Foreign Dollars Fuel A New Condo Boom In Miami

“They're all coming here because they seem to think this is the next Singapore. This is the next London. This is the next great global city. “

Miami Real Estate Consultant Peter Zalewski

Few people track Miami development closer than Peter Zalewski. He runs Cranespotters.com, a business that keeps tabs on all the new construction proposed in downtown Miami.

In an area that covers less than 4 square miles, he notes, there's a lot going on. In "downtown Miami, we're looking at 69 towers, 18,400 units," all residential condominiums, Zalewski says.

If history is any guide, not all of the projects will be built. But Zalewski says there are other big projects coming that are likely to add to the total.

Unlike construction elsewhere, the new condo boom in Miami is being financed mostly by foreign buyers. It caps a decade of building that has transformed one of America's poorest cities into an international destination.

"I would tell you, if we were to sit down in a year from now, we will be well over and above what we did during our last boom and ultimate bust and then ultimate recovery," Zalewski says.

A City Built On Building Sprees

Since the city was founded just over a century ago, Miami's history has largely been a series of property booms and busts.

Over the span of just a few years — until it ended in 2006 — Miami's last building spree added more than 20,000 condo units to a downtown where previously few had lived.

Today's new boom is adding more condos, as well as commercial, retail and entertainment properties, at a dizzying pace.

Brickell City Centre, one of the large-scale projects currently under construction, is a $1 billion project that will include residential condos and a hotel, plus a shopping and entertainment complex.

Several blocks away in Miami, construction is slated to begin soon on an even larger complex, the $2 billion Miami WorldCenter.

Developer Nitin Motwani refers to the project as "the hole in the doughnut." Right now, it's a 30-acre parcel of parking lots and old buildings in the heart of the city. But Motwani is planning a convention hotel, a shopping mall and more condominiums.

"Everybody has got their eyes on Miami," Motwani says.

Fine Homes For Foreign Investors

Similar construction booms are going on in other cities — Los Angeles, New York, Houston and Washington, D.C., to name a few. In Miami, though, developers are focused on one particular Real estate consultant Zalewski says Miami, with its celebrities, nightlife and jet-set events, has built an international reputation.

"This is why we have Russian oligarchs purchasing property. This is why we have Malaysian conglomerates that own casinos and cruise lines coming here and buying," he says. "They're all coming here because they seem to think this is the next Singapore. This is the next London. This is the next great global city."

The annual Art Basel show, an event that attracts the ultra-wealthy to Miami Beach every December, has also been a factor.

Developers and city officials say they can track foreign investment dollars by watching the news. Sales to Russian buyers slowed after the U.S. imposed sanctions on that country. Economic and political turmoil in Latin America brought investors from that region.

And it's not just the super-wealthy buying here. Nelly Fernandez lives in Caracas, Venezuela, where she's a real estate broker. Because of Venezuela's crime and political problems, Fernandez says, she's used her savings to buy a modest condo in Miami.

"I have many, many friends in Miami," she says. "I have family there. In this city, I feel like I am like home, you know?"

Developer Motwani says that's one of Miami's key attractions for international buyers — it's a city where visitors from Latin America, Europe and even Russia quickly find others who literally speak their language.

"When people come here, you get beautiful weather, you get great taxes, you get great restaurants, you get great beaches," Motwani says. "All of that is spectacular. But what no one else can replicate is the diversity of our people."

The decade of residential construction has transformed Miami's downtown. Many of the condos are now rented by young professionals who work and play in the area. City Commissioner Marc Sarnoff says that has dramatically altered the demographics of the urban core.

"The average person is 37 years old. That's pretty young," he says. "Miami is undergoing a youth movement. And that youth movement is good because it's the creative class moving to the downtown core."

But the high-end development downtown can mask another important fact about Miami: Even after all the new construction, it remains one of America's poorest cities. According to the Census Bureau, the Miami area has the nation's second-lowest median income, lower than Detroit or Newark, N.J.

With the wealth pouring in, the divide between rich and poor is getting wider. Particularly vulnerable are residents who live in neighborhoods that border on Miami's downtown.

In Overtown, a nearby neighborhood, work crews are renovating the old Josephine and Dunn Hotel. It was one of the few accommodations in segregated Miami open to African-Americans in the 1930s and 40s.

Yvette Harris works with Jackson Soul Food, a restaurant that's a Miami landmark. By next year, Harris says, Jackson will turn the old hotel into a European-style bed and breakfast "where travelers will be able to come into a community where they're able to do some cultural tours and learn a little bit about the Overtown area."

The work is being paid for out of a fund generated by fees on downtown development. Also in the works is a $60 million project to build affordable housing.

Activist and author Marvin Dunn is concerned about the neighborhood's future as developers begin looking for new places to build.

"So these properties [will] become very, very valuable," he says. "What will happen? The private market will dominate. People will build. Development will proceed to the west. Overtown will be squeezed."

Dunn believes gentrification may push out half of the community's longtime African-American population in coming years. A decade after high-rise condominiums began reshaping Miami's downtown, it's an indication that the city's transformation never stops.

Read More and Listen: http://www.npr.org/

Miami home price index rises 10.3%

The Standard & Poor's/Case-Shiller home price index for Palm Beach, Broward and Miami-Dade counties increased 10.3 percent in September from a year earlier. While the gains here are getting smaller, the tri-county region was the only metro area among the 20 measured nationwide to see a double-digit annual increase.

The West and Southwest, previously strong regions, are seeing price gains fade," David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a statement Tuesday. The only region showing any sustained strength is the Southeast led by Florida; price gains are also evident in Atlanta and Charlotte.

Read More: http://www.sun-sentinel.com/

Bicycle Theft Prevention

Notice from Miami Beach

You May Temporarily Experience a Slight Decrease in Water Pressure November 15 -22

The City of Miami Beach may notice a slight drop in water pressure starting tomorrow, November 15 for approximately seven days. There is no concern about the safety of the water under these conditions. The Miami-Dade County Water and Sewer Department is performing an emergency replacement of concrete pipes on the Miami side of the Julia Tuttle Causeway. In order to perform the work, contractors will replace one of the water mains that feed the City of Miami Beach. Please note, this is a temporary situation and is not under the authority of the City of Miami Beach. Call 311 for more information.

I want to be a Director on my Condominium or HOA Board. Am I Eligible?

By Paul T. Hinckley, Esq.

As election season approaches, the issue of who is qualified to serve on a condominium or homeowners association’s board of directors can become a hotly contested issue.  This post examines how eligibility to serve as a director in such a community association is determined.

Most Florida condo associations and HOAs operate as not for profit corporations.  Florida law provides that directors of such corporations must be natural persons.  This means that corporations, limited liability companies, and other legal entities are not permitted to serve as directors.  The law also requires individuals serving on the board of directors to be at least 18 years old, so minors are not eligible for board membership in community associations.

There is no statutory requirement that directors be members of the community association on whose board they serve.  However, if the association’s articles of incorporation or bylaws require directors to be members, then non-members of the association may not serve as directors.  Membership in associations is determined by record ownership of lots or units in the condominium or community served by the association.  Record ownership is determined by examining the deed or other instrument by which title to the lot or unit is held.  With married couples, title to property is sometimes held solely in the name of one spouse.  In such cases, only the spouse who holds title to the property is a member of the association.

If title to the lot or unit is held in trust, and membership in the association is determined by record ownership of lots or units, Florida law provides that the grantor of the trust is deemed to be a member of the association and eligible to serve as a director.  If the beneficiary of the trust occupies the lot or unit, the beneficiary of the trust is deemed a member of the association and eligible to serve as a director.

A director who has been suspended or removed from office by the Florida Division of Condominium is not eligible to be a candidate to serve on a condominium association’s board of directors, and neither is a person who is delinquent in the payment of assessments.  For homeowners associations operating under Chapter 720, Florida Statutes, a person who is delinquent in the payment of any fee, fine, or other monetary obligation to the association for more than 90 days is not eligible for board membership.

A person who has been convicted of a felony is not eligible for board membership in either a condominium or homeowners association unless such felon’s rights have been restored for at least 5 years as of the date such person seeks election to the board.

Read More: http://www.floridacondohoalawblog.com/

Construction Lien Law Can Result In Condominium Associations Paying Twice For the Same Work

By Joseph Adams 

Question: Our condominium association is going to re-roof all of the condominium buildings this winter. In my home state, there was a “mechanics lien law” which applied to repairs of this nature. Does Florida have a “mechanics lien law”? B.H. (via e-mail)

 Answer: Yes. Florida’s Mechanics Lien Law was renamed the “Construction Lien Law” about 25 years ago and is found at Chapter 713, Florida Statutes. If your association undertakes an improvement to real property (such as re-roofing), and the contract price is more than $2,500.00, then the association must comply with the Florida Construction Lien Law.

The first step in doing so is recording a Notice of Commencement in the public records in the county where the condominium is located, before the work starts, and posting a certified copy on the job site. Individuals or companies that supply labor or material for the project who are not in “privity” (direct contract) with the association will often serve “Notices to Owner” upon the association during the course of the work. This is the first step for a supplier of labor or material in perfecting their lien rights under Chapter 713.

If the association receives a Notice to Owner, then it must ensure that every time it pays the general contractor, it receives a proper lien release from anyone who served a Notice to Owner. The association should also receive a lien release from the general contractor each time it pays the general contractor.

Before making final payment to the general contractor, the association must receive a final lien release from any person or entity who served a Notice to Owner, a final lien release from the general contractor and a final contractor’s affidavit from the general contractor.

The Florida Construction Lien Law is very technical in nature and it is best that the association seek advice from counsel about how it works. If the association does not comply with the law, it may end up paying double for the same work, first to the contractor, and once again to the subcontractor or material supplier who the prime contractor did not pay. The law is clearly intended to favor the suppliers of labors and materials, and not the owner of the property.

View Original: http://www.floridacondohoalawblog.com/

Accepting Partial Condominium Maintenance Fee Payments Can Compromise Rights

By Joseph Adams

Question: We have an ongoing dispute with an owner. They are always late on maintenance fees and they claim they have a right to deduct half their fees because of a water leak affecting their unit. They just sent us a check for about 75% of what is owed, and said that this was payment in full. Is there any reason we should not cash the check?  J.M. (via e-mail)

Answer:  Owners have the obligation to pay their assessments in a timely manner and do not have the right to withhold any portion of their assessment payments due to such a dispute.Florida appellate courts have found that an owner’s contention that the association is failing to maintain the common elements is not a defense to an assessment lien foreclosure action. However, the appellate courts have recognized that “setoff” can be a defense to a foreclosure action.

Therefore, if the owner is able to demonstrate that she suffered damages as a result of the association’s failure to maintain the common elements,  those damages could reduce the amount of the association’s lien foreclosure judgment. 

With regard to the owner delivering a check to the association for less than the full amount owed but stating on the check that it was for “payment in full,” the Florida Condominium Act provides that any payment received by an association must be applied first to any interest accrued by the association, then to any administrative late fee, then to costs and reasonable attorney’s fees incurred in collection, and then to the delinquent assessment. The Act further provides the foregoing is applicable notwithstanding any restrictive endorsement, designation, or instruction placed on or accompanying a payment. Many have believed these provisions entitle the association to accept payments such as the one in your case without any adverse risk to the association.

However, a recent Florida appellate case held the statutory language concerning restrictive endorsements is limited to restrictive endorsements instructing how the association must apply the payment on the account, and not necessarily to those restrictive endorsements intended to operate as an accord and satisfaction or a settlement of the claim. Therefore, the association should consult with its attorney concerning whether it should accept the payment in your particular case. Accepting the payment might result in a full settlement of the amounts due to the association.