Trust This. Orange County Rent Ordinance Passes

👋 Happy Friday! I’m on my 😎 mini-vacation in the 🐭 Disney area today, so I’ve written this Post a few days early. Keep that in mind if what you see below may not have the latest and greatest 🥣 scoops.

1 BFD: Orange County tries to reign in rent

Orange County Commissioners unanimously approved a new ordinance that requires a minimum 60-day notice to tenants if the landlord will raise rent by more than 5% at the next renewal of the lease for monthly or quarterly tenants.

Why it matters: This is the first time that such an ordinance has been passed in Orange County, and it affects all landlords in all rentals located inside the County, including inside municipalities. And it looks like it’s the beginning of the Board’s attempts to protect tenants from higher rents.

Violations of the new ordinance could land the landlord in hot water with fines up to $500 per violation. Upon presentation of a proposed increase exceeding 5%, the tenant may reject, accept, or negotiate a new increase. We assume that if they reject the increase, then they would not renew the lease.

What's next: The Commissioners also directed staff to draft a rent stabilization ordinance that may have the capability of capping rent increases at the 12-month average of the Consumer Price Index for landlords who own four units or more. This could come before the Board as early as August 9 but no later than August 23 if it is to make the November ballot.

Go Deeper - Orlando Business Journal (Subscription)

2 BFD: More insurance woes

Demotech may downgrade the ratings of 27 of Florida’s 40 property insurance companies from their current “A” rating to “M” or “S.”

Why it matters: This could send millions of property owners scrambling to find better-rated insurers, since the terms of most conventional mortgages include provisions that require the owner to maintain property insurance coverage from an “A-rated” insurer only.

The rating agency has said it doesn’t think the latest legislative changes do enough to ensure that the insurers will remain viable in the face of mass catastrophic events such as powerful hurricanes.

Situation Awareness: State regulators argued that the ratings agency is not following its usual formulas and guidelines for such ratings, and Demotech has agreed to delay the ratings changes for an undefined time as of this writing.

It is expected that owners would have at least a few months to obtain new insurance from a higher-rated carrier, but if they are not successful, then the lender could “force-place'“ insurance on the property with a carrier of the lender’s choice. Such force-placed insurance insures only the asset for the lender against casualties such as leaks, fires, and vandalism.

Our thought bubble: Having seen many homeowners confronted with force-placed insurance, we have experienced their inability to continue paying the monthly mortgage payments when such expensive coverage is added to the monthly mortgage payment. This makes Florida a less-attractive place to relocate.

3. What you missed

4. Parting shot

You can lead a Labrador Retriever to water, but you can’t keep him from swimming.

On Sunday, I heard this follow-up on Dolly’s hit for the first time. Where has Chapel Heart been all my life?

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