Zoom Presentation for RAPB Members | April 28th, 2020

Ben Sens from BOSS Construction Group presents with Tod Weston from Coastal Title to RAPB members via a Zoom presentation.

RAPB is Realtors of Broward, Palm Beaches, and St. Lucie. More information: https://rworld.com/

Transcript

Benjamin Sens
Hi everyone, this is Ben from boss construction. Your South Florida permanent code compliance specialist. coming here to you today, Broward Palm Beach, realtors. How are you guys doing? and St. Lucie two. We’re here today to put together an educational seminar that we have together on how agents are closing transactions, how we’re dealing with municipal code, compliance issues and open permits. And I have Todd here. Todd Weston today here from coastal title. He’s on your educational Committee for the board. Hi, Todd.

Todd Weston
Good morning fan. Appreciate the opportunity.

Benjamin Sens
Yeah, so basically, what we do is sort of, Oh, I want Todd you know, similar to a lot of times we go over languages and addendums. But the first thing I’m going to do is go over some things that are in the last 30 days that have happened.

Todd Weston
I’m presuming, we’re going to talk about the COVID-19 issues and some of the addendums and things of that nature.

Benjamin Sens
Yeah. And more specifically, the addendums, how to navigate sales. And I just want to talk about on my end, we’ve been getting the municipalities to cooperate. And and we’ve been able to solve situations to allow buyers and sellers to close, which is really important to our board and our education. And these guys.

Todd Weston
Yes, in most cases, they’re very cooperative. Some of the things that they’re unable to do right now, although I broach the subject with many of the city attorneys has been particularly trying to get magistrate hearings and things of that nature, but we’ll, we’ll address that a little bit later.

Benjamin Sens
Perfect. I just wanted to go over a quick underwriting bulletin Todd, basically. So a lot of the underwriters are allowing flexibility right now, when a municipal lien search was pulled or when an estoppel is pulled

Todd Weston
They’re allowing a lot of I’ll call it

Todd Weston
no harm, no foul, if you want to look at it that way. I mean, as you know, the bill was brought out. I think it was last year with respect to the way that the permits were going to be handled that were six years or older. Where the legislature recognized that a lot of the permits that were pulled and things of that nature were not so crucial to the safety and welfare of individuals. So they’ve let a lot of things loose. Well, in the title business. The same thing happens when we’re looking at things from a legal sense. We’re doing everything we can to review it and look at the impact that could come back at an owner and also obviously an owner means the the title policy and of course, the less that you can have for claims upon a policy is better for all, you know, society as a whole just lessens everything in the impact. So what we’ve tried to do is the underwriters are looking at what is it particularly and See that you’ve actually got the underwriting Bolton on on the board here, which will identify a lot of the various areas that they’re going to either say, Okay, I’m okay with or we’re not okay with and say for instance, let’s take a look at the same number one. It’s a little tight on the screen but we’ll talk about service charges for liens for water and sewage. Well ultimately that’s not such a significant impact on the property or land owner. So the underwriter is willing to say look, if you tried to do your best opportunity to do a search and you could not clear it up now. That’s okay. We’re going to cover you anyway. And they take a look at the I call that the no harm no foul if it’s not so bad, we can fix it. And there’s very few things in this area that can if you look at through number and I’m presuming everyone can see the the underwriting Bolton on the screen as I can.

Benjamin Sens
Yeah, Santiago, right.

Todd Weston
That being said, You have certain things that are in there that are not so significant to the point that it will affect title so it’ll be a huge claim or take away a house. or something along those lines. So that’s how we address these in the underwriting and of the various title companies, underwriters have recognized that in this crisis that we’re dealing with when the associate when the various municipalities are closed, or do not have the manpower, this gives them the opportunity to say it’s okay, you can close we want to show you that we’re behind you. And they’ve been supportive of our industry.

Benjamin Sens
And and you know, and just so the viewers know, municipal lien searches and a stop poles that get requested, those are generally good for about 30 days. So with something like this put in in case of a closing got extended in an update couldn’t be received or

Todd Weston
Well, that’s, that’s for the most part, what it’s really doing. It’s saying that look, we understand that most of these offices are close to mid May that could be extended further, but we really need to do is address it from not just the fact that we cannot reach those municipalities to get the records. But we’re wanting to cover you for that. So it’s just an over uncompressing type of approach.

Benjamin Sens
Okay. And, and similar. I mean, we’ve, you know, most of our municipalities, they’ve been operating they have a lot of flexibility right now. They’re offering a lot of engineer letters to close out things. You’re seeing building officials doing discretionary things in every jurisdiction.

Todd Weston
Oh, everyone’s up. Everyone is stepping in. But you also have to remember that the stepping in it’s more significant where we have the higher transaction rates. Broward County, Miami, of course, Palm Beach, we have a huge amount of business compared to a Monroe County say or up into Volusia County or, you know, other northern counties, you do not see this kind of activity. So even though they’re in effect, and the impact may not be as great, we’re getting such an influx of issues because of this, that we needed to address it and I think they stepped up to do that.

Benjamin Sens
Perfect. Let’s continue this This is House Bill 447, which our Florida realtors really lobbied for. And this was the state basically telling municipalities how they are to interact with open permits and code violations. Now, what I’ve seen from this a lot, particularly in South Florida, I’ve seen building officials and municipalities acknowledge this. But ultimately, it is up to the local building official on what they want to deem as health safety, or life safety or what they are going to close out administratively. We work on open permits and code violations all the time, where they will void out permits for work that is superseded for example, if a property had an open permit in 1992, for a roof and Hurricane Andrew, and there is a roof after that the city or county will administratively closed that out. We see a lot of things happening during hurricanes disasters and pandemic With permitting. So it was it was it was a very long time in the making and House Bill 447. It sets, it sets the lead work for municipalities dealing with these issues and closing them out. Do you have anything else to talk?

Todd Weston
So one of the things that this particular bill was addressing was they left it and a lot of you understand that when you’re stopped by a police officer, that police officer has a lot of discretion. And the discretion is up to the officer of time, the same discretion is left up to say, the code enforcement officer or whoever’s in the permitting and whatnot. And what they try to do is they take a look at the issue, they look at the significant significance of that particular issue and then make a determination. And if you go through, say the bill, it goes into you the property holder has to hold the property for a year, there’s a it has to be six months, it has to have met the guidelines as if it was to meet the code in itself and things of that nature. So if you read through that, it’ll give you a general idea, but believe Not each code officer or municipality can deviate from that to the point where they feel comfortable enough, as you said that it’s either health health or safety issue as far as to make sure that whatever is being done. So example, let’s just say that you have a patio structure. And that you, you find that it may not have been built exactly the code. Well, they’re going to deviate from that a little bit because they want to make sure that that they they meet the terms of the requirements, and I’ll say more of the intent of the bill in 10th of the bill was we’ve had how many agents as you know, out there have had permit issues that have been just opened 1015 years and it’s a headache and the disaster happens, especially depending on which contract you use. If you use the as is a five x and you find out that the burden is put on to the buyer when they buy even though the seller will quote cooperate cooperate, what is cooperate?

Todd Weston
Well, that’s just it. What is cooperating could be as much as saying, look, I looked at my records and I couldn’t find the documents I’m sorry, they just best efforts.

Benjamin Sens
So So again, sometimes these days issues, I see a lot of real estate professionals struggling with them. Because they’re being found out because of the lead time for the lien search or the open permit search, they’re being found outside the inspection period. So then the contract kind of leaves it up who has to resolve these issues? And that’s and that’s the that’s the normal the norm situation in, in South Florida the way we’ve been handling these things for years working together.

Todd Weston
See what’s going to happen typically is an agent Isn’t that an agent doesn’t want confrontation. But we want the deal to close we all do. Everyone’s looking forward to why is that in front of us? It’s because a buyer wants to buy and the seller wants to sell. So who wants to interfere with that? No one, but we have to think about what’s going to happen. It’s almost like buying insurance. You never really know when the claim is going to happen. So when you’re entering into a contract, you don’t want to put everything in the kitchen sink to cover yourself. But at the same token, it depends on the social climate. Our social climate now is down south here, at least in South Florida. You know, a lot of huge open permits, expired permits work that was unpermitted and things. So the safe bet is always to put into the special clauses, something that addresses that.

Benjamin Sens
And and even we’ve been as far as St. Lucie and Martin County and we have members of the board from all over. But, you know, we we’ve actually found Todd and I that contacting these contractors and going into these building departments, again, everything kind of falls on the property owner, the existing owner and even in some cases, when that existing even say, well, we’re going to talk about re occupancy inspections in Miami Dade County, but even when the city has done an inspection prior to the sale of a property, and they’ve deemed it past re occupancy inspection five years later, another buyer another buyer comes in the seller goes to sell the property And they found things they didn’t find the first time. You know, so it in it and it’s amusing

Todd Weston
to see that. I won’t necessarily say it’s amusing. But when these things come out, it’s not such a surprise to say myself for you, but to the owner of the property, you can imagine what that feels like to think that maybe the job wasn’t done properly. The first, the first thing they

Benjamin Sens
do from what I’ve seen, is they go to their listing agent, or they call their realtor. And then they say, you know, I’m the lien search comes in, they’re selling their property, they go to the agent, they say, this is the lien search that the title company gave us. And we do a lot of education even to pull in searches early and try and teach agents when they’re taking the listing to identify these deficiencies and you could help people with that as a title company, like then real estate attorney

Todd Weston
right and whenever someone hires say, our title, company, law firm to do something, I always talk about whether or not we can Do and I would love to do the lien search almost immediately. Because then you can try to get that information within the inspection period. And the the inspection period is obviously crucial. But those type of items are important because imagine if you were the listing agent who also sold these people the house and at the time, they would say, Well, how come you never told me about that permanent educational type of of seminars that we’re giving or being able to provide information to the agent to understand the value of why and how to read a lien search or understand the permit issues? Because imagine if you sold that with live, we’ll go back to the screen enclosure, where they’ll say, Well, you didn’t tell me there was a problem with a permit. Oh, we didn’t think it was an issue at that time. But the fact is, is that now it becomes an issue because you’re listing it, and the new buyer finds that as an open issue. What do you do then? How are you going to explain that? Are you going to say well, I’m sorry, the title company I use last time, I guess didn’t do their job. But yeah,

Benjamin Sens
as usual, and usually, usually it’s the agents recommending the title company or the attorney. And it’s really important that the title company or attorney that you use knows how to navigate through these issues and knows how to read municipal lien searches and examine title and know what to do when and when something can’t be closed out. I mean, some of these things

Todd Weston
very well. They’re interesting you say that, Ben, because, you know, obviously, you’ve got a proven track record. You’ve done well, I’ve our firm has hired you many times because I find that you do the job and do it right. Now imagine though, if there was an error somewhere along the lines, who are they going to come back to? And so an agent has to really understand who’s in front of them, doesn’t matter if it’s a plumber or mortgage company, electrician, the title company, whoever it is so important to really understand what the depth and the breadth of the breadth of their understanding of the business because as much as you’ve got a salesperson selling you use me, you have to know what the capability is and the connections. You know, for instance, my 30 years of practice in law has enabled me to to know a lot of the city attorneys a lot of magistrates and things so it’s easier for me to accomplish not always but so it’s important that whoever and whatever they choose do it right and also as a real estate agent do your research for yourself on what you’re doing know your contract, know your permits, etc etc.

Benjamin Sens
and, and and all the time. And again, knowing about these things in advance not having to go through a contract extension or rate lock. So we’re going to go into a little bit of an interesting topic here, Todd, which we were we were even talking about before this landlord tenants, Airbnb municipal regulations. Now, even with the COVID-19. Now, you know, these guys, their income is affected in their property, and municipalities are highly regulating these things, sometimes providing that the landlord get a license to operate as a hotel. What has been your experience with these things lately?

Todd Weston
So particularly the, the the license, there was some laws passed. And quite frankly, I forget the exact year but let’s just say was, it was 2012 and 2012. They passed some statute that said that any municipality that didn’t already have this in place cannot enforce it later. So you want to look at the different municipalities. So for instance, Pompano stepped in and started coming in and saying, you need to license it as a, a and b, it doesn’t matter if it’s an Airbnb or if it’s a short term rental by yourself or whatever it may be, you need this special license. Well, they didn’t apply because they couldn’t enforce something that’s already against the statute. So you have to know you as valid. So look into that, as far as what’s been happening with with the eviction, well, landlord, tenants and so forth, there’s been a lot of leeway given to the tenant because they understand and I say they being the the government understands that the impact of This COVID-19 situation has is caused so much more. And they say the word unprecedented which it is, I’ve never seen anything like it in any regard. Even when we had a downfall in the in the mid 2000s, with the with the complete mortgage meltdown. So you’re looking at a whole different approach and having to handle things based on societal needs, and that they’re addressing in many ways,

Benjamin Sens
and realtors are constantly working with clients to determine valuation to protect income. So that’s really important. I mean, not only moving in and out of tenant, we’ve seen a lot of questions from our viewers online. What do we do if the tenants moving out of a property and not renewing the lease, however, the tenants not cooperating to show the property the last 30 or 60 days of occupancy? So we’ve seen a lot of these things come into play now.

Todd Weston
While you’re getting more and more, I think tenants that get a little clever and begin to look at the news you Example they know that the evictions have been frozen for a period of time originally was 30 days, 169 and 120. And it really is hard to say where it’s really going to go because an executive order isn’t as powerful as one would think. But the courts have stepped in now too. And they put restrictions on it, where you can only evict on a non payment on anything but non payment. And then even if you did get an eviction, the sheriff’s department is not allowed to serve rid of possessions to XP. So what do you do now your tenant knows. So you’ve got to be able to play that game with your tenant and the real estate agent has to understand with just a very simple one, we had a tenant say I’m not I’m not leaving. And what do you mean not leaving, we had to give them key money to move them out. Because it was important to be able to sell that house and under the contract if you use depending on which one you use. It says that occupancy of any tenant vacated. What do you do that

Benjamin Sens
and I’m so happy you’re here to bring it up. All these legal, you know, solutions because again and I’m still meeting people the room here that’s why I’m looking back and forth. But again, I’m the one thing I had up here as far as this presentation is concerned and you guys and Todd and I can help you further is that local municipalities are using licensing. They’re using licensing to regulate Airbnb short term rental, they’re using business licenses, you open up a real estate office. They’re using a business license to come into your property, to find out unpermitted work, and possibly asked you, you know, I was working with the city of sunrise the other day, thank god they were still doing interior commercial inspections, because some of the cities say we’re only going in commercial properties, or doing exterior or interior or they’re holding things off. So attendant opened up a nursing facility in December, something that the the country and the community really needs. A home health facility, he had built three partition walls. The fire marshal came in ACO which who manages the state organization, which who manages his business came into his place and they said, okay, where’s your municipal license city a sunrise comes in fire marshal comes in and says, Wait, this was a vanilla box. You got you put up these three walls here. And we’re not going to issue your municipal, your local business tax receipt until we see a permit for these walls. And by the way, the permitting and the life safety and architect and engineer, the walls cost $1,000 to put up the permanent cost five or $6,000.

Todd Weston
Yeah, that opens the floodgates to them and, and unfortunately, a lot of the code enforcement officers and whatnot and the permit have been trained to look for situations or issues and it becomes a revenue source for the municipality.

Benjamin Sens
Yeah, and I’m just going to jump to a another slide here, Fort Lauderdale, which which we’ve worked with that city a lot Tod, they’ve gone leaps and bounds, leaps and bounds to to bring transparency to the residents and business owners where they have published every case where they’ve reduced in amount, what they’ve looked to recover their direct costs, sending certified letters, sending code officers out there sending magistrates, and a lot of the cities we’ve seen, like will Manor Southwest Ranches Tamarack places where you’ve, you know, represented property owners at the special magistrate. They don’t do this.

Todd Weston
No, this is this is great. But it also sometimes leads someone to think that well, I can get us a great deal. And you have to understand that as much as the lien search. Each and every one of these issues is a case by case and sometimes if you’re in front of a magistrate, and you have similar cases and you just heard the case before you It sounds like my gosh, I’m sunk, we’re gonna have to pay a fortune. It turns around pretty quickly because the magistrates are trained to not just apply a uniform standard, they also look at it is this is a different case. But this is a great idea of understanding that it runs anywhere from two to 10% of the maximum amount. And you know, you get take a look at the chart, for instance, you’ll see the 10% on the top one of the 41,000. Correct is is actually very fair. I wouldn’t have expected a 2% on that. But you got to look at two to $4,000 as an average,

Benjamin Sens
correct. So I’m, while I’m playing around with this drawing thing here, again, the the the the total and again, so in this class, we’re covering a lot of things we’re covering open permits, code violations and liens. These are actual liens that are on a property. The city’s using these things and these mitigation procedures so they don’t get claimed of selective enforcement. I treated Patrick or Mitchell or Janice or Todd the same way as that, you know. So, again, every case is different. There are repeat offenders, but eventually the city is just looking for compliance. Even like the city of Holland deal which we just mitigated in Tod. They said, if a property’s homesteaded automatic automatic, or you bought the property from the bank $1,000

Todd Weston
they’re very in tune with a true property owner versus an investor. So if you were to go to the magistrate hearing and tell them Hi, I’m an investor and I can’t wait to make $100,000 on this. So would you please reduce the fine by the 60,000 so I can make more money? That’s exactly what they look for. They don’t need here. So you have to be careful as to who it is Yes, they’re not it’s not playing favoritism towards the Alma Omer, but they’re they’re looking to to foster the home ownership.

Benjamin Sens
And they’re also looking to bring these things into compliance. So usually with for example, the hallandale condo owner purchased the condo with a bunch of violations. I don’t know if they were picked up when they closed or not. But again, we’re getting calls from investors all the time looking to evaluate these situations, because they want to know, in a because as profits got very tight the past couple years in flips, these investors, they want to know how to encapsulate things. Try to what to expect. And the first thing I tell them is, before you go to this lien reduction, or lien mitigation or whatever process the municipality calls it, number one, let’s see if there any other deficiencies on the property because they inspect the property before they release the lien, because that’s the only way they have to hold things. Number two, let’s see if the liens recorded properly. And Todd that’s a legal issue. Let’s see if they did what the Florida statute said they should do. Before we enter into a mitigation process, and take even 5%

Todd Weston
you do you have to know, if it’s a legally bound, let’s say, code fine, or somehow a restriction. And that’s, that’s an important part because it’s good. It’s good ammunition when you’re going in there better ammunition is to say and, and not to promote you, Ben, but but you get a professional like yourself, who knows the players so important to be able to walk in and they’ll say, Hi, Ben, because then they have someone they can trust. They’ve entrusted you with the decision making and a lot of times that influence has a significant influence because we’re dealing with people just like you are as a homeowner people and processes.

Todd Weston
Yes.

Benjamin Sens
So we’re going to do is okay, so basically this is a point where I go over our common permitting code violations with our audience when Todd and I educate we We go over residential and commercial and even some industrial properties. I just want to clear the screen because I see this. I don’t mean this. I want to clear this clear all clear all drawings. Yeah. Thank you. This is new, residential, commercial and industrial and Todd and I, we’ve gone throughout South Florida to the boards to different real estate offices to educate people. And your Broward Palm Beach St. Lucie board, you know, brought us so we’re grateful to be here today. We’re going to go over residential, commercial, industrial land use classifications, zoning verifications, all of these things that are so important. Again, I get calls from realtors. They don’t know if they’re dealing with Boca Raton proper or unincorporated Palm Beach County. Well, we have to go on the property appraiser. We have to look at the folio I got a call from a sign contractor yesterday. Because we are doing a consulting work for a hotel sign, and he said, but we did these hotel signs in the city of Miami Beach. It should be the same with the city of Miami. I told him no. So everything’s different at a different point. And legislation is constantly changing. The key players are sometimes changing. I don’t even have a playbook. I mean, I know from my past experience, how much things are going to cost, what the process is going to be, but the resolution is different every time six months later, we might have to close out an open

Benjamin Sens
Hold on one sec.

Benjamin Sens
Oh, my God, this clears.

Todd Weston
So one thing though, I think that’s important. No matter what happens, any real estate agent has to understand that if you coach your client properly, you can get through these issues much easier. For example, if you find out that There’s a permit open, and it’s going to scare somebody. You don’t need to disclose and pass that information on the day you got it. The day you receive that info, go into action and find out what it is. Whether it be hiring a professional like Ben, or looking at this go to the city yourself and invest Yeah, then you can at least handle it. It’s bringing easing it in. So it’s not such a shock and just say we can fix this because there’s nothing that’s insurmountable.

Benjamin Sens
Correct, Todd and I really

Benjamin Sens
understand that and it helps our viewers understand. So this is an example in Biscayne Park. I’m going to go through these very quickly because we have a limited amount of time that that because you guys have other webinars and and fun things and we will come back Biscayne Park right now. They’re doing the re occupancy inspection. El portal, North Miami, Miami Gardens, Biscayne Park. All of these cities are doing inspections before the transfer of ownership. So A lot of times were brought in for unpermitted work or code violations. This was an investor who was flipping a house in Biscayne Park. And was was found to do the kitchen and bathrooms without a permit wasn’t found while he was doing the work, but during the re occupancy inspection, and there are certain things that we could fix before they go to things. For example, if I need to fix the bed and bath count in Miami Dade County or in Broward, I could go to the property appraiser. We’re seeing more these re occupancy issues in Miami Dade County, but the point is, I could fix these problems before the re occupancy inspector comes out. And once the occupancy inspector comes out, usually that’s a couple days before the closing. I’ve even heard of some title companies and some people forgetting to tell the agent that there’s a real occupancy inspection and then closing on the property with it and having to deal post closing. It’s very important to know what juris does That that you’re working with and and their current policies. Right now, Biscayne Park, for example, they’re using an engineer letter. The city does not want to come in the house or the commercial property. It’s a very it’s called the village of Biscayne Park. It’s a very little jurisdiction el portal, North Miami area, and they’re using an engineer’s letter. So at the end of the day, it’s hold harmless hold harmless hold harmless. Everyone wants you know this, the city does not want a resident or new business owner to come back and say, Why weren’t you guys protecting me when I bought this property? And that’s why we saw probably after 2012 a lot of these municipalities copying each other I used to work for the city of Miami Gardens, and Weston and Lisa So basically, they they copied each other they look to generate revenue. In North Miami, for example. I’ve even seen these guys in so they’d go into three plexes and find a fourth efficiency. But recently, Gary bismack over there and I have several conversations with him. He’s been instructed to look by the building official to look for water heaters, and air conditioners that were done without a permit. So going from looking for more units in a multifamily and making sure the bed and bath count match up on the property appraiser and square footage to looking for something is so simple to go in the system. And oh, wait, service American installed this air conditioned in 2017. We don’t see a permit for it. So we’re going to hold up your occupancy inspection.

Todd Weston
You know, it’s interesting ban, it was back when the re occupancy laws started coming about, particularly in Miami Dade. Where did it get initiated? I was and I still represent one of the larger banking institutions in the reo departments. And what was happening is I was going to magistrate hearing after magistrate hearing, but we were we We’re actually I say fighting the real occupancy because they were using the real occupancy as a sword to be able to get all of the properties in the plant so if it got it was foreclosed upon some a new buyer now would have to have a re occupancy to know what they needed to do to bring it to code and and make an effort. They were actually doing stipulation agreements to include that they would do it afterwards. So even though a pre occupancy was was needed, they would do it post closing. And they was pretty sophisticated agreements. But it was interesting because they, they were doing it for revenue, they were doing it to bring things compliance, and they were taking advantage of the foreclosure arena to do so.

Benjamin Sens
And it was very interesting for me, you know, working in Miami Gardens, which is 20 square miles of unincorporated Miami Dade County. When we talk about unincorporated, this, these areas were neglected. So now the city’s incorporate and they’re looking to bring things into compliance. Now that brings me into another topic, which was pretty interesting. In Pompano for example, going back to Pompano. We’re dealing with a whole street of properties for an investor where every property has four units in it, but it’s only zoned to have two units city came in three years ago, decides, hey, we’re going to start enforcing these things. Hey, there’s trucks, there’s not adequate parking that people are parking in the swale, you know, what do we do about those things? Todd?

Todd Weston
Those are the kind of things that actually I’m working on a case now, which I can’t go into to any great extent. But the city is recognizing they’re selectively enforcing things even though they have the right to. And as a result of that, I think we have a good battleground there to to win, and that’s going to take a little time. I can’t go into it much more than that, other than tell you that yes, the municipalities are doing that. Their cancer, they’re coming up with creative ways to come up with more revenues and more enforcement. And in some cases, they feel that that particular area in their world is blighted and it could be the most expensive house in town but they look at every $2 million house has got a fence that was put in incorrectly and we’re gonna press them

Benjamin Sens
but but but these people What I don’t understand is these people brought bought the property 10 years ago, it says four units on BCP a, the zoning matches in the overlay on the pictometry which if you guys and again, one thing that I want to encourage you guys to do is do zoning verifications for your client, contact them municipalities. Let’s hear thing from the horse’s mouth and we’re going to go over a little bit later of an example. An example how an agent did a miss zoning verification, put it on the MLS ended up in litigation. This is an A I’m still admitting people here. That’s why I keep looking back. I admit I’m admitting people and I am preoccupied with re occupancy inspections. But so anyway, this is in West Park, this is a roof. This this cellar we had Todd was incarcerated 2012 put on a shingle roof City of West Park, another one of those newly incorporated areas in Broward County decides, hey, we have a multi family here. We have an open roof permit. They haven’t gotten a roof permit in 180 days, we’re going to put a lien on the property to get the oh no actually this was a code violation that didn’t turn into a lien, so they didn’t yet record a lien. But we still needed to get the roofing permitted after the fact to bring the property into compliance. And so, this baby here they let us close out with an engineer letter. I’m going to use my little drawing tool right here, which I’m starting to I need to take a zoom class. I’m gonna use my little trick drawing tool here. So these things I’m circling, they’re the tin caps in the hot. So a roof has about four layers of inspection, whether shingle or tile, and the tin caps hold on the paper, which are strapped to the wood. And so throughout a roofing inspection throughout a roofing permit, there’s several inspections. This as we go to permit things after the fact. The city asks us like they’re doing in Pembroke Pines right now close by to open up to areas three by three and take a look. If the roof is so old, the building official might just say, hey, apply for a New Roofing permanent, this roof doesn’t have a lot of life left in it. But we always look to solve things with a $3,000 solution instead of a $12,000 solution. In this situation, the seller was incarcerated and the real estate agent came to us and they really didn’t have no one had the means to close this out. So you know, we were able to help people out and work on the settlement statement on the closing statement and get this done. To the closing, but these roof permits are very difficult. Something that’s also really difficult is when people do bathroom renovations without a permit, and they cover the tile. So basically, we have a situation right now over in aventura, where they renovated an entire bathroom. And we have to permit that after the fact. And the city inspector takes off the little cap, the little metal cap over the shower, takes a peek in where the tiles cut and says there’s drywall behind here. There’s not do rock behind there. So the second he sees that he or she sees that, then they go and say, Did this guy even install shower pan? Or aligner? Is there going to be leaking into the unit below causing the association in the residence, million dollars in litigation? So sometimes we’re able to bring things into compliance.

Todd Weston
And that that ban is a perfect example of that when you’re working with with these different contracts is to make sure you think about what is unpermitted and how valuable that word is to whomever the buyer or the seller. So you have a buyer who looks around and says what a beautiful new bathroom. I want this and it had doesn’t you find out there was no permit pool. So now Ben is begin to explain how crucial it is that if the permit is now up to the buyer after closing, because a lot of buyers will say, there’s no there’s no code violation yet. No one knows about it. No one’s even taking a look at it. I’m gonna enjoy my new bathroom, and then find out after the fact when they go to get a new kitchen put in the inspector wanders along and sees the new bathroom and says, gee, I don’t remember seeing a permit pool for that initial out. So that’s where you you coach your client.

Benjamin Sens
Perfect and also coaching clients Todd. I’ve had agents who have pulled municipal lien searches. And the first thing I started to do after I left the city and started Getting to real estate. And now I just educate realtors on open permits and code violations is to find out these deficiencies early. We’ve trained agents on how to explain to their client the importance of a municipal lien search for months before you get to the closing table. So you have time, and you can satisfy these things earlier. And when the agents trained correctly, they could explain to their clients the importance, they could have their client pay for the municipal lien search, they could pay for the municipal lien search and get reimbursed on the HUD. It does have to get updated the 30 days before the closing. But I still going back I started telling agents go on the city’s website and do what we call a pencil search. But again, we’ll go through the components of a municipal lien search and we’re going to find out why going on the municipal website is a piece meaning that when I was processing a stoffels for the city of Weston, back in 2009 to 2012 at 90 a day at $300 250 apiece in the building department. They had three layers behind the city’s website. So number one, they had what is on Inc force, which is their municipal permitting system. And then they had a set of data every five, six years, these cities, like our state’s unemployment, I don’t want to go there, but they change the systems that they use. So they don’t transfer information, the data into the new software system, Santiago, can you call Renee and let her ask her if we can have another 20 or 30 minutes if these guys want, I want to see some more of their faces. Can you just call her or ask her if we should table it to something else this week? We’ll do this. We have a lot of it I I like where we’re going here and if everyone agrees and so yeah, so agents understanding the importance of a municipal lien search and the way that we’re dealing with these things is very important and to protect a commission It’s a small drop in the bucket. I mean, you’re gonna protect 10 or $15,000 and put $250 behind it. For, you know, looking at an agent’s perspective, I mean, that’s something I would definitely consider. Or if you understand the process or would like to communicate with Todd or I, we can explain the importance of that, depending on the municipality to your clients. Todd.

Todd Weston
Agreed.

Benjamin Sens
Oh, man,

Todd Weston
I spoke too much. Now you’re, you’ve covered it. Well, thank you entirely up to, I think, again, the case by case relationships with the the listing agent. And sometimes a buyer’s agent is I am the last person that ever asked anyone to put money on the table. I don’t think you need to I think that if you go agent

Benjamin Sens
shouldn’t invest money in other people’s properties. They’re performing a service. They’re getting the seller, the highest and best are representing the buyer. And no I so that’s it. That’s, that’s, that’s very critical for me. I mean, I could see if an agent wants to, you know, help a client paint a wall or go that extra mile to market their property or, or help help make it show better. But one thing that I get caught up a lot that I get caught up with a lot that my whole family’s in real estate and it it leaves me with it kind of gets me emotional because when these things are found out, and they’re not done proactively, it’s outside the inspection period, the seller the seller has already gotten beat up once already during the inspection period, you get the lien search back. Now the agents now the sellers agent or the title company, whoever you use runs over to the seller, the seller tries to contact the previous contractor, even if they are in business they can’t contact and then I see the agents running around and the agents getting entangled and involved Things that put their license their brokerage and forget all the in jeopardy. I want you guys to be able to keep your relationship with your clients because use me for the code compliance stuff and valuation. Don’t get caught up telling your clients something.

Todd Weston
Yeah, Ben, it’s interesting you brought up you say you get emotional. The the level of emotion rises beyond that of the dissolution of marriage in a real estate transaction. A lot of agents have had the opportunity to see some of the psychology behind purchase and sellers, purchasers and sellers. And when it comes to fielding the information or fielding and sending it to someone else, in other words, use someone as a cushion. I have no problem being say the bad guy i have i might be very pleasant to everybody and most part, but when it comes to having a fight for the client, there’s a point in time where you know, you say no you say where it’s going to go. You tell them where how it’s going to be. And you sometimes have to tell them the news they don’t want to hear and when do that if you need to cushion use the cushion to do it because your job is obviously to sell but you’ve got them in that relationship solid to you well use the others but also use the professionals that you have at your at your disposal to deliver that message you mean

Benjamin Sens
and and and and again hold on I was trying to meet Santiago will say anyway as as a as real estate professionals and people who help all of you board members out with with with resources all the time again, we want you to, to use to utilize us as professionals. I’ve seen a lot of I again, I get lean searches all day from sellers and the sellers are getting that from their title companies. And something I see you know, Todd’s an attorney owned and operated even I’ve seen you know, a great boutique title company but I’ve seen In some of these title companies, or marketing companies like I call them, and how they handle files, and how they present problems to their agent. So you could do, you could do one or two things. You could present people with a problem. And then you could present people with a problem and a resolution or solution. And even outside permitting and code violations, that’s something you know, Todd has mentored. I mean, I’ve watched him throughout his career, and that’s something that he’s performed for, for agents. And and what I like is, is that

Todd Weston
the board has an incredible resource of 700 plus affiliates, phenomenal. You just make sure who you work with knows what they’re doing. Obviously, we’re out, making every effort to make sure that you reach those people the right way. And the information that you’re you’re attaining in this seminar, is to understand what you need to know is the basic Be able to bring it to your title company lawyers.

Benjamin Sens
Hey, Todd, I’m sorry, Santiago. What did Jessica and Renee say? You can extend for an hour. It’s just up to you guys. Okay. All right, perfect. Well, we will see how far everyone wants to go. Thank you. Thank you, Santiago. I’m sorry, Todd, I interrupted you.

Todd Weston
Oh, the importance is that when whoever you use and and and most that are out there that are open and working and so forth, you’ve got some hard work because you agents know who your good people aren’t have worked with if you don’t have them, explore opportunities, but make sure that when you get an inspection done, that you tried to get that lien search with permits done during the inspection period. And if you need to extend the inspection period, one of the crucial things is is to make sure that how you write that addendum is crucial to what the result is going to be what you intend. Example, if you say that the inspection peril will will extend Until, say 10 days, and your 10 days expires, you could if the if the buyer is seller is saying no the inspections done, but you have not received your lien search back particularly now with a lot of these municipalities just starting to reopen, and some of them are skeleton crews. So they’re taking longer, it may take 30 days to get a lien search. So all you need to do is put in that the parties agree that the municipal lien search and inspection permit report shall be that time period itself or alone will be extended for another 30 days, not extending the inspection period as a whole. So if you begin to isolate things, but you also very specific in particular, you can avoid a lot of the issues. I’ll give you just a quick example. We had one where there was a screen windows that would not open and close and they were opening part of the way but then they would fall down if they were put up all the way. So they had a repair person it said they would either either repair or replace Now the word repair or replace, well, whose option is that? The buyer could come in and say I want them replaced. The seller says, Oh no, I want to repair. Well, you have to put in specifics maybe that replace per the, the the final inspection or and, or and or upon final inspection and comments or reviews or whatever it may be with respect to that, that that professional that fixed the window. So if it says that it’s to the satisfaction of the professional, you have to get to a point in time, where you have to decide is that going to be replaced? Or is it going to be repaired? And in holds true in any of the way you you put any of the wording in these contracts? Be very careful that what you’re extending or what you’re doing. For instance, they say that we’ll close the roof permit. Well, closing a roof permit you could run down to the municipality today and close it is never been inspected. It’s never been final. It’s never been done and you just closed it out. So does that I mean, it’s been funneled, does that mean it’s been approved? No, not just using the word close. So be very careful, I always get a kick out of the fact that an agent will put in subject to appraisal. Well, they go out and get an appraisal comes in at $20,000 less. Well, there you have it, it’s subject to the appraisal, but did it say subject to the appraisal at the market value or the purchase or sale price or something. So you just have to be careful or

Benjamin Sens
like, like so something typically that we we told people to write and I know you have your own language, but like for the open permits, if you represent the buyer, the seller shall close permits. We have to add in there or code violations and liens prior to closing at own expense. So things aren’t left written where you’re going to be in an escrow dispute.

Todd Weston
Exactly. And when we go into get into the code violations, we’re going to go a little bit into the word fines. Remind me if I don’t, I’m gonna make a note but I’ll give you a little story there which is extremely valuable

Benjamin Sens
Tom I know you have a couple closings this afternoon in the office. Do you have time if we go until maybe 1230 1230 it’s actually already 12 o’clock and it’s 1155 and I want to make sure that you’re comfortable and our viewers are comfortable.

Todd Weston
I’m I’m fine at 1230 everybody else’s by all means. Okay?

Benjamin Sens
Perfect.

Benjamin Sens
So this is a this is an interesting example of in Pompano we’re kind of picking on Pompano today, but you know that they turn in tree permits and landscapers and arborist and but again this was a situation where Todd and I found that the buyer and seller the buyer was an investor. The seller was a married couple who was splitting up with financial problems, service America Toad or one of those big companies. They came and installed an air condition. Now this picture isn’t of an air condition. This picture is of 100 Water Heater sitting right next to it was an air condition. So, again agent called me from Kai’s excellent agent the Coral Springs office tells me Hey, you know what? I’m very interested here and calling the city of Pompano out to close out the air conditioned permit. I said, Wait, no, you can do that. But before you do that, let’s let’s inspect the property. So inspectors aren’t stupid to the right or left of the air condition. This was to the right attached to an illegal structure where the roof to wall attachment and everything is kind of funny. I’ll show you hold on.

Todd Weston
Yeah, it’s a perfect example of opening up the can of worms.

Benjamin Sens
Yeah

Todd Weston
Unintentionally.

Benjamin Sens
And, and again, this was a very simple situation where we were the the buyer, who was an investor was gutting the property. Anyway, so he was pulled he or she was pulling property permits for everything. So instead of calling the city out there and doing a change of contract or on the air condition permit, we went ahead and credited the buyer 1500 1500 or $2,000. And we called it a deal again, keeping the transaction together. So we need to make sure that when we initiate close outs when we do certain things, invite other people on on these properties, we need to make sure that everything else is in compliance and evaluate each situation.

Todd Weston
So one thing that I think is important is as agents do not be so quick to offer because I’ve had several occasions where and if you haven’t a chance to use some liaison doesn’t matter if it’s your title person, obviously. So what’s considered practicing law versus not you have to be crucial careful as to not have someone practice on their own As long

Benjamin Sens
as and Todd you know, all the time I see the agent gets sucked in because it’s last minute and they have worked so hard and marketed the property and they they’re the ones who have the first relationship you know, so we don’t want to see you we don’t want to see the listing agent in this example. We don’t you know, have the Pompano house. We don’t want to see the listing agent call the city of Pompano and lose their relationship with the seller or turn a marketable listed property into a piece of garbage in something that they can’t do anything with because the sellers don’t have the resources. Once the city sees all that stuff,

Todd Weston
yes, but further and where I was heading at is that many agents that are even seasoned and I’ve had 20 year season agents saying I offered them 1500 dollars to get it done so I can get the deal closed. I understand that. I appreciate the fact that they’re willing to step up and do so. But don’t do it so quickly. I’ve been in a situation We’re I’ve stepped in and I’ve spoken to the buyer or the seller and I’ve communicated to them that and negotiation skills you can get to the point where they’re willing to put something into it finding out that the agent then finds out they did not have to put something into it and the one thing is you work way too hard for your commission there’s no reason to give up to ship so quickly so give that some thought when you’re having these when you’re

Benjamin Sens
good Yeah, you use your you know, use your Education The board’s provided us your tools and and and your resources. And of course, like you guys are doing today proactively. It’s very important to attend these calls and webinars and know your tools and resources before you need them. Because what I can tell you about having five electricians is if I had two electricians, when I needed an electrician, I’d have a problem. So here we have in Miramar, something that’s really important here. This is a residential screen enclosure. This is A 1996 gL home that was built in silver lakes, the builder. Usually what they do outside new construction is they put the pool and the screen enclosure and the slab on a separate permit, because they want to see oh the house, they want to sell the house, they want a certificate of occupancy. And they don’t know if the prospective buyer might want the add on or whatever. So they like to keep things nice and flexible with elevations and additions and things like that. So this is a property on a lake with a pool that went through three changes of ownerships and three sales with Absolutely. And this permit stayed open. It went through hurricanes, that little column that you’ll see in the middle. Hold on one sec. That little column that you see in the middle that’s holding up the screen enclosure. You can’t modify a structure that Electric Hold on, I have some more people joining, hold on. Perfect. Okay. So, what we have here is you can like I said you can’t modify a structure you can attach electric to a structure those lights on the top which are really interesting. They’re not done to weatherproof, you invite your niece or nephew or cousin over a family member. That screen enclosure the white metal railing becomes electrified and it is the current is traveling throughout. So very, very interesting. Again, while we went ahead and moved the fan, and all the electric, this was a situation where we had to credit the buyer money to build a new screen enclosure or get the deal to the table. This was another situation that we simply could not permit and didn’t bring through the permitting process. Because of how much modification in the existing condition of the structure,

Todd Weston
I mean, think of the worst case scenario that they’d have to tear out the structure. And so if you have a buyer, and they said, Well, we do not find it as being permitted. Well, that might be okay. Because you can still have the use of it until that day comes and that day could be many, many, many years away.

Benjamin Sens
Okay, um,

Benjamin Sens
you switch to this, get this thing off. I’m gonna stop drawing here. I’m not good at it.

Benjamin Sens
It’s annoying me now. Hold on, let me I’m gonna stop drawing.

Benjamin Sens
clear, clear all drawings.

Todd Weston
That’s where you have to take lemons and tournament and lemonade. You do have a little happy eyes in

Benjamin Sens
the correct correct. So here’s the situation in Boca Raton. This is a $1.5 million house in old floresta. There was an open generator permit generators involved plumbing and gas and landscaping because some of the city’s not only building code, we touch on zoning code zoning as parking, landscaping. There are other things that every city has the ability to regulate. So the zoning code, how much can you build to the air conditioners need to get screened on the roof. We’ve had a bunch of situations in Coral Springs where they want to look like Weston, and they want the fences and everything to be lined with, with pota carpets and hedges and all the mechanical equipment to be screened. So again, it’s very important to know where you’re going, but in this particular situation, we did close out this generator. It was installed by Don Hellman generators and they installed it back in 2005, or six owner was deceased kids have kids were selling the property. And again, it took 1015 days to bring this into compliance, to do the change of contractors to do the permit renewals to facilitate all the inspections From plumbing, electrical, the fire marshal zoning to get this through the process. So I just use this as an example, when you’re involving multiple trades. And simply, in this situation if you could see the the pad on the generator, the concrete pad it’s sitting on. So this contractor, they didn’t call for final inspection because they didn’t use the pad that they said they were going to use on the approved plans. So sometimes we see a deviation from the approved plans. And that’s why the contractor never calls for final and tells the resident that the permits closed and wants to get paid and final. And it leads me to another legal thing. Making sure that you terminate notice of commencements prior to final payment, and making sure that you receive your final municipal inspection. Todd, you got anything to say about that?

Todd Weston
Kind of interesting I wasn’t too long ago or I had a permanent needs to be closed out and installation being completed. And I was very specific. Initially the the drafting was of this cell called the escrow agreement, that payment would be paid upon completion of the job, and not necessarily in those terms. But the most important part is the payment will be made upon completion of the job and have a termination notice commencement and a closeout of contractors affidavit and a release of lien. So unless you have all of that, it’s it’s a title issue, which is going to crop up later. So if you do not address it properly, and you think you have that’s that’s the legal part.

Benjamin Sens
So that’s on title examination, like and I asked you this question, because we have to record as contractors in South Florida and I’m sure most other places, we have to record a notice of commencement for permits issued over 2020 $500 I think the amount is, so the contractor needs to record a notice To commencement signed with the owner, I know that has to do with lien law and leaning rights and all those things. But in for example, in this situation with the with the the gas generator, I remember specifically having to go to Delray Beach because it’s a satellite for Palm Beach County, clerk of court to record to so I had to file a notice of commencement and a notice of termination within 10 business days, right before the closing. right because that because the the underwriter wanted what was happening there.

Todd Weston
So what happened is that obviously it could be potentially a claim because if it’s not, if it’s not done properly, then it just comes back on them even though the permit may have been pulled properly and everything else. So it’s a matter of protecting. It protects the public and it protects the the contractors and the subcontractors. It’s more of letting everybody know that there’s a claim potentially and work being done because remember, what you may not know for the Most of the agents and you may very well but there is a general 90 day rule on a mechanic’s lien and a mechanic’s lien says that anyone that has done work on a property has the right to get paid. And if it’s done within the last 90 days, nothing really needs

Benjamin Sens
and and that and from what I know in my limited contractor manual, my training the, the lien the lien. It has to be for First of all, what the lien is, is it’s the contractors right to record against the property if they’re not paid or any of the suppliers that they have aren’t paid. So we had an example we were talking about. Paulina Hurtado is a good friend of mine from na Rep. She’s also on your board of governors for the board. She’s phenomenal. And she brought together everyone. This was about five months ago, we were on the news, Todd and parkwood pools, they left pools coming out of the ground holes. They failed to complete Their project, the financial risk, there was a general contractor, pool contractor and a financial responsible officer for the country. And Romania lived in aventura, and he went miaa and it became a federal case. But the bottom line is the example I want to point to the realtors and the real estate professionals who our board of directors and all sorts of property management capacities is that parkwood subcontractors and suppliers placed liens against Paulina when parkwood pools didn’t pay them, and she paid parkwood pools, and then her homeowners association, which is another entity started to cite her for work that wasn’t in compliance with their rules and regulations as a

Todd Weston
hazard. There’s so many different issues that come up here. And of course, you always want to know who the contractors are, who the subcontractors are who the independent contractors because they all need to get paid and they have have every right to do the 90 day mechanic’s lien in a sense, but what’s somewhat protective is is that in order to gain any opportunity there, you have to file the notice of commencement, which is why it’s crucial to them. However, some of the mechanic’s lien laws kind of over over supersede that, to the extent that a handyman does some work. Let’s just say it’s, you know, for the sake of discussion, that it’s a legal handyman, and has contractor license and does the work and they’re entitled to be paid. So you want to know what’s been done on the property. And particularly when you’re a buyer. You want to know what what mechanic’s liens may just almost be self imposed by the mere fact that work was done on the property that didn’t have did not have a notice of commencement.

Benjamin Sens
And Todd, everyone’s doing refinancing right now. And those are like closings. Basically, you have to examine the title, right?

Todd Weston
Yes. And we don’t do a lien search, and you don’t do it. In many cases. The underwriters remember the they were giving a little leeway. They’ve done that over the refund.

Benjamin Sens
I’ve gotten four calls in the past month from past clients. And again, it was never something that I was instructed to do to file a notice of termination. But and I finished the job and the client was happy with the job. But I got calls from the title companies who are nationwide title companies who are processing these reifies Hey Ben, and they reached out to me as the contractor of record and they said, Hey, we need to record this notice of termination right now. And it was probably last minute.

Todd Weston
Yes, I mean, there’s a lot that are found out and they want to get it clear because it just, it just makes it cleaner. And eventually after a year notice commencement expires on its face, so it’s not so bad but it could be something within that timeframe.

Todd Weston
It when you can

Benjamin Sens
the in something that is never really discussed with agents which I want agents to know this is every underwriter has different requirements. So for example, there might be one underwriter who has a requirement that can’t issue title insurance on a file and and so it’s really important to know what title company you’re using and that they have a couple underwriters, right?

Todd Weston
It’s not just

Benjamin Sens
that they could close the file.

Todd Weston
Some of the underwriters are a little bit more lenient and flexible, however, you have to understand it. Because example I can call up and I can argue a point and just say from a legal position, you’re wrong and the underwriter who wrote it the title examiner is someone who knows how to review title and review. I was kind of examiner still am from it, you know, since day one, and I understand title well, but if I can argue it successfully, I can sometimes get the underwriter to delete that requirement. The problem is, is that then you you gauge on its worth insurable versus marketable. So now all of a sudden, the next the listing agent takes it and they’re the ones that sold the property to the buyer. President owner seller sells it or about two. And it turns out that there’s a an issue on the title with regards to one of the arguments that say I did a couple years ago, then all of a sudden new buyers attorney or new buyers title company may not agree and we’ve got to re argue it. So sometimes you do not want to just let it go get by sometimes you should resolve the problem then because it becomes a marketable title issue, not just insurable

Benjamin Sens
and then that becomes a future issue for the person who you’re conveying the property to.

Todd Weston
Exactly

Benjamin Sens
because we always get contacted a Hey, I bought the property you know, sometimes these by these title companies just to get things by the buyer and the seller they have them signed these hold harmless is and hold harmless is and hold harmless is when they’re trying to push something through right or they are or they’re limited in their option or they’re not an attorney, and they can’t argue or they can’t understand. Why something, you know?

Todd Weston
Well, a lot of them have a code issue that did not incur fines as of yet. So you have a code issue that looks like it’s easily correctable. And then they find out that it’s not so easily correctable and they have to go through some work. And so when they go to sell the property, what they may have agreed to to be indemnify the title company or closing agent, whoever did at the time and everybody else, they now cannot sell it, they have to go back to day one as if it if it was never corrected or signed off for and fix it.

Benjamin Sens
And you you you fix some of those things, right?

Todd Weston
Like so for daily job as I call that’s what we do as lawyers. Yes.

Benjamin Sens
So you you have to fix recorded instruments and other documents that weren’t recorded properly.

Todd Weston
Yeah, we have to go back and not have to reinvent but completely go back from day one, and, and do corrective instruments. Well, it’s

Benjamin Sens
like it’s it’s like reengineering or permitting after The fact you’re going back, you’re bringing something into compliance. So you could get an A, so you could get a new policy issued and get to these agents to a closing.

Todd Weston
Right? Yeah, it’s exactly that it’s same as if you go in on that roof. And you’re now able to see that the roof was done correctly. And we’ve now established it, we’ve set a history, we’ve we’ve given it some documented evidence, and now we can proceed forward. And that’s what we do as as you know, title company lawyers to get the job done for it. And it happens so many times in these code issues, because just because there’s a code issue that now is this is accruing fines, it doesn’t mean that the code issue itself was repaired to correct it, and they’re left over. And so sometimes, even though the fines may stop, because the municipality says there’s sort of a maximum, we know that if you left an abandoned car, in the swale for, for two years, that and you remove the car, you know, yes, you’ve corrected it, but you still So you have to go back and make

Benjamin Sens
sure basically the property’s in compliance, we’ve seen properties that have been brought into compliance, but they still have the lien and the lien hasn’t been mitigated and it hasn’t been gone through that process. And

Todd Weston
yes, and actually just go into one other area unless you’re sure you’re going to address the, the the lien, code enforcement, fines and so forth. Or show could address that now. Oh, dressing now, though, what happens is, is that a code issue comes up, they do a recorded order, and now it accrues, let’s say $500 a day. And let’s just say there’s a maximum fine, or they came to the particular time they’ve come to put an order out that says that it’s now $6,500. And maybe the fines do not occur. Now, that buyer, let’s just say it’s your house, and you sold it to somebody with that code issue. Then you have two more properties. Those prop that same code issue known as it’s under the statute, 162 10, if I remember is the code lien section, which includes what we call spider liens or SR liens or bleeding liens, and these liens attached it everything you as an owner own, even though you’ve now sold the property that had the issue. Wow. Because you haven’t paid the fines yet

Benjamin Sens
there is nasty as their name.

Todd Weston
They’re they’re pretty bad. So therefore when you have that fine issue and you say that the code code issue will be corrected, if you say the code violation will be issue will be corrected. It doesn’t correct the fact that the fines that been owed has never been paid. And it now attaches to that property and on and on and on. So when you work on these contracts, the mere fact that you put in and limited only to code violations will be corrected. You need to say code violations and the fines will be paid in full. Because if you forget that that issue that we just spoke about will haunt forever.

Benjamin Sens
So coda is so again, you know, Todd sits on your educational committee, what I’m going to do is I have all your contact information. And we’ll we’ll share some documents with the group after this, that they can start using and instituting in their real estate practice to protect their buyers and sellers. Todd, I’m so glad you’re here today, just another legal situation. This was an example of a property over in North Miami near the golden glades exchange that, again, the agent didn’t know if they were working with North Miami Beach or unincorporated Miami Dade County. To be really short, they made an a zoning representation on the MLS that in the brokers remarks that you can have too, you know, you can have up to nine units on here. And, you know, we I called my friend who’s a zoning administrator through Miami Dade County, and we found out really quickly for the buyers that you can only have two units on there, maybe four if you get a variance. So the agent was basing the ROI and the listed price. And misrepresentation to the buyer based off information that excuse me, and I said to the agent, I said, Where did you get this information? They said, Well, I was looking at the neighboring properties. Well, just because something is on, you know, for example, we have one lot here in palm and Deerfield, let’s say we were working on this particular lot is an Rm 15. But it says you can have 15 units per one acre, and the lot is only 15,000 square feet, which is a third of an acre.

Todd Weston
So there could be so many other reasons. I mean, zoning contemplates a lot of different things. They look at the density requirements, they look at the use requirements, they’ll look at just they think at some point, has this been maximized, so we don’t want to build anymore so as much as something states it, it doesn’t necessarily mean it’s correct. And anytime you Look at anything particularly what’s been published, the property appraiser’s office is probably the, the area that people look at more frequently and find that the true owner of the property isn’t who the property appraiser has reported. And that’s okay. It’s not their job to make sure the information is correct on a lot of that it’s a general summary.

Benjamin Sens
Well, no and, and to your point, the cities when the when they get their information on how to serve a property owner, they purge that information from the property appraiser. So for example, if the if someone buys a property, and they have a Registered Agent and attorney like you, or a past mailing address, and they didn’t update that mailing address, and they claim they’re not getting served. That’s their that’s their problem, right?

Todd Weston
Yeah, absolutely. I mean, it’s, it’s, it’s not I mean, ultimately, the person who was supposed to have been served can use the defense as much as they want, but to reverse things is even harder. But when you’re looking at a particular listing MLS or however you begin to look it up, you have to make sure that what’s being stated there who is the author of those remarks. So if you as an agent are going to rely strictly on that, that might put you in some hot water and some issues later. Same thing from a seller that if you’re going to do a listing, is that necessarily listening to what the what the seller told you? You go down to the right way to do it particularly in in multifamily and commercial it’s a lot more. It’s it’s more burden on the buyer and buyer’s counsel than it is listing agent but making misrepresentations is not the not type of reputation you want to have. So you need to go because let’s just presume that you sold this to a buyer. You may be doing both both sides of transaction agent and that buyer now in has believed everything you’ve told them and no independent investigation was done until they’ve already spent thousands of dollars through their inspections. then lo and behold, do they find out that the units that are on there are in violation of some zoning, you’re not going to get a variance. they’ve, they’ve looked at the ROI based on the, and worked out the cap rate and found out that this is the wrong place.

Benjamin Sens
So then so then Moreover, like you were saying, moreover, the buyers going to lose their relationship, the buyers invested a lot of money in the due diligence, where we see commercial agents all the time. Again, you know, they’re they’re used to pulling lean searches, they’re used to finding out these things. Well, in advance, yes, a

Todd Weston
commercial agent tends to do a lot more on the the underlying issues that you’ll potentially then from residential because it’s not required from arrays or something you have to worry about. And there’s a thing in Broward County called the 40 year building inspection, and it was I think it was back in 2005 2006. And they said anything over 40 years has to be fully inspected from an electrical and structural and if it’s not, then it’s the same thing as a preoccupation.

Todd Weston
As you’re having outboard power

Benjamin Sens
we again we posted on our Facebook page recently in Holland Dale AC wall fell in the intercoastal because the engineer doing and we do 40 year research and work with engineers, because the engineer failed to include the seawall on the 40 year report as a common element. So this building, you know, so 40 year research and 10 years thereafter. A lot of commercial buildings, condo associations, you know, any of these buildings it applies to and you need to check with your jurisdiction or municipality. A lot of I work with a lot of Hoa s and boards and condo associations. And some of these contractors they’re going in looking for waterproofing and cement work and window work for themselves, or electrical work that doesn’t need to be done. So these are very sensitive issues that could cost your organizations a lot of money. And headache. We’re going to move forward right here to a commercial property. It was actually on Flagler in the 826. It was down south. This is a one that we did were three things happen during this. During under contract a flood happened in the property. One of the tenants who was buying the unit with an SBA loan called a federal American Disabilities. I don’t want to say ambulance chaser Todd, but this guy who was buying the unit looked for hired an attorney looked for deficiencies during the inspection period. And that attorney filed a federal lawsuit, which they couldn’t get the SBA loan. So that and then the other thing is some of the tenants what was really important here to know for you guys at home. A lot of the tenants were subleasing. This picture shows a rainbow vacuum cleaner, which is a multi level marketing company in a tutoring center, which is in closing their second entrance. So again, Before I got brought into this situation to back up a little because there were some open burglar alarm permits, burglar alarms were electrical permits now they’re wireless and low voltage. But on that door where that room is, there’s a there’s a sensor, there’s a magnetic sensor, but again before I’m working for the seller here and the landlord, and before they go to sell that place before I call the county out, I say we got to tear down that tenant. We got to get rid of that illegal tenant with no business tax receipt, no permits nothing.

Todd Weston
Todd, so I’m having problems with the all of a sudden the screen went blank. So I was trying to fix it.

Benjamin Sens
And it’s okay. It’s okay. So so so yeah, no, so that’s, that’s, I mean, that’s what what we really, you know, do all of the time. And and we work with commercial agents to navigate these issues. But just one thing trigger Another I tell agents that all the time and title companies all the time. Again, when you bring when you bring out the city to close out something, if they have to do a visual inspection, you better make sure it’s in compliance. This is an industrial property. This is something as simple and we know this is a we know this is realtors in the real estate profession where the seller didn’t want the buyer to conduct a due diligence on the soil and contamination. I didn’t seller want that because they knew that the soil was contaminated and they didn’t want it to be documented in governmental and state records. So this is an example of a phase two which is a soil and water groundwater sample. Where if you’re dealing with vacant or industrial land, something really important to bring this complete here is the new owners responsible for any past contamination. This picture, Todd, can you see the picture now again now Yes. Oh perfect. This picture. This is in Davie on burse Road. This picture backs up against Florida Department of Transportation F dot, which is the state they have a lot of attorneys working for them a concrete company to the north to the south, a storage company and a landscaping company. But this was a parcel that the buyer wanted to buy who’s in the oil business, and he wanted to and this was one of the few parcels in the county that would allow for that the town of Davie allowed for outdoor storage of oil containers. So, client brought us to the property to do due diligence seller was resisting us doing testing and simply the buyer got represented properly, the seller was trying to hide some things, and the buyer didn’t end up purchasing the property, but still maintaining their relationship with their commercial agent who found them another property. Um, I just wanted I just want Want to end this presentation quickly? What can happen if you don’t get a municipal lien search that we touched, I wanted to focus on a company that I work with reliable lien search. When I started getting into the permit resolution business. This company allows agents and sellers and whomever to pull municipal lien searches, so you can so lien searches are normally an extension of a title company and a vendor of a title company. But reliable lien search and Brenda arboleda and her team over there in South Florida in Davie. In Cooper city, they they allow agents they’ll take individual searches, whereas Todd orders a bunch of searches for handling all his files. They will they will cater to individual agents, and they’ll pull their municipal lien searches so you can read them. This first page if you’ve ever seen a lien search as a summary page, you want to know if there are any code violations. Now water and taxes are part of it. But for this, for the purposes of this presentation, we’re focusing on permitting and code violations. So, a couple things. This is in Miami Gardens, which is unincorporated dade, which has multi jurisdictions. So not only does it tell you how to who to contact when you have the problem, it tells you the phone number on the bottom of miscellaneous where it’s circled, it tells you sometimes will give resolution information. We worked with Tamika over in the local business tax receipt department. And this is how you resolve this if the resolution is simple. So knowing this information in advance can be very useful and it can save your transaction. This is a printout from the property appraiser. In Miami Dade and Broward has a folio number in Palm Beach. They call it a PC and a parcel control number. All of these things are individual property numbers based off taxing purposes. For this purpose. Note that the folio number begins with a Three 434 means that Miami Gardens was the 34th municipality located in Miami Dade. city of Miami is 01. unincorporated Miami Dade County is three zero. So that first two numbers then the other numbers show when I studied urban planning and worked for the city section township range, how the parcels are plotted out. But again, to for our purposes, it’s really important to know the jurisdiction that the property exists and every jurisdiction to search thereafter. For example, the city of Western where I used to work. Todd Weston will even tell you this, they were unincorporated Broward County.

Benjamin Sens
So, not only did you have to check the city of Weston, you had to check unincorporated dade. Here’s a Miami Dade County example where they had a check they had a special assessment or special taxing district. This is from the city of Milan gardens. This is what an open permit search looks like from the city, the public information that they charge a lot of money for and it takes time to get. But it’s very important for a lien search company to put together this report so you can present it to your client. I do not suggest at all nor will you save much money going to the municipality themself. So let the lien search companies do this and provide reliable and accurate information. This is a property with multi tenants. So again, every single tenant is going to have a folio number. Some of some of the lien searches cost two $300 some of them cost a lot of money in a property where the city is going to charge every office condo unit. Here’s an example of one in Tamarack. So Tamarack we had to check the city of Fort Lauderdale water department for some utilities. We had to check Broward County. So again, all of these things are very important and that they’re ordered in a timely process, and and you can see the amounts that were paid to the municipalities for the lien searches. But the main thing, some of these lien searches could be 4030 pages on residential sides, Todd sent me some that are hundreds of pages. So the main thing that’s really important, I’m going to focus back up here is this page, the summary report that you can identify these problems easy and prompt, we know property taxes can be prorated, and utilities can be paid. But the big important part of this information is the permitting and code violations. And they take a long time to get from the municipalities, and they’re costly. So that’s those are the things that are holding up our transactions that we’re here to educate you about today. So that is a municipal lien search. And what I’m going to do is I’m going to email everyone a copy of this presentation. Todd, do you have anything you want to mention in regards to a lien search, or any experiences that you may have?

Todd Weston
One of the one of the biggest concerns that we’ve seen is if you have any incomplete work that you want completed, and you come up with an escrow agreement, be real clear. And make sure whoever’s drafting the escrow agreement speaks to what is being done, or what’s going to be done or what happens afterwards. And an example is $22,000. And this is I represent a couple other title companies as well. So I, I come and play with a lot of opportunity to to resolve. And one in particular, which I found was just not thinking it out clear enough or far enough out is that it was a $22,000 window. Installation, it was incomplete. The work was in process, and so they agreed to keep the 22 to release the 11,000 to the contractor right away, and the balance of 11,000 would be paid upon completion. The escrow agreement is merely said once complete contract against money contract it says I have a bill of 11,000 Please pay me the title company gave the 10,000 11,000 did not get in obtain the contract of release, or the contractors affidavit or anything like that. So now when asked the contractor said, Yes, thank you for the 11, the $20,000 covered part of it, but we had an additional 20 $500 with the expense to be able to repair the part of the windows where we remove them, and that’s the buyers responsibility. Of course, the obligation was that the seller pay for that that installation. But because the contract escrow agreement was not properly drafted, the buyer is now upset at their agent upset at that title company because they released the money without getting the satisfactions. It turns out that this was about a year ago. So we held it off and fought it for him and it turned out that the note accounts and everything else expired in that year period. So now it’s a moot point. That’s the only had they tried to refinance or sell it in that time period, it would have been a major issue. So these are the kind of reasons that properly drafted instruments from the Genesis escrow agreements or anything are crucial that the eyes on it understand what’s going on.

Benjamin Sens
You guys are like that. And you know, we talk about stories and situations, you guys are like botched, like that show on TV with a plastic surgeon who corrects the other local plastic surgeon, you know, because it’s, you know, you know, you guys are fixing and solving and filing solutions to these things sometimes brought in, you know, after the fact, you know,

Todd Weston
yes, but is it although there’s always going to be an issue. Again, thinking it out, resolves a lot prior to

Benjamin Sens
thinking it out. So that those are those are really good tips and recommendations. Todd, what I’m going to provide for you to all of our viewers, and we usually do these classes in person And I’m going to provide Todd’s contact. Here’s Todd Weston’s contact from coastal title. Again, excellent owner, operator attorney. Todd, thank you so much for joining us today. We’ve, Todd, you know, we did this class exclusively for the board exclusively for the, you know, the board that you serve on the educational committee, and your leadership at the board allowed us so I really thank you. And throughout this class, we’ve had over 45, strong streaming attendees. And then maybe what we’re going to do as part of this class, we’re going to chop up into segments so other people can see it who aren’t tuning in live right now.

Todd Weston
I think that any comments we can get I also sit on the Professional Development Committee for the board. So these educational seminars and whatnot are important to us in response and, and constructive criticism so we can make sure we bring you the best for the agents, the most updated and also real life If circumstances and Ben, I thank you for the

Benjamin Sens
and guys. And I know a lot of people also tuned in yesterday, because there was a mistake put out and we thought the webinar but thank you so much for continuing to join us, I want to give you two other pieces of contact information before we leave. This is reliable lien search, they’re an excellent and phenomenal lien search company. And if you want to pull a municipal lien search, you can contact them and they will make sure that the right information gets found timely and accurate. Or you can work with your title company to do that someone like Todd handles this great, exactly the same way. So either way you have the resource for you. We want to empower everyone by giving them information information during these times. Again, we do not want to see a contract that extended someone to lose a rate lock someone to have to have an underwriting issue and get another lien search or another Hoa stopple. So it’s very efficient. Aren’t these things are done the first time and here’s my contact. Again, my name is Ben boss construction. Thank you everyone for tuning in. And sticking with us. I know it’s 1237 I handled municipal permitting and code violations. I assist Real Estate Attorneys like Todd and title companies. And I help real estate professionals and I do a lot of education with the boards. I like to share our experience with you. If you can please Like our Facebook page, Boss construction group. I have Santiago here listening we’re going to rip the audio and put this on podcast and all the different other forums. And again, mostly I want to give people the access to the information. Not many people do what we do because outcomes. First of all you need to under have an understanding of real estate and the hardship sellers face. So I am a licensed general contractor. But first off I’m looking for the transaction I’m looking for the solution. I’m an owner’s representative. So I’m looking, I’m looking to protect your clients. I’m looking to save your transaction. So please, you can tune into any of our live information like us on Facebook and YouTube and we’re going to post this on on multiple forums. So you have Todd’s information from reliable Thank you, Todd for being here today. Thank you reliable lien search. Thank you, Santiago and everyone for listening in this last picture. I’m not a big sports fan. But again, we want to make sure that the transaction is protected. And by doing by using professionals like Todd and I, by staying close to your board, by knowing what’s going on in your municipalities. You will be able to

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