Friday, May 1, 2009

FENCE ENCROACHMENTS

Winter Park Home, Volume 7/Issue 2, 2009

John J. owns a lot in a platted subdivision, and called me concerning his neighbor’s recently constructed fence. The fence encroaches the length of the Easterly side of John’s property by approximately one foot. He overheard his neighbor joking to some friends that he would eventually own this strip by adverse possession. John asked me if his neighbor was right – that he would lose ownership of this one-foot strip of land over time if he did not take any affirmative steps to challenge his neighbor.

I first asked whether he or any of his predecessors in title ever gave his neighbor permission, either verbally or in writing, to build a fence on his property. John gave me a copy of his title insurance policy which confirmed, as of the date he purchased his property, that there were no recorded grants of easements in favor of his neighbor. He also confirmed that he has never given his neighbor permission to construct a fence on any portion of his land. I then explained that Florida law requires any transfer of an interest in real property, including a grant of an easement to construct a fence, be in writing and recorded in the public records in order to be enforceable. Additionally I explained that even if he gave verbal permission to his neighbor, that permission could be subsequently withdrawn.

He will not lose his property to his neighbor by adverse possession. Adverse possession claims fall into two categories – those “under color of title,” and those “without color of title.” In each category the person claiming adverse possession must physically occupy the property, to the exclusion of all others, for a minimum period of seven years. This possession must be open and notorious, without the consent of the record title owner. The adverse possessor will typically construct a wall or fence to establish the boundaries.

“Color of title” means that the adverse party bases his/her claim upon a recorded document in the claimant’s chain of title. A title search of John’s property revealed that there are no recorded instruments to support a claim under this category. The second option – “without color of title” – does not require proof of interest based upon a recorded document, but does include additional requirements, including proof that the “adverse claimant” has paid taxes on the property for seven consecutive years. The claimant must file a return with the Property Appraiser within one year of taking possession, and pay taxes on the land for seven consecutive years. Since the property appraiser’s records reflect that John is the only person paying taxes on his land, there is no valid basis for his neighbor to claim adverse possession “without color of title” over a portion of John’s property.

John then asked whether his neighbor could establish an easement right to use this same strip of land. The answer is a qualified yes, and only over a twenty year period - his neighbor would also have to judicially establish that his possession is actual, continuous, and uninterrupted for twenty consecutive years, and that possession is without the owner’s express or implied permission. The right to use the land must also be exercised under some claim of right, inconsistent with the rights of the owner.

Florida courts have consistently ruled in favor of the fee property owner and rarely in favor of the claimant in these matters, and have held that the use of another’s land is presumed to be with the owner’s permission. The burden of proof is on the claimant to prove that such use or possession is adverse to the owner. The owner does not have to show that the claimant’s use was permissive. The claimant is given the burden of presenting competent evidence to rebut the presumption of permissive use.

I advised John that he has the right to ask his neighbor to move the fence to the property line, and that if his neighbor refuses he can move the fence himself (since it is on his property). John admits he is happy with the quality of the fence, has a good rapport with his neighbor, and only wanted to know his legal rights. He also told me that he will tell his neighbor that for now he is OK with the location of the fence, and that he will ask that it be moved back to the property line the next time it needs to be repaired or replaced. John also assured me that if his neighbor does not comply with his directions that he will contact me again to address the matter more formally.

As true as the expression “good fences make good neighbors” may be, fence encroachments can create significant friction between neighbors. Relocation of an encroaching fence, or a properly drawn fence line agreement can settle issues that may otherwise be unresolved for many years. In these situations, each neighbor should retain their own legal counsel to address the issues and available solutions.

Visit our website for more information on this subject.

Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Monday, April 20, 2009

ASK A LAWYER - Where There's A Will, Here There's A Won't

Orlando Sentinel, April 20, 2009

Question:
My mother, who was living in New York, passed away about two years ago. She made my sister executor of her will.

My sister has refused to share the contents of the will with my brother and me, and we don’t know what lawyer prepared it. What can we do to obtain a copy of my mother’s will?

D.C.
Orlando

Answer:
Each state has its own laws regarding wills, which means you will need to contact a New York lawyer for more advice.

However, if this were a Florida resident’s will, the person possessing the original will has a legal obligation to deposit it with the local clerk of court within 10 days of learning that the maker of the will has died. The will is then a public record that can be viewed by any interested party.

If a person holding a Florida will refuses, or otherwise fails to file the will with the appropriate clerk of court, you can file a petition with the probate court to compel the filing of the will. The person who refused to file the will may be forced to pay the petitioner’s attorney’s fees and costs if the court finds “no just or reasonable cause” to excuse that person’s failure to deposit the will.

Visit our website for more information on this subject.

Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Friday, April 10, 2009

Local Owner Speaks Out

Orlando Business Journal, April 10, 2009

Local owner speaks out on whether his business will benefit from Obama's stimulus plan:

"Ultimately, the stimulus package should filter down to Main Street and create activity so the legal business as a whole benefits. I don't think we have seen the increase happen yet, but it appears we're heading in the right direction"

Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Monday, February 23, 2009

SHORT SALES

Winter Park Home, Volume 7 / Issue 1, 2009

Short sales reflect the current downturn in real estate valuations - they are real estate closings in which there are insufficient sales proceeds to pay off the outstanding liens and closing costs of the seller. They typically occur because the outstanding balance due on a mortgage is greater than the current market value of the property. The buyer typically will be told in advance that the seller has contacted or will contact the lender in an attempt to have the lender accept less money than the outstanding mortgage balance.

There are three primary options that a seller needs to consider when presented with a contract offer which will result in a short sale. First, he/she can take a loss on the sale of the property and pay the difference from other funds. Although this represents an economic loss, this approach will not impact the seller’s credit rating, and the seller will not have to deal with the fallout of a lowered credit rating or potential bankruptcy proceeding.

The second option is for the seller to ask the lender to accept less than the amount currently owed. The lender may agree to cooperate with the seller’s request, if the partial payoff is likely to be preferable to the alternative – i.e. the costs involved in a foreclosure action, the associated costs in holding the property, and the reality that the amount realized by the lender when selling the property after a foreclosure (especially in today’s market) may be less than the offered partial payment. However, most lenders will not even consider this request unless the seller is already significantly behind in his payments – generally a minimum of three monthly payments.

Prior to entering into any short sale agreement, the lender will require additional proof from the seller relating to the seller’s overall financial position and the current value of the property, together with other requirements. Lenders will not readily grant permission to accept less money than owed, so the documentation provided by the seller will be carefully scrutinized. If, for example, the lender determines that the information provided on the original loan application was “inaccurate,” the seller could also expose himself to charges of mortgage fraud. Before requesting a short sale agreement, the seller must carefully consider all potential ramifications of this action. Our law firm always recommends that the lawyer meet with the client to review his or her options, consider the tax consequences of the sale, and the impact on the seller’s credit rating before proceeding with a short sale.

If a seller is able to obtain permission from the lender for a short sale, he/she still needs to address the tax consequences of the transaction. The lender will either forgive the additional indebtedness, or require the seller to execute an additional promissory note for the amount that is not paid off at the closing. In other words, the debt does not merely disappear. A forgiveness of debt will most likely result in an additional tax obligation to the seller – the IRS will treat this forgiveness as additional income. The only exception to this rule is if the property in question that is being considered for a short sale is a seller’s primary residence. The tax laws currently provide that the debt forgiven by a lender during the sale of a debtor’s primary residence is exempt from being treated as taxable income (up to $2 million of forgiven debt is eligible for the taxable exclusion, and $1 million if married and filing separately). A new promissory note, on the other hand, does not relieve the seller of the existing financial obligation, and the seller can still be sued for non-performance under its terms.

Both the contract seller and the contract purchaser need to be aware that the process of obtaining an approval by a lender for a “short” payoff is a difficult and time consuming process. This article is only intended to outline some of the issues, and is not intended to fully explain all the steps and hurdles that may occur. Each party needs to obtain his or her own experienced real estate counsel to fully understand the ramifications of the short sale contract. The seller needs to thoroughly understand each of his/her options.

When our firm represents a buyer in this situation, we not only initially advise our client of the steps that are involved prior to closing, but we also recommend that our firm, as buyer’s counsel, hold the escrow deposit. A Short Sale Addendum to Purchase and Sale Contract should always be included as part of the contract under these circumstances, which provides that the contract is contingent upon: 1) each of seller’s lien holders approving the purchase price and the terms of the contract and HUD-1 Settlement, and confirmation that these lien holders will satisfy or release the liens for the reduced payoff amounts; 2) timely notice by the Seller that the lien holders have approved these terms; and 3) acknowledgment by the buyer that the lenders/lien holders are not obligated to approve the contract. The buyer of course must not be related to the seller, and the contract must be a good faith – arms length transaction.

The third option, of course, is for the seller to stop making payments altogether, and to allow the property to be foreclosed. This will have a significant impact on the owner’s credit rating, and may prevent the owner from obtaining financing to purchase other property for years to come. It is noteworthy that borrowers often file bankruptcy to halt the foreclosure process. This is a stalling tactic only, and most likely will not prevent the foreclosure from ultimately being completed.

Short sales represent significant hurdles for a seller, and a recognition by a buyer that the seller will not be obligated to complete the transaction in the event that the seller is unable to obtain the necessary consents from the outstanding mortgage and lien holders. Both the buyer and the seller should retain their own legal counsel to represent them through this potential closing quagmire, and to realize that there are many potential issues involved for both the buyer and the seller.

Visit our website for more information on this subject.

Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Monday, December 29, 2008

ASK A LAWYER - Executors Are Due Reasonable Commission

Orlando Sentinel, December29, 2008

Question: I am single and have no children. I currently have a trusted friend as executor of my estate, but she is close to my age, as are my siblings.

How do I find a good candidate to appoint as my estate executor? I want to ensure that whoever is appointed is compensated but cannot drain my estate.
J.J.
Orlando

FRANK POHL
Pohl & Short, P.A.

Answer:
In Florida, executors are known as personal representatives. In addition to family members and financial institutions such as banks, good candidates for personal representatives are often found among financial professionals such as accountants and financial planners.

Under Florida law, personal representatives are entitled to a reasonable commission. The commission is presumed reasonable by a court if it is not more than 3 percent of the first million dollars of the estate, with that percentage gradually decreasing as the estate value increases.

In addition, a personal representative is entitled to compensation that a court determines reasonable for so called “extraordinary services,” such as selling property or conduction litigation. Personal representatives, however can agree to limit their compensation to amounts below what a court would otherwise award them, and you can seek such an agreement.

Visit our website for more information on this subject.


Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Monday, December 1, 2008

WHO GETS THE DEPOSIT?

Winter Park Home, Volume 6 / Issue 4, 2008

In today’s real estate marketplace, many purchasers are reconsidering their offers, deciding to terminate their contracts, and seeking a return of their escrow deposit. These situations not only require a determination concerning the rights of the parties to enforce the contract provisions, but also often result in disputes over who is entitled to receive the earnest money deposit. Consider the following examples.

In August, 2007 David J. executed a contract to purchase a home for $500,000, and gave the Escrow Agent (the Seller’s attorney) a $25,000 earnest money deposit. The closing is scheduled for January of 2009. A recent appraisal reflects that the home is currently worth $375,000, not $500,000, and Mr. J. is looking for a reason to back out of the contract. The contract does not provide that that the house must appraise for the purchase price, there are no financing contingencies, and the property is being purchased “As-Is.” Mr. J. is not represented by an attorney.

In a second example, Mary Smith executes a contract to purchase a condominium unit, and gives the realtor a $10,000 deposit. There is no financing contingency, and Mary is unable to put together sufficient financing or cash to complete the purchase of the property. Mary requests a two-month extension of the closing date and the Seller, anxious to sell the condominium unit, agrees to the extension. Five days before the second closing date, Mary requests an additional contract extension. The Seller decides that this is a no-win situation. He refuses to sign an additional extension; advises Mary that he is ready, willing, and able to complete the closing; and, attends the closing at the scheduled time. Mary does not come to the closing. The Seller now requests a forfeiture of the entire $10,000 deposit.

Each of these examples requires an analysis and application of the deposit/escrow provisions of the contract. Clearly, both the Seller and the Buyer should consult with an attorney to determine their rights to the escrow deposit and their obligations under the contract. The Escrow Agent--the person or entity holding the escrow deposit--is generally authorized to disburse the escrow funds in accordance with the terms and conditions of the contract. In each of these examples, the disbursement of the escrow funds appears straightforward. The Escrow Agent typically will request that the Seller and the Buyer execute a release of deposit and termination of the Contract, and, once it is signed, will disburse the funds. If the parties cooperate, disbursement is made quickly. Often, one of the parties refuses to cooperate. This places the escrow agent in a position of being sued if the escrowed funds are incorrectly disbursed.

Standard Q of the FAR/BAR Contract for Sale and Purchase describes the proper disbursement of the escrow deposit. If there is no closing, the Escrow Agent must determine who is entitled to the deposit. To avoid being sued for improper payment, the Escrow Agent generally will have the parties sign a release and waiver establishing how the money is to be disbursed. If the parties don’t cooperate, the Escrow Agent can hold the deposit longer, while the Seller and the Buyer negotiate the proper payment. The Agent can also choose to file a lawsuit, known as an interpleader, in which the deposit is placed under the control of the court. The Seller and Buyer would then litigate ownership of the deposit. The court will take any filing fees and the Escrow Agent’s legal fees directly from the deposit, reducing the amount immediately available to the winning party. Although the court may ultimately award these fees to the winning party, there is no guaranty that the prevailing party will be able to collect the fee money from the other side.

Additional rules govern a real estate broker acting as an Escrow Agent, since brokers are governed by Chapter 475 of the Florida Statutes. A broker, in addition to filing an interpleader action, can also make a request to the Florida Real Estate Commission for a formal escrow disbursement order. Of course, each of these steps will delay final disbursement of the escrow deposit.

This analysis describes only part of the picture. In each of the examples, the Seller “appears” to be entitled to receive the escrow deposit. If the money is to be disbursed to the Seller, the Escrow Agent must also determine if the Seller signed a listing agreement, which typically provides that the real estate broker is entitled to a portion (typically 50%) of the surrendered deposit.

Once again, the Escrow Agent must disburse in accordance with the terms of all contracts. If there is any question as to the appropriate amount to disburse to the Seller and the Realtor, the Escrow Agent is well advised to obtain written authorization from each of the parties.

Initially, each of the Sellers in the examples I’ve described appears to be entitled to recover all or part of the escrow deposits. However, parties can be creative and many arguments can be made and questions raised that can present the Escrow Agent with genuine issues which can make determining who is to receive the deposit difficult. Before disbursing any escrow funds, the Agent should demand receipt of the properly executed releases in order to avoid potential wrongful disbursement suits.

Whenever there is any question about the proper disbursement of an escrow deposit, the Seller and the Buyer should each consult with his/her own real estate attorney. All contracts revolve around specific facts and the contractual obligations of the parties. An experienced real estate attorney can often examine a contract and determine that his client, who is otherwise ready to sign a release in favor of the other party, actually has a valid legal position justifying either a return or forfeiture of the deposit.

Visit our website for more information on this subject.


Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.

Monday, November 17, 2008

ASK A LAWYER - Trouble Pours Out The Downspout

Orlando Sentinel, November 17, 2008

Question:
My next-door neighbors installed gutters on their house, with two downspouts that discharge water heavily on our property every time it rains.

There has been soil erosion on their deeply sloped property that continues to get worse. We have talked to the owners about the problem to no avail. They now have moved out, and their property is rented.

I am concerned that the erosion and flooding will eventually cause damage to my property and to the foundation of my house. What legal recourse do I have?
C.H.
Orlando


FRANK POHL
Pohl & Short, P.A.

Answer:
Both you and your neighbor enjoy certain rights of land ownership. Rain runoff from your neighbor’s higher ground is entitled to its natural flow onto and from his land. Florida law does not permit your neighbor, however, to direct the water flow onto your property if it results in damage to your house and land.

Florida law also recognizes your “reasonable” right to protect your property from this excess water from these downspouts. Subject to any zoning or subdivision limitations, you could construct a fence or wall to slow down or divert the water flow, as long as the fence or wall doesn’t cause the water to pool and flood your neighbor’s property.

The Florida courts apply a reasonableness standard in interpreting these cases.

At this point, you might get some help, or at least advice, from your local government department that handles drainage issues. (In Orange County, for example, it’s the Roads and Drainage Department.) If that doesn’t work, you may need a lawyer to file a legal action to have the excess water discharge directed away from your property, and to determine if you can sue for specific damages.

Visit our website for more information on this subject.

Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.