Trust This. May 26, 2023

Happy Friday and Memorial Day weekend, the official kickoff for summer vacations.

Situation Awareness: Starting January 1, 2024, to be eligible for recording, a deed must include the printed name and address of each witness who signed the deed. Time to update those templates.

1 big thing: Restricted foreign ownership

Source: DALL-E2

Florida’s new Conveyances to Foreign Entities Act becomes effective on July 1, and will complicate closings with foreign buyers from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria.

Why it matters: Traditionally, title agents, trustees, and Realtors could care less about a buyer’s nationality so long as the check cleared. But the new laws will require affidavits, uncomfortable questions, and investigations to ensure compliance.

A government official, entity, political party, business, or person who is from or lives in one of the listed “foreign countries of concern,” are not allowed to own:

  • agricultural land;
  • property within 10 miles of a military installation that is at least 10 acres in size; nor
  • property within 10 miles of critical infrastructure facilities such as airports, spaceports, seaports, chemical plants, power plants, water or sewer plants, etc.

If the property was acquired before July 1, 2023, the owner must register with the State. If they purchase it after July 1, 2023, they must divest their ownership or face criminal charges and civil fines.

The law does not apply to people from the prohibited countries if they are resident aliens (Green Card), or naturalized citizens of the U.S.

  • A foreign person from one of these countries may purchase up to one residential property up to two acres so long as the property is over five miles from a military installation, and the buyers have a U.S. non-tourist visa or asylum and register with the State within 30 days of acquisition.


State of play: Title insurers will require an affidavit from anyone purchasing property within 10 miles of a military installation or critical infrastructure facility, stating under penalties of perjury that they are not subject to this law and they are in compliance with the statute. Since it is difficult to know whether a property is located in one of these “red zones,” we expect that this will be a form signed in every closing after July 1, 2023.

Violations of the laws are a second-degree misdemeanor up to a thirddegree felony for the buyer and first-degree misdemeanor for the seller.

Yes, but: Tennessee and other states have passed similar laws. A group of Chinese citizens living and working in Florida have sued to declare the new law unconstitutional.

Our thought bubble: To comply with the new statute but not violate Fair Housing laws, we will require all beneficiaries to execute statements under penalty of perjury each time a new trust is created. They will confirm that they comply with the new law and are not part of the prohibited class of owners. We will be required to sign affidavits at closing to that effect, and we must have assurances from every beneficiary that what we assert is true

The bottom line: There will be more paperwork … and suspicion … around Florida closings after July 1.

2. Floods and solar panels

Source: DALL-E2 

Floridians living close to the coast are seeing flood insurance rates soar, and some with solar panels are receiving insurance cancelation notices.

Why it matters: More homeowners than ever will be required to carry flood insurance on their homes, and more and more are installing solar panels.

By the numbers: FEMA’s funds were running a deficit of over $20.5 million as of last November before the agency had to pay out claims for Hurricanes Ian and Nicole.

Of the 2.2 million flood policies nationwide, 597,967 are in Florida — the most of any other state.

Congress mandated that FEMA implement a new “Risk Rating 2.0” that we’ve written about before that rates properties’ premiums based on additional factors other than just elevation.

One major new factor is proximity to a body of water or the coast, and another one is the cost of rebuilding. So more expensive homes closer to the coast sometimes increase by over 200% while cheaper homes further inland may see decreases in premiums.

What’s next: Florida’s legislature passed laws requiring any home insured by Citizens Insurance also to carry flood insurance by 2027 whether the property is located inside a flood zone or not. And every property owner in Florida should carry flood insurance as we learned last year that anyone could be flooded in Florida. In addition to the National Flood Insurance Program, private flood insurance companies, such as Neptune Insurance, may provide better coverage and cheaper premiums.

Adding insult to injury, homeowners with solar panels are receiving insurance cancelation and non-renewal notices more frequently lately.

Florida is third in the nation for the number of installed solar panels on homes. But those homeowners are receiving notices that their insurance coverage is dropped if:

their roof is over 10 years old;

they’re covered by a carrier that is in that 50% of carriers that won’t cover solar panels; or

they failed to tell their insurer that they installed the panels and then have a damage claim.

The bottom line: Whether it’s flood insurance or solar panels, the best course is to shop around and have an experienced agent on your side to ensure you’re insured.

3. Catch up fast

1. A Philadelphia AirBnB host loses big when a guest refuses to leave, and he has to sue to remove him. Real Estate Investing and Landlord News – YouTube 

2. House flipping coach hit with $400 million fine. Marketwatch 

3. How a US debt ceiling default would eviscerate the housing market for buyers, sellers, and lenders. Realtor dot com 

4. Mortgage rates creep higher as the debt ceiling deadline approaches. HousingWire

4. Pic of the day

Too bad the internet doesn’t have smell-o-vision, or you could smell the wonderful aroma of these Yesterdays Todays, and Tomorrows that are blooming like crazy in the backyard this week.

“A career is what you get paid for. A calling is what you’re made for.” — Steve Harvey

A little history: Years ago, the computer system that selects jurors in Orange County konked out and failed to send out jury summonses. To fix it, the system cranked out a bunch of emergency summonses and sent them out at the last minute. I received one of those the evening before I was summoned to appear for jury duty. I and many others showed up to court the next morning, complaining that we’d received less than 24 hours notice to be there. Everyone was cranky and grumbling about their dumb luck.

Chief Judge Belvin Perry came to the lectern in front of the jury waiting room and apologized for the inconvenience, explaining the problem. Then he told us that we were lucky that we weren’t some of the folks he’d had the Sheriff round up at the local Walmart the day before because no summonses had gone out.

Then he reminded us why we were there. I’m paraphrasing, but he said something to the effect: “We must remember that foreign shores and forest floors are soaked with the blood of those who fought and died for our constitutional right to a trial by a jury of our peers.” He told us that we were all honoring their memory by showing up that day to ensure those rights were carried out.

Needless to say, we all stopped complaining. Each year when Memorial Day rolls around, I’m reminded of Judge Perry’s calling, his words, and the importance of this holiday weekend.

Makes me want to listen to this performance again.


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