Bert J. Harris Act – Part 2

Thursday, 13 September, 2012 06:00 Written by Tyler Hampy 0 Comments

As I mentioned in my previous post regarding the legal substance of the Bert J. Harris Private Property Rights Protection Act (the “Act”), this post will center on the procedural aspects of the Act.

Maybe not quite as exciting, but very important to know. If the procedure isn’t followed correctly, the claim has no leg to stand on.

As a quick refresher, the Act was formulated to provide protection (often by way of compensation) to private property owners when a rule, regulation, law, or ordinance of the state or political entity in the state restricts or limits private property rights.

As for the procedure, a claim brought under the Act must be presented to the government entity no later than one year after the rule, regulation, ordinance, or law is first applied. However, the 1 year deadline is tolled while the property owner seeks other available administrative or judicial relief.

To begin an action, the Act requires that a property owner (also referred to as the claimant) give at least 180 days notice to the governmental entity before filing a claim under the Act. A property owner wishing to bring an action must present the claim in writing to the head of the governmental entity against whom he/she intends to file. If more than one governmental entity will be involved in the action, the property owner must present the claims to each of the governmental entities separately. Along with the notice of the claim, the property owner must submit a bona fide, valid appraisal that supports the claim and demonstrates the loss in fair market value to the real property (i.e. the inordinate burden).

After receiving notice of the claim, the governmental entity must report the claim in writing to the Department of Legal Affairs in Tallahassee within 15 days. Additionally, the governmental entity must provide written notice of the claim to all property owners of real property contiguous to the claimant’s property. This step is done is to ensure that adjacent property owners are made aware that they may have a similar claim.

During the 180 day notice period, the governmental entity must make a written settlement offer to the claimant. The governmental entity may offer to:

modify, adjust, or change the application of the rule, regulation, or ordinance;
issue a development order, variance, or special exception for the claimant;
purchase the real property from the claimant; or
make no change at all to the rule, regulation, or ordinance.

However, any settlement offered by the governmental entity must protect the public’s interest and represent necessary and appropriate relief and may not be solely to avoid the claim.

Once the offer has been conveyed, the claimant may decide to accept or reject the offer. If the claimant does not accept the offer, the governmental entity must issue a written ripeness decision identifying the ‘allowable uses’ of the property, or the uses to which the subject property may be put. The ripeness decision basically means that a claimant has exhausted all the administrative avenues to address their issues and has established a sufficient factual basis for the claim.

If the property owner rejects the settlement offer and the ripeness decision, the property owner may file a claim for compensation in the circuit court in the county where the property is located.

The circuit court will then decide whether an existing use of the property or a vested right to a specific use of the property existed and, if so, whether the governmental entity has inordinately burdened the property. If more than one governmental entity is involved, the court must determine the percentage of responsibility each governmental entity contributed.

If the court determines that the governmental entity has inordinately burdened the property, the court will impanel a jury to determine the total amount of compensation that should be paid to the property owner. The jury will determine the amount of compensation by evaluating the difference in the fair market value of the real property prior to the governmental action and the fair market value of the real property as inordinately burdened. Additionally, the property owner will be entitled to recover reasonable costs and attorneys’ fees. However, if the governmental entity prevails in the litigation, it will be entitled to costs and attorneys’ fees.

Is Mediation a Waste of Time?

Monday, 10 September, 2012 06:00 Written by Aaron B. Thalwitzer 0 Comments

The unspoken rule is that lawyers have to profess an affection for mediation. Naysaying runs counter to mediation’s self-professed mantra to “just give it a chance”. And it’s true, you don’t know until you try. But, we usually have a good idea.

In Florida, in most civil cases in which the parties cannot resolve their differences themselves, the court will eventually refer the case to mediation. And sometimes it works. The parties each take a hit, accept more or less than they wanted to, and go their separate ways. But this is often not the case. For a variety of factors, mediation may be, well, pointless. The parties may not yet be appropriately “softened up”, it may be more of a “winner takes all” type of case, or a party simply has nowhere near the money needed to make a meaningful settlement offer. What to do if you don’t want to mediate, or want to, just not until later?

Pursuant to Florida Rule of Civil Procedure 1.700, any party may, within 15 days after the order of referral, move to dispense with mediation or arbitration if:

(1) the issue to be considered has been previously mediated or arbitrated between the same parties pursuant to Florida law;

(2) the issue presents a question of law only;

(3) the order violates the rules pertaining to exclusions from mediation or arbitration; or

(4) other good cause is shown.

Any party may, within 15 days of the order of referral, file a motion to defer the proceeding. The motion must set forth in detail the facts and circumstances supporting the motion, set the motion to defer for hearing prior to the scheduled date for mediation or arbitration, provide notice of the to all interested parties, including any mediator or arbitrator who has been appointed. Mediation or arbitration will be tolled until the disposition of the motion.

Subsection (4) is of interest because it is open-ended. What is “good cause”? I can’t find a single case construing “good cause” in the context of Rule 1.700(c). But, I would argue that a belief that compromise is very unlikely and mediation a waste of time could be good cause.

Don’t get the wrong impression. In the right circumstances, mediation is great. It takes pressure off the courts and resolves some cases. My point is that in some cases, the parties are too far apart, or there can be little to no compromise (e.g. an eviction). In those cases, mediation may not waste the court’s time, but it may waste the parties time, and their money.

Attorney Aaron Thalwitzer practices law in Melbourne, Brevard County, Florida in the areas of civil litigation, real estate law, and intellectual property.

Debtor-Creditor Law: What is considered a Violation under FDCPA?

Monday, 03 September, 2012 08:02 Written by Aaron B. Thalwitzer 0 Comments

Under the Fair Debt Credit Protection Act (“FDCPA”), the below activities are violations. It is a FDCPA violation to make misleading or false representation through a phone call, email, voice mail or letter. Misleading information or FDCPA violations can include.

Threatening to sue or pursue any type of legal action, damage your credit rating, impose any type of property repossession, or wage garnishment which the collection agency does not intend to pursue is a FDCPA violation of consumer’s right.
Mislead the consumer with the amount or the status of the debt.
Contacting someone other than the actual debt holder or cosigner for debt collection. This can include: neighbors, friends, employer or relatives.
Calling on multiple occasions at inappropriate times. The FDCPA defines inappropriate times as any contact after 9:00 PM or before 8:00 AM.
If the collection agency calls an individual at work they may not notify an employer of the reason for the call before being asked.
Making misleading statements to make an individual believe the collection agency is affiliated with the state of federal government and the debt collection documents are official government documents such as a subpoena or court order to pay.
Making any type of inappropriate racial slur, insult or obscene comment in letters, calls or emails.
Making the individual think they have committed some type of crime by failing to pay their debt obligations.
Collecting information under false pretentions such as conducting “surveys”.
Suing you in a court unusually far from your home.
Charging interest or fees not allowed under state laws or outlined in contracts.
Calling an individual at inconvenient locations such as work when an individual has asked the debt collection agency not to call them in either written or verbal form.
Making threats to violently harm an individual if they fail to pay their debts.
Publishing the names of the people who fail to pay their debts (other than by giving the information to a credit reporting agency).
Using a false company name.
Providing incorrect information about an individual to someone else.
Depositing a post dated check early in efforts to get the check to bounce.
Contacting an individual via postcard.

A “debt collector” is someone who regularly tries to collect debts owed to others. A debt collector may contact you if you are behind in your payments to a creditor on a personal, family or household debt, or if an error has been made in your account.

Make no mistake, a debt collector may contact you in person, or by mail, email, telephone, fax (and even telegram, for those of you in the old west).

A debt collector is required to send you a written notice within five days after you are first contacted, telling you the amount of money you owe. The notice must also specify the name of the creditor to whom you owe the money and what action you should take if you believe you do not owe the money.

Question: What can I do to make them leave me alone?

Answer: Two things. Settle the debt, or write them a letter telling them to stop.

Once the debt collector receives your letter, they may not contact you again except to say there will be no further contact, or to notify you if the debt collector or the creditor intends to take some specific action.

If you do not believe you owe the debt, you may write to the collection agency within 30 days after you are first contacted, saying you don’t owe the money. The agency may not contact you after that unless you are sent proof of the debt, such as a copy of the bill.

In addition, debt collectors are required to accurately disclose their identities to the person at the called number, though in practice you are just as likely to hear a dial tone if you ask for the name of the actual human being calling you.

A debt collector may not use false statements, such as falsely implying that they are attorneys, that you have committed a crime, or that they operate or work for a credit bureau or misrepresenting the amount of your debt, the involvement of an attorney in collecting a debt, or indicating that papers sent to you are legal forms when they are not.

There are obvious advantages to writing a cease and desist, but a less obvious one is that violations of the FDCPA can be a basis for a lawsuit, or used as a setoff to lessen the amount you might owe to a creditor such as a credit card company or bank threatening foreclosure. In other words, when they sue you, you can tell the court that they have been harassing you. If the judge finds that you are right, he or she should deduct the damages from your debt. For credit card companies, this could be a large fraction (or even all) the debt, and for mortgage foreclosure cases, it provides a basis to ask for a jury trial (more on that later), and gives the bank a lot to think about if they haven’t been willing to discuss settlement.

Bert J. Harris Act – Part 1

Thursday, 30 August, 2012 06:00 Written by Tyler Hampy 0 Comments

In 1995, Florida enacted The Bert J. Harris Private Property Rights Protection Act (the “Act”) and along with it came the companion legislation, the Florida Land Use Dispute Resolution Act. This post will primarily focus on the substantive law encompassed in the Act while my next post will center on the procedural aspects of the Act.

To begin, the Act was formulated as an attempt to provide greater protection to private property owners in response to the government’s excessive rulemaking and over-regulation.

The Legislature recognized that some rules, regulations, and laws of the state restrict or limit private property rights without amounting to a taking under the laws of Florida or the United States Constitution. Therefore, the Legislature decided to create a separate and distinct cause of action from the law of takings.

The new cause of action provides for payment of compensation when a new law, rule, regulation, or ordinance of the state or political entity in the state, as applied, unfairly affects real property.

So, of course, property owners wanted to know to what extent does the regulation have to affect the property to obtain relief? The Legislature determined that relief would be available if the law or regulation “inordinately burdens” private property rights.

So the next question became, well, what is considered an inordinate burden? It’s defined in Fla. Stat. 70.001(3)(e) as an action of one or more governmental entities that has directly restricted or limited the use of real property such that the property owner is permanently unable to attain the reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property with respect to the real property as a whole, or that the property owner is left with existing or vested uses that are unreasonable such that the property owner bears a disproportionate share of a burden imposed for the good of the public, which in fairness should be borne by the public at large.

With that said, all was well with the Act until 2006, when Brevard County questioned its constitutionality. In Brevard County v. Stack, property owners brought an action under the Act arising out of a county ordinance that restricted their ability to use wetland portions of property. They asserted that they suffered a significant diminution in value because of the ordinance that, as applied, denied them the ability to develop their land and allow offsite mitigation for wetland impacts. The Circuit Court held in favor of Stack, and the County appealed, claiming that the Act was unconstitutional for three reasons.

1. County’s Claim: The Act authorizes local governments to contract away inherent sovereign police powers and requires the government to buy back the ability to exercise those powers, violating due process.

Court’s Ruling: When the government inordinately burdens property through regulation, the Act provides relief for property owners. If an inordinate burden is found, the government can waive, modify, or change the regulation or financially compensate the property owner. The Act does not affect the inherent power of the government, but requires that the government fairly provide relief to the property owner.

2. County’s Claim: The Act violates the separation of powers doctrine and changes the judicial interpretation of a taking under the Florida Constitution.

Court’s Ruling: The Act establishes a new and distinct cause of action separate from a taking.

3. County’s Claim: The Act delegates legislative power to the courts because there are no standards, conditions, or criteria to guide interpretation of the Act.

Court’s Ruling: The Act contains definitions, time periods, settlement options, and other guidelines for determinations to be made by the judicial system, pursuant to statute.

In sum, the Court held that the Act did not violate due process, did not violate the separation of powers doctrine, and did not unconstitutionally delegate legislative power to the courts. Therefore, the Act was upheld as constitutional.

Since that time, landowners have achieved success with claims brought under the Act, and as a result, local governments are becoming more willing to settle with property owners.

Foreclosure Defense and Short Sales: Tax Consequences

Monday, 27 August, 2012 06:00 Written by Aaron B. Thalwitzer 0 Comments

Question: Do I have to pay taxes on the amount the bank forgave when they foreclosed on my house?

Answer: Sometimes. It depends on a lot of factors, but for many residential homeowners, the answer may be No.

Many homeowners default on their mortgage and note. Often, these homeowners (or their attorneys) will negotiate with the bank to receive a principal reduction on the amount of the loan, or give the bank a deed in lieu of foreclosure, or do a short sale.

This will help you how to find out whether you have to pay taxes on the amount of the loan that was forgiven.

First, an example. Let’s say that in 2007 you took out a $200,000 loan to buy your home. You’ve paid down $20,000, and still owe $180,000. The payments have increased, your paychecks decreased (or stopped coming altogether) and despite your best efforts, you ended up missing several payments and defaulted on the loan.

Under the Mortgage Forgiveness Debt Relief Act of 2007 (“MFDRA”), the homeowner may be eligible for an exclusion if:

the property is residential, and
the balance on the loan is $2 million or less, and
the mortgage or mortgages was/were used to buy or improve the property, and
the owner lived there for at least 2 out of the last 5 years, and
the debt was non-recourse (i.e., foreclosure was the bank’s only remedy after homeowner default), and
the discharge is related to a decline in value or the homeowner’s financial condition, and
the discharge is not related to services performed for the lender.

The MFDRA expires at the end of 2012 (though President Obama has included an extension to 2015 in his 2013 budget proposal). The exclusion limit is $1 million for a married person filing separately. Equity used for other purposes (e.g. paying off credit cards, other loans) may not be excluded. The MFDRA applies to foreclosures and modifications which qualify as above.

After the reduction, the lender is required to send the homeowner a 1099-C, Cancellation of Debt form. The homeowner must fill out IRS Form 982 when filing taxes that year.

If the MFDRA doesn’t apply, the homeowner may also exclude if he or she is insolvent (total debts exceed the total fair market value of all assets), at which point bankruptcy may be worth considering.

The IRS has some useful information on their web site which goes into much more detail. If you decide to take advantage of the income exclusion, I strongly recommend that you consult with an attorney. Whatever you decide, the government has provided an excellent tool to save you money.

ZIES WIDERMAN & MALEK is a law firm practicing civil litigation, real estate, and intellectual property law in Melbourne, Florida. To contact Mr. Thalwitzer, call (321) 255-2332 or email him at Aaron@LegalTeamUSA.com.

Category: Civil Litigation

Bert J. Harris Act – Part 2

Is Mediation a Waste of Time?

Debtor-Creditor Law: What is considered a Violation under FDCPA?

Bert J. Harris Act – Part 1

Foreclosure Defense and Short Sales: Tax Consequences

Subscribe

Categories

Archives

Tags

Pages

Login