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Thursday, July 28, 2011

Florida real estate gets high marks in Fed’s latest review of the U.S. economy

Florida emerged as something of a stand-out student in the Federal Reserve’s latest report on real estate in the Southeast.

Amid gloomy reports from brokers in the Fed’s Atlanta district, authors of the closely watched economic report card noted Florida was bucking the trend and reporting positive news.
This has been a running theme in the Fed’s monthly Beige Books, with sales of Florida homes outperforming the rest of the South. In tempered language for its July report, the Fed said the Atlanta district’s reports of modest growth in home sales over the prior year came thanks to the Sunshine State.
“Gains continued to be driven largely by reports from Florida brokers. Outside Florida, the majority of contacts reported sales declined,’’ the report stated. “The outlook among Florida brokers was somewhat positive, but elsewhere sales are expected to remain weak.”
Tourism fared the best in the Atlanta district’s write up, with Fed authors calling it “strong.” The report noted high-end retail seemed to be gaining traction, though the retail industry as a whole is less optimistic than a year ago.
In all, the Fed described the Southeast’s economy as basically flat compared to June. That’s a bit worse than the description for the national economy as a whole, which the Fed said continued to grow, but at a more modest pace.

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Miami Herald

Lauderdale Lakes : 36% tax rate increase wins initial OK

About a half-dozen Lauderdale Lakes residents voiced opposition to a proposal to increase the city’s property tax rate by 36 percent.


Lauderdale Lakes commissioners gave tentative approval to raising the tax rate 36 percent and also increased other fees late Tuesday evening.
Commissioner Gloria Lewis cast the only dissenting votes. The city will have two hearings on the proposed tax rate and city budget in September. Because of the size of the increase, a unanimous vote is necessary on the final vote for the tax increase to be approved.
About a half-dozen city residents spoke out against the increase. However, Acting City Manager Jonathan Allen said the increased property tax revenue is needed for the city to emerge from its financial crisis and provide services to residents. The city, whose current budget is short $9 million, has drained its reserves.
Commissioners tentatively set the tax rate at $9.50 for each $1,000 of assessed value — up from $7 last year.
Under the 2011-12 proposed budget, the owner of an average house assessed at $88,000, with a $50,000 exemption, would pay $361 in the city portion of the tax bill — an increase of nearly $95.
The debt service would jump by about $4.
In addition to the tax increase, the fire assessment fee is being increased to $197, about $40 more than last year. The storm-water fee is climbing to $144, an increase of about $90. And the solid-waste collection free will rise to $306, up $7 from last year.

Property Tax Appeal help: www.PTAGflorida.com

Miami Herald:

Tuesday, July 26, 2011

South Florida home prices rise in May

Note: While this is a good sign for the housing market, it does not necessarily mean that we are rebounding.  The market should fluctuate before a slow rebuilding period.

Herald story:
After falling for nine months straight, single-family home prices in South Florida rose in May as the spring buying season boosted values, according to Standard & Poor’s Case-Shiller 20-city housing index released Tuesday.
Home prices in the region including Miami-Dade, Broward and Palm Beach counties rose 1.2 percent between April and May, after falling 0.2 percent to a new recession low in April.

Still, compared to the same month last year, prices were down 5.3 percent, as foreclosures and distressed short sales continued to dominate the market.

Prices are back on the level they were at in the summer of 2003, according to the Case-Shiller index, which tracks repeat sales of existing homes and does not include condo sales.

Nationwide, prices across the top 20 cities rose 1 percent in May but remained 4.5 percent below their year-ago levels.

For Property Tax Appeal help: www.PTAGflorida.com 

Monday, July 25, 2011

CVS challenges way Hillsborough appraised properties

Hillsborough County could lose $2.5 million in property taxes if drug store giant CVS prevails in a lawsuit challenging the county's method of valuing 35 drug stores here.
It is a case that tax lawyers and property appraisers elsewhere in Florida will watch with interest because of the potential for a new legal precedent regarding commercial property assessment. Among the issues likely to be explored is what factors property appraisers should consider when valuing a commercial property.
The lawsuit was filed in 2007, but is now nearing a trial date.
CVS wants assessments on the stores revised for tax years 2005 through 2010. The company claims Property Appraiser Rob Turner over-valued the stores by 10-15 percent. That would translate into $2.5 million in taxes the county could lose if the drug chain wins the case, said Will Shepherd, general counsel for the property appraiser's office.
"It's a big money case," he said.
Besides Turner, other defendants in the case are the state Department of Revenue and the county's Value Adjustment Board. The board hears challenges to county property tax assessments; the revenue department establishes rules of procedure for value adjustment boards.
CVS argues its properties should be assessed, in part, based on what comparable properties are selling for in the same area.
But Shepherd said the company is basing it assessment on what it got for former Eckerd drug stores that CVS acquired in 2004, then sold. The former Eckerd stores brought about half the amount of money it would cost to acquire land and build a new drug store.
Shepherd claims those sales are not a true marker because CVS put a stipulation in the sales contracts that prohibits the stores from being used as drug stores by future owners.
That devalues the properties, Shepherd said, because drug stores are generally built specifically for that purpose on lots larger than is generally needed for other retail stores such as banks, gas stations and auto supply stores.
Therefore, Shepherd said, the sales contract prohibition effectively lowers the value of the property because it won't be used for what it was intended: a drug store.
"They couldn't sell them for that much because they blocked the guy who could pay the most money," Shepherd said. "It's really a case of the highest and best use. You can't block the guy who's likely to pay the most money."
Ben Phipps, attorney for CVS, dismissed Shepherd's argument as "meaningless." Phipps said Walgreen Co., the nation's second largest drug chain after CVS, would probably already have a site nearby and wouldn't be a likely buyer when CVS sells a store it doesn't need.
"What they're saying is, 'You could sell it to Walgreen and Walgreen would pay you more for it,'" Phipps said. "That's not true because Walgreen is already there. Wherever there's a CVS, there's a Walgreen nearby."
Phipps said the county is wrong in trying to value a building and lot based on what type of business is there. He said the state of Florida and most property appraisers value commercial properties as if they were vacant and ready to lease at market rent.
However, among the factors that the state constitution says property appraisers should consider is income from a property and its highest and best use. Shepherd said he will argue that the highest and best uses of the 35 CVS properties are as drug stores.
Phipps said this issue has come up in other states, but he expects the coming trial in Tampa to have more precedential value because experts on both sides will get an opportunity to testify in depth.
"The same issues have been raised before but not at the level and not with the sophistication that they will be in this case," he said.
CVS is asking the court to set aside the assessments, establish new assessments based on what the company believes are legal methods, and refund the difference. The company is also asking the county to pay legal fees. Attorneys for the two sides will hold a preliminary meeting with Circuit Judge Bernard Silver on Aug. 3 to discuss a trial date.
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Tampa Bay Online

Want a new kitchen, DO NOT set it on fire.

 Summary:  Home owners that can not sell their home, are under-water with their mortgage, and even Public Adjusters that want a cut of your insurance claim are setting home kitchens on fire.  It has gotten so bad that South Florida has set up two task-forces to investigate these fires.  People are now being arrested, don't do it. 

Keep in mind, arson is also insurance fraud.  That means, not only will you go to jail, you will also not get any money to redo the kitchen.  you would be in a bigger hole that you started with.

Contact us to see if we can help save you money so you don't think about setting your property on fire.  On the other hand, should a fire or other damage affect your property, we are experts in this field of Property Tax Appeals.  We are also Contractors so we are better situated to fight a property tax assessment on a location with natural or structural defects.  Contact us at www.PTAGflorida.com

A pattern of suspicious kitchen fires — apparently set by homeowners trying to collect insurance money — has led state investigators and insurance companies to work together to uncover the bogus claims.

Two state task forces are now investigating the trend in kitchen fires.

South Florida had nearly half of the state's fraud-related home arson cases investigated by the Florida Division of Insurance Fraud in fiscal year 2010-2011, state records show.

State and private investigators say the problem largely can be blamed on a surge of homeowners setting their kitchens on fire so they can renovate with insurance money. Ultimately, the scheme could mean higher premiums for other policyholders.

"It's scary, because there's a lot of money going out to pay these claims," said Herb Price, who investigates insurance fraud in Florida for the National Insurance Crime Bureau.

Investigators have spotted a pattern: First, a homeowner leaves food cooking on the stove while they rush to the store for a missing ingredient. The oil then supposedly catches fire and a pan falls on the floor and breaks a tile. A public adjuster, who earns a percentage of the claim payout, inflates the estimate for repairs and renovations.

The number of suspicious insurance claims linked to home arson more than doubled in Florida between fiscal years 2007-2011 — from 31 to 74 — according to the Division of Insurance Fraud. Many of those came from South Florida, where 28 cases were reported in fiscal year 2010-11 in Miami-Dade, Palm Beach and Broward counties.

The state set up two task forces in South Florida to investigate suspicious kitchen fires, and their work has resulted in the arrests of several public adjusters and Miami homeowners.

More cases are under investigation in Broward and other parts of the state, said Price, of the National Insurance Crime Bureau.

"It first looked like it was a small ring of people in Miami. Now it's spread to a lot of people," said Price. "They think it's a good way to fund a new kitchen renovation."

Investigators with State Farm Insurance in Florida are spending a lot of time and money looking into the suspicious kitchen-fire claims, which can cost up to six figures each, said Rich Wickliffe, who oversees State Farm's investigation unit in Florida.

"You have people who can't really sell their homes and they look at their lime-green kitchen and want something else," said Wickliffe. It is unclear how much these fraudulent claims are costing other policyholders, he said.

In May 2010, the state's Kitchen Fire Task Force arrested five Miami public adjusters for their roles in two kitchen-fire schemes, according to a Miami-Dade arrest warrant.

A homeowner told investigators that adjuster Jorge Antonio Espinosa, 34, used a hammer to smash kitchen tiles in her southwest Miami-Dade house. The woman's kitchen appeared to have accidentally caught fire when she left chicken frying on the stove.

Espinosa broke the tiles to make it look like damage from the pan falling so they could get more money from Federated National Insurance Co., the report stated.

Espinosa submitted a claim for $69,000, of which he would keep a percentage. He and four of his employees later were arrested on numerous charges, ranging from organized scheme to defraud and grand theft to tampering with evidence. The result of the case is still pending in Miami-Dade Court.

It's unclear if the homeowners are under investigation for arson or fraud.

The scheme has spread through word of mouth as people hear about payouts that cover a complete kitchen remodeling, according to a 2010 report of the Florida Department of Financial Services.

One red flag is that the homeowner never calls the fire department, which it is not necessary to file an insurance claim. Instead, the person brings in a public adjuster to assess the damage. By the time an insurance company sends an investigator, the kitchen has been cleaned up.

"These are incredibly difficult claims to prove," said Chris Neal, a State Farm spokesman.

Few investigations lead to arrests and even fewer to convictions, state records show. In most cases, an unscrupulous public adjuster tells homeowners how to start the fire and get away with the scheme, the state financial services report said.

"The public adjuster knows how to coach them," said Wickliffe of State Farm. "Lo and behold, they get a whole new kitchen."

On June 30, state investigators in Davie trained about 150 public adjusters and investigators about how to spot red flags in kitchen fires. The state is required to investigate each suspicious claim to keep property insurance rates from going up, said Lynne McChristian, the Florida representative of the Insurance Information Institute.

Sometimes, investigators are able to recover fire debris and test it for accelerants such as gasoline or lighter fluid. But most often, homeowners have cleaned the evidence by the time investigators are called in. When accelerants are detected, police can build a good arson case, McChristian said.

In 2009, a Hialeah man was arrested for arson and insurance fraud after lab tests found traces of gasoline in his kitchen fire.

Cristain Rodriguez Acosta admitted to setting the fire and causing $100,000 in damage to his home to renovate his kitchen with insurance money, according to the State Fire Marshal's Office. The outcome of that case was unavailable in Miami-Dade Court records.

"Most people don't think of arson as insurance fraud, but it is," McChristian said. "All policyholders end up paying for it."

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Sun-Sentinel story