What is Homestead

What is a Homestead?

Think of the word homestead and pioneering families heading west to settle the land likely come to mind. But in real estate, the word has a different meaning.

A homestead is your primary residence, which in many states is given an exemption from a portion of property taxes, or is even shielded from some liability. In the state of Florida, your homestead is also granted special treatment under probate law.

For your home to be designated as a homestead, it must be your primary residence. That means if you live in Florida only during the winter months, it can not be a homestead property.

A homestead designation doesn’t happen automatically. To qualify in any given year, you have to own the home as of January 1st of that year. Then you have to apply within the first few months to the county where you live, offering proof that you own the home and are a Florida resident. In Broward County, you can apply here. In Palm Beach county, apply here.

Here’s what having your home designated as a homestead in Florida will do for you:

  • Protects you from creditors. If someone sues you for a money judgment and you lose, you can be forced to sell your assets to pay the judgement. If your home has the designation of homestead, you cannot be forced to sell it. You also can’t be required to sell a homestead property to pay off other outstanding debts.
  • Gives you a break from a portion of your real estate taxes. A complicated formula is used to exempt a portion of your home’s value from property taxes, but most homeowners save hundreds or thousands of dollars each year.
  • Allows surviving spouse and minor children to have special treatment. When the person who owns a homestead dies in the state of Florida, the surviving spouse has legal rights to remain in the home, regardless of  what’s in the person’s will.
  • Shields the home from creditors during probate. After the homestead homeowner dies, creditors owed money by the estate cannot put a lien on the home.

Once you have a homestead designation, the county will continue to apply it each year. In the event you no longer quality for a homestead–say you buy another primary residence and use your former home as a rental unit–the law requires you to notify the property appraiser’s office by March 1st of that year to remove the exemption. If you don’t do that, you can be subjected to hefty penalties.

If you move from one Florida residence to another, it is crucial that you apply for a homestead exemption, if not immediately, at least within two years of buying the new home. That’s because Florida’s Portability Law allows owners to transfer savings from the state’s property-tax-lowering “Save Our Homes” benefit from one homestead property to another within a two-year-period. To qualify for that benefit, you have to submit a portability application along with your homestead application.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate or probate matter helps insure that the process goes as smoothly as possible. The Law Office Of Gary Landau is rated 10 out of 10 by the legal website AVVO. For more information, call 954-979-6566 or email for a free consultation.

Real Estate Closing Horror Stories

In the spirit of the Halloween season, we thought it would be fun to turn our attention to real-estate closing horror stories—for the amusement of Realtors, as well as home buyers and sellers. (They’re interesting stories, as long as they didn’t happen to you!)

Thankfully, most real estate closings occur without a glitch. Occasionally, small problems arise, but we easily work them out. Once in a blue moon, however, the deal blows up in a virtual apocalypse.

Here are some horror stories our firm has witnessed:

  • Furniture held hostage. I always advise sellers not to let buyers move anything into the home or do any work before the closing. I advised the same thing to this couple, who were the buyers, who wanted a place to store their furniture. They didn’t listen, and the seller let them take over his garage. The week before the closing, however, the buyers’ financing fell through, and they reneged on the deal. The seller was entitled to keep the deposit, but he decided to hold the furniture for ransom, too. It took months of wrangling before he let the buyers retrieve all their things.
  • No deposit was tendered. In this deal, the buyers were a lovely young couple, but they didn’t have much money. Their aunt had generously offered to pay the $5000 deposit called for in the contract. The title company never noticed that the aunt never sent the money to them. It was only at the closing table that everyone discovered the aunt had reneged. Because the couple couldn’t make up the balance, they could not close on the house, which enraged the seller. He did not have the deposit money to keep as a consequence of the breach of contract. I was brought in after all of this occurred. Ultimately, it was resolved after several drawn-out lawsuits.
  •  Dispute over medical bills. The buyer and seller agreed that the seller could stay in the property after the closing and pay rent to the new owners for several months. A little while after the closing, the seller-turned-tenant fell off a ladder while making repairs. The man had no insurance and insisted via a lawsuit that the new owners were responsible. They countersued that it was he who was liable. During the dispute, the injured man refused to move out of the house, even after the lease expired, so the new owners could not move in.
  • Walk-through surprise. This is probably the most common horror stories, as we have seen it happen more than once. The seller promised to do the substantial repairs identified in the inspection. Several times before the closing date, he told his Realtor the work had been done. But when the buyers and their real-estate agent walked through the property on the morning of the closing, not a single fix had been made. Fortunately, this situation typically doesn’t blow up the deal; instead, I, as the closing agent, escrowed enough money from the seller to cover all repairs.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate deal helps insure that the process goes as smoothly as possible. For more information about your real estate contract in South Florida, call 954-979-6566 or email for a free consultation.


What Happens If You Were Planning to Close on a New Home When Hurricane Irma Struck?

Hurricane Irma is gone, but the effects of her wrath are still being felt all over South Florida. One group impacted are people who have an active contract to buy or sell their home.

Even if your closing date was initially a few days before Irma hit, you no doubt found that it was impossible to get homeowner’s insurance. So if you were taking a mortgage, you couldn’t close. That’s because insurance companies freeze new policies once a storm takes aim.

Now that the storm has passed, you’ll need to take certain steps to move forward with the deal.

1) Get a written extension of the contract closing date, if necessary. The standard real estate contract provides for a short delay for after things return to normal, a clause known as “force majeure.” If the delay will last for more than 30 days, either the buyer or seller can cancel the contract without incurring any financial penalties. If you’re still interested in preserving the deal but think the delay in your closing date may be significant, you’ll want your Realtor or attorney to get all sides to agree in writing to extend the date.

2) Have a new, professional inspection. You’ll need to wait for power and water to come back on before you can have the home re-inspected. It’s something that every buyer should absolutely do. Even if the original inspection took place the week before the storm, you’ll want to have it repeated, because the home is obviously at risk for being in a different condition now. (If you’re taking a mortgage, your lender will require that one is done.)

3) Determine who pays for repairs. In many contracts, the seller must return the house to the condition it in when the buyer signed the contract. But sometimes, it’s the buyer who has to pay. You’ll want your lawyer to check out the “risk of loss” section of your contract and let you know who is responsible.

4) Renegotiate if necessary. If the home has been changed by the storm, you may need to renegotiate the price of the sale. However, the house must be in habitable condition before any lender will agree to a mortgage.

5) Stay in touch with your lender. According to local media, many lenders seem to be honoring their interest-rate guarantees that technically expired when your closing date got moved. Still, you’ll want to contact your mortgage broker or lender to see specifically how the storm affected the terms of your loan.

If you would like to speak with an experienced real estate attorney, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.

How To Have A Smooth Real Estate Closing When You’re the Seller

Sellers of real estate property often think their work is finished when the contract is signed. But until you’ve handed over the keys, and your closing attorney has handed over the deed, there are still things you need to focus on:

How To Have A Smooth Real Estate Closing When You’re the Seller1)   Title issues. If your closing agent/attorney turns up any problems, or “clouds” on your title, they will work to resolve it with your help. Maybe you forgot to get a permit closed for work you did a long time ago, or maybe there was a mistake when you added a relative to the deed. While these clouds can be cleaned up by a qualified attorney, there may be steps they need you to take, which you must do right away.

2)   Repairs.  If you haven’t maintained your house over the years, you might want to consider having your own professional inspection done before you list the home, then fix the problems that are detected, so they won’t cause problems later. If you haven’t done this, and your buyer’s inspection turns up trouble (assuming you are not selling the home “as is”), you’ll need to ensure those repairs as completed as soon as possible.

3)   Condition of the property. When you sign a contract, the buyer is agreeing to buy the home in the same condition they saw it. During the period between contract signing and closing date, it’s important for the seller to maintain the property, and to repair anything that breaks during this time. After you move out and before the buyer has a walk-through, be sure to thoroughly clean your soon-to-be-ex home inside and out.

4)   Closing documents. When you get the documents before the closing, you’ll need to review them as closely and as quickly as possible to make sure all the figures are correct. If you have any questions, ask your attorney to explain. That way, when you get to the closing, the final steps will also be as smooth as possible, and you’ll soon be on your way to your next adventure.

Sometimes sellers in South Florida think they do not need an attorney. My years of experience shows hiring an attorney is always a cost-effective move, because having a professional not only doing the seller’s documents but also representing your interests can save you time, headache, and, most important, money. Problems that turn up on the seller’s side after the contract’s signing can sometimes even kill the deal if they are not handled quickly and professionally.

For more on the steps buyers should take after the contract signing, see my prior blog.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate deal helps insure that the process goes smoothly. For more information about your real estate contract in South Florida, call 954-979-6566 or email for a free consultation.

Why You Should Use a Realtor for Your Real Estate Deal

Real estate buyers or sellers sometimes think that bypassing a Realtor is a smart move. But after years as a real-estate attorney in South Florida, I can tell you that in most cases it is not.

An experienced Realtor brings a lot to a real estate deal that home buyers and sellers can’t adequately provide themselves. In the same way that you wouldn’t perform your own tonsillectomy or replace your car’s transmission, you shouldn’t handle a real estate transaction involving tens or hundreds of thousands of your dollars without a professional. (And no, I’m not getting paid to say this. It’s just that I’ve seen many deals where people bypassed a Realtor and later found that didn’t serve them.)

Why You Should Use a Realtor For Your Real Estate DealIf you are a buyer, you will benefit by having a Realtor show you properties that fit your exact criteria—and it doesn’t cost you anything, because the seller pays the Realtor’s commission.

If you are a seller, you will benefit by a Realtor’s expertise in how to price your property so that it both brings in top dollar for you and still entices a buyer to purchase your home. An on-target price is determined by what’s happening in your area, how much work has been done on your home, how it looks to buyers, and many other factors. (One of the things I have seen when people don’t use Realtors is that buyers agree to pay too much, and then the deal falls apart when it doesn’t appraise at that unrealistic level. I’ve also seen sellers give away their house for less money than they could have gotten.)

Here are other ways a Realtor can benefit your deal:

  • Realtors are experts in the improvements you might consider making to your property get the best price when you are selling your home, and which ones are not going to pay back their cost. They can also help you set up, or “stage,” your home to best appeal to buyers. Realtors can often recommend trustworthy contractors they have worked with on other deals.
  • Sellers don’t need to be home every time someone wants to see their property, because a Realtor accompanies them. Since they prescreen and stay with those buyers, you’re also less likely to have a problem allowing strangers to wander through your home.
  • Realtors understand the neighborhoods they specialize in, so they can direct buyers to those that would appeal to them, considering what’s important to you, from school quality to location near parks or shops to neighborhoods with a trendy vibe.
  • If a buyer is interested in a home where there will be competitive bidding, a Realtor can be an ideal partner to help you determine an offer most likely to succeed.
  • Once a contract is signed, the process of buying a home involves many steps, from applying for a mortgage to arranging for an inspection on time to having a last-minute walk-through of the property to be sure it’s in proper condition. A Realtor (along with your real-estate attorney) can help you successfully navigate this confusing process.
  • Realtors are bound by a strict code of ethics as members of the professional organization, the National Association of Realtors. In most cases, both buyers and sellers can expect honest and ethical treatment in all transaction-related matters.

While Realtors are not required for a real-estate deal in South Florida, they, like real-estate attorneys, are an important asset for a smooth and successful transaction. It’s crucial, though, that you find a good one. Check online for reviews (on sites like Google and Yelp), ask friends if they had a good experience with their Realtor, or check with people in the business; I often recommend Realtors I know to be excellent to clients who ask me for a referral.

For more information about buying or selling property in South Florida, call us for a FREE legal consultation at 954-979-6566 or send us an email. Attorney Gary Landau personally returns all calls and emails to him.