly to the contractor.
• Unfortunately, there is significant abuse of this process occurring in many water and roofing claims.
• This abuse leads to higher insurance rates for everyone.
• We support legislation that would reform the assignment of benefits process to help stop this fraud and abuse.  

       Outcomes from the session:

• Although AOB reform did not happen this year, the momentum is building for a successful outcome to this escalating problem. AOB reform remains a serious issue for Florida's property owners. The business community and the Legislature will continue to work to find the right path forward.

2. Continue to reduce the business rent sales tax

• Florida Realtors is thankful for the support of the 2017 Florida legislature, which passed the first ever rate cut to the Business Rent Tax.  Effective January 1, 2018, the state sales tax rate will be reduced to 5.8 percent on businesses that rent commercial space.
• However, we remain the only state in the nation to levy this tax.
• If we can continue to lower this tax in the future, it would give businesses extra money to expand, hire more employees, improve benefits, and raise salaries.

       Outcomes from the session:

• Additional reduction in the Business Rent Tax
  HB 7087 included a cut to the Business Rent Tax, saving businesses throughout Florida an additional $31 million each year. Effective Jan. 1, 2019, businesses will pay a 5.7 percent state tax rate on their commercial leases will be 5.7 percent.
• Tax credits for businesses that pay the Business Rent Tax
  HB 7055 includes a measure allowing businesses to receive tax credits for a portion of the Business Rent Tax they pay, effective July 1, 2018.

3. Increase funding for the housing trust funds

• The State and Local Government Housing Trust Funds were created to help families achieve the dream of homeownership with down payment assistance.
• They also provide housing rehabilitation and rental assistance to Florida’s homeless, veterans, seniors and people with disabilities.
• As the economy continues to strengthen and home values rise, the need for housing assistance will increase as well. 

Significant outcomes on other issues of interest to Realtors and real estate

• More than $400 million for Florida's natural resources — The legislature allocated significant funding to Everglades restoration, beach renourishment and springs protection, and repairs to the Herbert Hoover Dike around the southern boundary of Lake Okeechobee. Effective: July 1, 2018.
• Nearly $110 million for affordable housing projects — State and local government housing trust funds awarded almost $110 million to affordable housing programs. These funds help Floridians achieve the dream of homeownership with down payment assistance and provide rental assistance and housing rehabilitation to Florida's homeless population, veterans and persons with disabilities.
• Strengthening flood insurance notices to protect homeowners — Many property owners forgo flood insurance because they mistakenly believe their standard homeowner policies include flood damage coverage. HB 1011 strengthens the current flood insurance notice included in their property insurance policy. Insurers must include the notice in the initial policy and when the policy is renewed. Effective: Jan. 1, 2019.
• Creating an accurate 3D map of Florida — Included in the state budget is $15 million to fund light detection and ranging (LIDAR) mapping that would produce a complete and accurate 3D map of Florida for use in emergency management, infrastructure planning and other purposes. LIDAR is a next-generation mapping technique and has the potential to lower flood insurance rates throughout Florida.
• Preventing unlicensed real estate activity — The Legislature allocated up to $500,000 from the Professional Regulation Trust Fund to the Department of Business and Professional Regulation to combat unlicensed real estate activity.
• Key appointments/reappointments to real estate boards/commissions — The Florida Senate officially confirmed several Realtors and a former Florida Realtors staff member to the Florida Real Estate Appraisal Board (FREAB) and the Florida Real Estate Commission (FREC). Armando del Valle was confirmed to serve on FREAB, and Dick Fryer, Guy Sanchez and Randy Schwartz, former Florida Realtors General Counsel, were confirmed to serve on FREC. 
• Creation and increase of state taxes and fees — House Joint Resolution 7001, which will appear on the November 2018 ballot, raises the bar on legislative support required for state tax or fee increases. Specifically, it requires a two-thirds majority vote of both chambers to approve a tax increase. It also requires that proposed changes to taxes or fees be part of a separate bill that contains no other subjects. If voters approve the amendment, it will take effect in 2019.
• Regulating mortgage lenders — Currently, lenders that make residential mortgage loans for personal, family or household purposes are regulated by the Florida Office of Financial Regulation (OFR). HB 935 extends this licensure requirement to lenders making residential mortgage loans for business purposes. These loans are most often offered to purchasers who are renovating or remodeling a home for resale. Effective: Jan. 1, 2019.
• Allowing apartment doorstep garbage pickup to continue — Apartment renters with doorstep waste collection services continue to be hamstrung by broad-ranging fire code restrictions. HB 529 resolves this issue in a safe manner by providing limitations on the placement of waste containers in hallways until Florida's Fire Prevention Code is revised. Effective: July 1, 2018.

Issues up for consideration in 2019 and beyond

• Vacation rentals is another issue that will be addressed in subsequent legislative sessions. This session, an incredible amount of discussion occurred among stakeholders on the issue, and several bills made it very close to passage. The progress made this year will provide a good starting place for continued discussions during the 2019 legislative session.
• A new issue brought up at the Florida Realtors Board of Directors meeting in January 2018 concerned open and expired permits. These permits often interfere with the closing of real estate transactions. Florida Realtors will be working with stakeholders to push for a bill that will help solve the problem in 2019.
• The issue of remote notaries will resurface next session. The goal is to allow documents to be notarized even when the notary and the person signing the documents are not physically in the same room.