Legislative Victories: Liability Protections & Business Rent Tax Cut
TALLAHASSEE, Fla. — Realtors® and their businesses now have significant liability protections in terms of COVID-19-related lawsuits thanks to a new law passed this year. Realtors with commercial clients who rent their property can also celebrate a massive cut to the state’s burdensome Business Rent Tax.
Florida lawmakers also passed numerous other laws that impact Realtors and their businesses during the 60-day session that ended a short time ago. Bills passed head to the governor for final approval.
Florida Realtors biggest legislative victories
- COVID-19 business liability protections — Senate Bill 72 provides protections for Florida businesses and healthcare providers from lawsuits resulting from COVID-19-related circumstances. Highlights of the bill include a lawsuit requirement to provide an affidavit from a physician attesting that a company caused the injuries/damages, and immunity from liability if a court determines a company made a good-faith effort to comply with government health standards. Effective: The bill became effective on March 29, 2021, when Gov. Ron DeSantis signed it into law.
- Massive reduction to the Business Rent Tax (BRT) — Senate Bill 50 requires out-of-state retailers to collect and remit sales taxes on purchases made by Floridians, producing an estimated $1 billion a year in revenue. This new revenue will initially be used to replenish Florida's Unemployment Compensation Trust Fund. Once replenished, it will then reduce the BRT from 5.5% to 2%, saving commercial tenants an estimated $1.23 billion annually. Effective: July 1, 2021, with the BRT reduction occurring once the trust fund is replenished. DeSantis signed this bill into law on April 19, 2021.
- Nearly $900 million for the environment — The Florida Legislature continues to allocate significant amounts of funding for projects that help address Florida’s environmental issues. This year’s funding includes money for Everglades restoration ($487 million), springs protection ($50 million), beach projects ($100 million), the Wastewater Grant Program ($116 million) and the Resilient Florida Grant Program ($29 million). A total of $1.08 billion in federal funding available through the American Rescue Plan Act of 2021 has also been allocated for several of these environmental programs. Effective: July 1, 2021.
- Curbing rising property insurance costs — Senate Bill 76 is a comprehensive property insurance bill that implements several measures to address rising insurance costs within the state. First, it limits the practices that contractors may engage in regarding insurance claims for roof damage. Second, it limits the fees that attorneys representing claimants may receive. Third, it requires policyholders to file claims within two years of a loss. Fourth, it strengthens Florida Office of Insurance Regulation (OIR) oversight of companies affiliated with Florida property insurers and requires Florida residential property insurers to annually file a comprehensive report with OIR regarding their closed claims. Finally, it raises the cap on Citizens Property Insurance Corp.'s annual rate increases to a maximum of 15% in 2026. Effective: July 1, 2021.
- FREAB composition made more equitable — The Florida Real Estate Appraisal Board (FREAB), which regulates the activities of appraisers in Florida, consists of nine members, two of which represent appraisal management companies (AMCs). With only 219 AMCs in the state, compared to 6,600 appraisers, their board representation was disproportionate to their industry presence. Senate Bill 346 addresses this by switching one AMC member to a member of the general public. Effective: November 11, 2021.
- Key appointments/reappointments to real estate boards/commissions — The Florida Senate unanimously confirmed several Realtors, appraisers and a former Florida Realtors staff member to the Florida Real Estate Appraisal Board (FREAB) and the Florida Real Estate Commission (FREC). Janet Rabin, Herbert Jourdan and Shawn Wilson were confirmed to serve on FREAB, and Patti Ketcham, Renee Butler, Patti Fitzgerald and Randy Schwartz were confirmed to serve on FREC. Additionally, Secretary Julie Brown was confirmed as the new head of the Department of Business and Professional Regulation.
- Preventing unlicensed real estate activity — The Legislature allocated up to $500,000 to combat unlicensed real estate activity. Effective: July 1, 2021.
- Community association improvements — Senate Bill 630 ensures Realtors and other essential workers have the access needed – even during a declared state of emergency – to sell or lease condominiums and HOA properties. It also contains a $150 transfer fee cap, and it allows community associations to stop discriminatory restrictions. Lastly, it prevents an HOA from enforcing newly adopted long-term rental restrictions against property owners who voted against the changes. However, the amended rental restrictions would apply to subsequent purchasers. Effective: July 1, 2021.
- Limiting Impact fees — House Bill 337 will limit increases in impact fees, which many local governments collect to help pay for growth-related costs. The bill prevents impact fees from being increased more often than every four years and caps the increases at 50%. It also requires impact fees to be implemented in certain increments depending on the size of the increase. Lastly, it allows local governments to exceed the fee limits if they can meet certain legal criteria. Effective: Upon being signed into law.
- A tax break for elevated homes — House Joint Resolution 1377 creates a proposed constitutional amendment concerning the assessed value of homes that are elevated. If voters approve the measure in 2022, the improvement would not be considered in determining the home’s assessed value provided the work meets National Flood Insurance Program and Florida Building Code elevation requirements. The tax break is part of an overall effort to incentivize adaptation and resiliency within the state. Effective: Upon the approval of Florida voters.
- Combating sea level rise — Senate Bill 1954 creates the Resilient Florida Grant Program within the Department of Environmental Protection (DEP) to provide grants to local governments for resilience planning, data collection and adaptation projects, which will be sequenced through a statewide plan. Additionally, the bill assigns the University of South Florida to lead research and innovation regarding flooding and sea-level rise for the state. Effective: Upon being signed into law.
- Protections for home-based businesses — House Bill 403 ensures that local governments may not treat a home-based business differently than other businesses. It also allows any adversely affected home-based business owner to challenge any local government action regulating home-based businesses, with the prevailing party potentially recovering reasonable attorney costs. Effective: July 1, 2021.
- Easier tax relief for seniors — Currently, low-income seniors must submit a sworn statement of household income annually to maintain an additional homestead exemption that some local governments provide. House Bill 597 changes that requirement so that the document only needs to be submitted when first applying for the exemption. Property appraisers must annually notify these seniors of the adjusted income limitation for that year, and in turn, be notified by a senior if their income exceeds the limit. Effective: July 1, 2021.
- Permanent funding for affordable housing programs — Senate Bill 2512 guarantees that 50% of the money available in the State and Local Government Housing Trust Funds is allocated to affordable housing programs. The remaining 50% will fund sea level rise infrastructure and wastewater infrastructure projects. Effective: July 1, 2021.
- Recognizing private property rights — House Bill 59 requires local governments to add a component to their comprehensive growth plans that considers the private property rights of the owners impacted by those plans. The bill also requires the Department of Transportation (DOT) to afford first right of refusal to the previous property owner of land DOT purchased within the last 10 years. Effective: July 1, 2021.
- Better disposal/reuse of reclaimed water — Senate Bill 64 requires utilities to submit a plan to eliminate the disposal of effluent, reclaimed water, or reuse water by surface water discharge within five years. It also allows potable reuse as an alternative water supply and eligible for alternative water supply grant funding, and provides for reuse and reclaimed water for irrigation purposes under certain conditions. Effective: Upon being signed into law.
- Easing burdens on property rights — House Bill 421 modifies the Bert Harris Act, which provides legal remedies for owners whose property rights are burdened by local government actions. These include: reducing the timeframe under which a claimant must notify the government before filing an action; specifying that written settlement offers are presumed to protect the public interest; allowing the claimant to have the court, rather than a jury, determine damages; extending the point from which a prevailing claimant may recover attorney fees and costs; and authorizing a property owner, under specified conditions, to notify the government that they deem a law or regulation’s impact on their real property to be restrictive of allowable uses. Effective: October 1, 2021.
- Florida building code changes — House Bill 401 allows the Florida Building Commission to issue an “errata to the code” to demonstrate errors within the Building Code if approved by a 75 percent supermajority vote of the Commission. The bill also allows for a substantially affected person to petition the Commission for a nonbinding advisory opinion to a local government regulation which was not adopted as an amendment to the Building Code by the local government at the correct time. The bill prohibits regulations on building design elements for single-family and two-family dwellings except in certain circumstances, restricts local governments from using FEMA preliminary maps to adopt land-use changes or permits, and adds to the list of already approved private inspection services, single-trade inspections. Additionally, the bill requires the Commission to adopt rules for approving product evaluation entities that the Commission may suspend any product evaluation entity. Finally, the bill prohibits any local government from requiring a contract between an owner and a builder before applying for a building permit and allows a local government to use private inspectors for their projects and spend excess fees for local government projects or training employees within four years. Effective: July 1, 2021.
Affordable housing program funding
The total amount available in the State and Local Government Housing Trust Funds this year was $423 million. Of that amount, lawmakers appropriated $209.2 million for affordable housing programs, with the remaining funds being diverted to sea level rise infrastructure and wastewater infrastructure projects via the passage of Senate Bill 2512.
Except for the full appropriation of $370 million last year (which was vetoed by DeSantis), this year’s $209 million is the most that Florida’s affordable housing programs have received in the past 10 years, which is great news. However, the permanent diversion of 50% of the total funds available for these programs remains problematic. As such, Florida Realtors® will continue to advocate that these diverted funds be returned to their original intended use – housing.
Bills that did not pass
While numerous real estate-related bills and budget items passed this year, some did not cross the finish line.
- Private property rights/short-term rentals — SB 522 and HB 219 were companion bills intended to protect the right of private property owners to rent their property on a short-term basis. Many local governments continue to enact ordinances that discourage short-term rentals and infringe on this fundamental right.
- SHIP/SAIL funding changes — Senate Bill 1068 and its companion, House Bill 567 would have enabled local governments to expend a larger portion of SHIP funds on certain rental assistance activities than allowed under current law, and decreased the expenditure threshold for new construction/rehabilitation/emergency repair.
- Expunging tenant evictions — House Bill 1193 and Senate Bill 1746 would have allowed tenants, under certain situations, to have their name expunged from prior eviction proceedings.