Posts Tagged ‘contractors’

Bills That Property Owners And Insurers Should Watch This Legislative Session

Several proposed acts working their way through the Florida House and Senate will impact property owners and professionals working in the real estate industry.

The measures fight abuse of the legal and insurance system and protect property owners. Here’s a rundown of the most important bills and where they stood one month before the legislature is scheduled to adjourn:

House Bill 483 and Companion Senate Bill 398 To Cap Fees Charged By Community Associations For Estoppel Certificates

Florida law now allows condominium and homeowners associations to charge a “reasonable” fee to prepare an estoppel certificate, which is essentially a payoff letter. Some association management companies have turned this administrative task into a lucrative revenue stream, charging as much as $1,000 for what amounts to 10 to 15 minutes of clerical work.

The related bills would cap these estoppel fees. The House bill that was approved by the Careers & Competition Subcommittee on March 21 reads in part, “… association or its authorized agent may charge a reasonable fee for the preparation and delivery of the estoppel certificate, which may not exceed $250 if, on the date the certificate is issued, no delinquent amounts are owed to the association for the applicable unit.”

The House bill went to the judiciary committee while the Senate bill was scheduled for a third reading by the full chamber.

Senate Bill 704 and Related House Bill 463 To Reduce Sales Tax On Business Rents From Current 6 Percent Applied To All Sales

Business rents create a financial burden on any business that leases space. Municipalities and local governments may levy additional taxes. Consequently, businesses in many counties are paying up to an 8-percent sales tax rate on their business rent.

Lowering the rent tax will provide Florida businesses with the capital to expand, hire more employees, improve benefits and raise salaries. The Senate measure reads in part, “Separately itemized charges for ad valorem taxes paid to the lessor or the licensor, or to any other person if itemized and not taxed, are not subject to tax under this section.”

The Senate bill was in the appropriations subcommittee on finance and tax in late March, and the House bill was referred to the appropriations, and ways and means committees.

Senate Joint Resolution 76 and Accompanying House Resolution 21 To Extend Permanent Property Tax Cap On Second Homes and Commercial Property

A constitutional amendment created a 10 percent cap on the annual increase of property taxes for all nonhomestead properties. This cap helps make sure that businesses don’t get hit with property tax bill increases they can’t cover. It also keeps the cost of owning a second home from skyrocketing, and ensures that renters don’t see huge increases in their monthly rent as lessors scramble to cover their higher expenses.

The cap is set to expire on Jan. 1, 2019. The resolutions put the constitutional amendment back in front of voters for renewal during the 2018 general election. The Senate bill is in the appropriations committee. The House bill passed and was sent to the Senate.

Senate Bill 1038 and House Bill 1421 To Reform How Homeowners Assign Insurance Benefits To Contractors or Other Companies Repairing Property

Under current law, a homeowner can authorize a company to work directly with the insurance company and collect the homeowner’s insurance benefits.

Abuse of that agreement with respect to water and roofing claims have led to a significant increase in both the frequency and severity of insurance claims, particularly in South Florida. A number of insurance companies are requesting significant rate increases.

The measures would take steps to reduce fraud and abuse. It sets forth a long list of requirements for assignment of benefits, including that the assignment agreement contains a written, itemized, per-unit cost estimate of the work to be performed by the assignee or transferee and shifts the burden in any proceeding or suit to the party seeking benefits, rights or proceeds from the insurer to demonstrate that the insurer was not prejudiced.

The Senate bill is in the banking and insurance committee and the House measure is in the commerce committee.

House/Senate Bill 285 To Mandate Septic Tank Inspections As Part Of Real Estate Sales In Impacted Areas

The requirement would apply to areas the Department of Environmental Protection has designated as impaired waterways. That would cover about one-third of Florida, including residences around Big Lagoon, the Everglades, Lake Okeechobee, and the St. Lucie, St. Johns and Calosahatchee rivers. The rationale is that home buyers and sellers pay for termite and roof inspections, so ensuring a septic system is functioning properly and not polluting nearby water bodies makes sense.

Two property-related subcommittees in the House approved the bill and sent it to the commerce committee. The Senate has yet to take up the measure.


Source: DBR

Builders Risk Insurance: 8 Things You Need To Know

Coverage for insureds with construction exposures beyond the limited parameters of a standard commercial property form is accomplished through the use of the simplified language builders risk form and endorsements.

The policy may be used to cover the interest of the building owner, the contractor, or both, as their interests may appear.

Here are eight important facts about builders risk insurance that contractors, building owners, agents and brokers should know.

1. Builders risk coverage is written for a minimum one-year term to cover a new building or structure under construction or an existing structure undergoing additions, alterations or repairs.

2. The rules in the Insurance Services Office’s (ISO) Commercial Lines Manual state that policy inception should begin no later than the date that construction “starts above the level of the lowest basement floor” or, if there is no basement, the date construction begins.

3. The rules permit pro rata cancellation when construction is completed, whether insurance on the completed structure is rewritten in the same company or companies or not. If the policy is cancelled before the structure is completed, the general cancellation provisions found in the common policy conditions apply.

4. Builders risk coverage can be written on exposures during construction that may not be eligible for certain coverages when occupied. The rationale is that buildings eligible for builders risk coverage are commonly unoccupied; therefore, eligibility criteria that depend on occupancy or use don’t apply during the course of construction. Examples of such exposures include boarding or rooming houses (with a maximum of four units), dwellings and farm properties.

5. ISO’s Builders Risk Coverage Form, CP 00 20, is the basic avenue to builders risk coverage in the simplified language commercial property program. The amount of coverage is based on the value of the building upon completion (including the value of permanent fixtures and decorations). Insurance on that value is provided from the outset of construction until coverage ceases.

6. Covered property (for which a limit of insurance must be shown in the declarations) includes the building or structure while in the course of construction and extends to foundations and certain items of property intended to become a permanent part of the building while located in, on or within 100 feet of the described premises.

7. Insurers consider builders risk coverage to cease when the insured occupies the structure because builders risk rates don’t contemplate the increased exposures of premises that are occupied.

8. ISO also provides another Builders Risk Coverage Form, IH 00 70 12 13, which is designed to provide broad coverage for the property that building contractors need to insure: building materials and supplies, fixtures, machinery and equipment to service the building.


Source: Property Casualty 360