What Impact Will a PACE Loan Have on Your Real Estate Closing

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Many property owners today are exploring options to help strengthen their property to prevent damage during next year’s hurricane season now that the 2017 hurricane season is behind us as well as to improve the energy efficiency of their home.  However, such improvements are often cost prohibitive.  But back in 2010 our legislators authorized Property Assessed Clean Energy (PACE) programs to help homeowners finance the cost of those home improvements.

PACE programs assist both residential and commercial property owners to finance certain energy efficient and wind resistant improvements to their property.  These loans are secured by financial agreements and paid by a non-ad valorem assessment through the property owner’s real property tax bill.  In other words, the loan is added to your tax bill and becomes part of your property tax obligation and the loan terms are spread out over time.

Even though PACE programs were authorized by the Florida legislature back in 2010, there were numerous legal challenges both in state and federal court which slowed down its implementation.  However, the appellate courts finally resolved the legal challenges to the PACE program in late 2015.  Shortly thereafter the program began to grow in popularity.  Indeed, there are billboards advertising these programs all over South Florida today.

The advantage of these loans is that the money is fairly easy to secure and accessible pretty quickly too with very reasonable re-payment terms.  The PACE program often works with pre-qualified contractors and payment is not made until the job is complete and all permits have been closed.  The disadvantage is that the loan will be added to your tax bill thereby increasing your property tax obligation.  You will also have to pay some interest on that loan too over the length of the loan.

But the question that is popping up more and more at the closing table is – what do we do with that PACE loan?  While there is no uniform answer to that question here are some options:

  • Some lenders will agree to take an exception to the PACE financed home improvement program.
  • However, other lenders may require that the lien be satisfied at the time of the closing.
  • Buyers may also agree to assume the lien if it is not paid off at the time of closing.

The issue of what to do with the PACE loan at the time of the closing will increase in frequency with the anticipated increase in popularity of these PACE loans.  It is probably in the best interest of both the buyer and seller to address this issue at the time the contract is signed and not at the closing table.

Make Sure You Understand What You Are Signing During a Real Estate Transaction

Moreno v. First International Title, Inc., is a case that illustrates the importance of making sure you understand what you are signing during a real estate transaction.  Because if you do not know what you are signing when buying property it could end up costing you thousands of dollars like it did to Victoria Moreno and causing you unneeded stress and aggravation.

In that case, Victoria Moreno (“Moreno”) purchased property encumbered with liens and code violations.  Prior to closing, she was given several documents explicitly disclosing each of the code violations and liens, and indicating the amount necessary to cure the violations, which was approximately $64,000.00.  She also signed a Hold Harmless document, which had also attached the list disclosing all of the code violations and lien information.  The closing occurred a few days after she signed all of those documents.

Months later, Miami-Dade County assessed Moreno for the outstanding violations.  As a result of being hit with a hefty fine Moreno sued First International Title, Inc. (“FIT”), the closing agent for the sale, claiming that FIT breached its fiduciary duty to clearly communicate the allegedly “latent defects” of the additions built without proper permits that affected the value of the house.  When Moreno was deposed she admitted that she signed all of the documents associated with the closing including the Hold Harmless document and the document detailing the code and lien violations.  She also admitted that she signed those documents even though she does not speak or read English.  She also admitted that she made no attempt to have anyone explain the documents to her.  Given that testimony FIT then moved for summary judgement and the trial court granted the motion.  The Third District Court of Appeal affirmed the trial court’s granting of that summary judgment.

The Third District Court of Appeal observed that the record did not reflect any facts that indicated that Moreno was fraudulently induced to sign the documents.  Nor was she purposely or negligently misinformed.  The record further reflected that Moreno was in no way prevented from reading or inquiring about the documents.   The documents clearly set forth the violations and Moreno had every opportunity to read through them.  The Third District Court of Appeal supported its decision by citing a series of cases that that all stand for the proposition that failure to read or understand a contract is not a defense where the person, such as Moreno here, was not prevented from reading them and was given a full opportunity to read them.

ABOUT THE AUTHOR.  Hugo V. Alvarez is a shareholder at the law firm of Becker & Poliakoff.  He is the 2017 Dade County Bar Association’s Legal Luminary Award winner.  He was also named to the Best Lawyers in America in Real Estate related litigation.

How to handle open permits is often a common question associated with real estate transactions

How to handle open permits is often a common question associated with real estate transactions.

When a property owner wants to perform certain work to their property they typically have to secure a permit from the governing municipality.  The governing municipality then performs an inspection of the work once the work is completed.  If the work passes inspection the permit is then closed.

But there are times when a permit is not closed.  For instance, even if the work permit was secured the owner may have failed to either start or complete the work.  Perhaps the work was completed but someone neglected to secure an extension to close the permit.  Or perhaps an inspection of the completed work revealed deficiencies and the owner failed to remedy those deficiencies.  And then there is the situation where perhaps the permit simply expired and the owner failed to follow up to either have the permit closed or re-issued.

Failing to properly close a permit could end up costing the owner lots of money.  That is because such a situation may result in the issuance of a building code violation which can result in the imposition of a monetary fine.

As a result, many lenders and purchasers will require that a permit search be conducted before the completion of the transaction.  The permit search is being done to determine if there are any permitting related issues that need to be addressed before the completion of the transaction.

This is important because open permits are not covered by title insurance. Open permits are considered matters of zoning and therefore are excluded from title insurance coverage. If you are a buyer of real estate it is imperative that you order a permit search to learn of any potential issues lurking.  Indeed, if you are a real estate agent representing a buyer you may even wish to include some language in the sales contract confirming the seller’s obligation to close any open and expired permits.  If you are a seller, then you may wish to perform your own permit search prior to any sale.

ABOUT THE AUTHOR.  Hugo V. Alvarez is a shareholder at the law firm of Becker & Poliakoff.  He is the 2017 Dade County Bar Association’s Legal Luminary Award winner.  He was also named to the Best Lawyers in America in Real Estate related litigation.

What is Title Insurance and Do You Need It?

You have been home shopping for months.  You have performed thousands of internet searches hunting for your dream home.  You have looked at hundreds of homes in person.  You even submitted several offers to purchase some homes.  But you have finally settled in on the purchase of your dream home.  Now you are staring at your closings costs.  And one of the costs you have to pay is for title insurance.  Which begs the following questions – what is title insurance and do you really need it?

What is Title Insurance

Title insurance has the unique distinction of being the only form of insurance that was actually originated and created right here in the United States.  Title to a piece of property is the evidence that the owner is in lawful possession of that property.  Title insurance insures against financial loss from defects in title to that real property.

For instance, title insurance protects against claims from title defects such as another person claiming an ownership interest in the property, fraud, improperly recorded instruments, encroachments, and other related issues associated with the property.

Why You Need Title Insurance

As we detailed in this prior blog post, during the Great Recession we saw a rise in fraudulent deeds.  Additionally, and as we discussed previously, we also saw the rise of squatters attempting to adversely possess properties that had been abandoned.

Without title insurance the owners of those properties may have lost the property due to the pervasive fraud that was occurring at the time.  And that loss would have had significant financial ramifications.

Moreover, if you are taking out a mortgage to purchase your home then title insurance will almost always be required by the lender.  Your lender will require title insurance because the loan is being secured by the property and title insurance will provide both the lender and borrower/buyer with peace of mind in the event an alleged title defect pops up at a later date.

ABOUT THE AUTHOR.  Hugo V. Alvarez is a shareholder at the law firm of Becker & Poliakoff.  He is the 2017 Dade County Bar Association’s Legal Luminary Award winner.  He was also named to the Best Lawyers in America in Real Estate related litigation.

The Use of a Power of Attorney During a Real Estate Transaction

We get a lot of questions regarding the use of a power of attorney during a real estate transaction. We often get a phone call saying, “Hey, I’m not going to be in town that day, can somebody else sign the documents for me to sell my house?”  The answer, like a lot of answers in our business, is yes and no.

Very technically, you could provide a power of attorney to another individual that you trust to sign documents to effectuate your transaction. Now, that may not make people on the other side of the transaction or other parties in the transaction happy.

For example, title insurance underwriters typically do not like the seller to delegate the authority to sign the deed to a non-party. They typically say, “Well if the seller has to sign four documents, we are ok with the power of the attorney signing documents 1,2, and 3; but we would rather have the seller sign the deed.”  Now, that’s not a requirement or a strict obligation.  But sometimes the underwriter will give the title agent or the closer a little bit of a hard time.

So our advice on closing transactions via power of attorney is:

  1. Be very careful that you trust the person you are going to give the authority to.
  1. Make that decision or ask the questions about that with enough time to allow your Lawyer or Realtor, or your closing professional, with sufficient time to react to that request, prepare the appropriate documents, and get all the required approvals, so that is not an impediment to a smooth closing.

The bottom line is one may be able to use a power of attorney during a real estate closing.  However, the power of attorney should be prepared carefully and with ample time.

If you need any help with your real estate transaction, please give us a call as we are happy to help.

How To Have a Smooth Real Estate Closing

Young woman is signing financial contract with male realtor. Close-up.

Today we are going to talk about how to have a smooth real estate closing.  We want to try and help make your real estate transaction that much more convenient when it comes time to close.

The closing process can be a nightmare with all the paperwork involved and tasks to work through. As everybody knows, we’re all busy, we’re all short on time and it can be a very time consuming process to take time out of our work day to travel to either your real estate lawyers office or the title company’s office to finalize and close your real estate transaction. This causes unneeded stress and can even cause delays in the finalizing of your real estate transaction. That is a headache for all parties involved.

Closing and finalizing on your real estate transaction doesn’t have to be a nightmare though. Our firm is happy to provide convenience at the closing table.

We will perform a mail away closing. We will send a mobile closer to you.

We will work around your busy schedule to make sure the execution of documents necessary to effectuate your real estate transaction is not something that is going to take you the whole day and require that you drive across town to complete.

We believe in streamlining the closing process for you. That way there there are no delays in your transaction.  And all the parties can leave the closing table happy, satisfied and without headaches.

We’ll come to you and do everything we can to make your real estate transaction move as smoothly as possible. We’ll help you make it that much better of a day.

If you have questions about your real estate deal, feel free to give us a call or email us.  We’re here to help.

Don’t Be Spoofed!

Internet TheftDon’t be spoofed!  You’ve read the warnings: “Don’t wire funds in response to an email without using call-back procedures!” In other words, call the party who appears to have sent the email at a known, safe phone number and confirm that they actually sent the email. Well, what happens if you receive a phone call from your intended funds recipient, asking that you wire the funds? To be safe, you should check your caller ID screen and match it to the known, safe number in your file. You should even request an email confirming the instructions, and make sure you receive it.

Are you good to wire? NO.

Fraudsters and thieves are utilizing prepaid “burner” phones and applications that will “spoof” the caller ID of any phone number the caller chooses – even valid phone numbers of actual businesses.

This fraud scheme is rampant – our industry is not the only target.

These spoofing apps advertise themselves as a tool to “prank your friends,” but they are actually being used by criminals posing as entities such as taxing authorities, local bank branches and utility companies to defraud companies and consumers into sending money or providing confidential Non-public Personal Information (NPI).

How does this impact real estate closings? Fraudsters have quickly learned that responsible professionals have begun utilizing call-back procedures to validate and verify emails regarding wiring of funds.  Therefore, the fraudsters have begun calling with spoofed caller IDs in order to circumvent protective practices and procedures.

DON’T GET SPOOFED! An incoming phone call never takes the place of an outgoing confirmatory call before wiring funds.

Buyers Beware of Buying Foreclosures

homestead exemptionForeclosures only seem like good deals today.  But if you’re going to buy a property being foreclosed then you really need to know what you’re getting. Therefore, buyers beware of buying foreclosures.  That’s why it is critical for buyers to perform all of the necessary due diligence prior to purchasing a foreclosed property.  As part of your due diligence, it is vital to have a home inspection performed by a qualified reputable home inspector. This way you’re going to know what you’re buying.  You need to get that home inspection performed on time so you can make an educated decision about the transaction.

The importance of knowing what you are buying cannot be overstated.

It happens every day where potential property owners fall into a trap.  The trap is when they believe in a property’s potential without consulting a qualified home inspector. They rush through the transaction thinking they are going to make a “quick buck” by flipping the foreclosed property, or they may just want to buy a cheap fixer-upper to make their dream home or office space.

Whatever the case may be, what inevitably happens most of the time is the buyer just purchased a bigger problem than they realized.  The property may require a lot of repairs, or worse a property that is condemned.

Of course, there may also be problems with the chain of title.  The foreclosure may not have been conducted properly by the foreclosing party which may mean that the buyer does not even own the property properly.  That would invariably result in additional litigation to clean up the chain of title and ownership rights.

Therefore, it cannot be stressed enough that if you want to make a successful foreclosure purchase here in Miami, take the time and effort to find a reputable home inspector that you can trust. Spend the money on hiring the necessary professionals to perform all the necessary searches and engage in the necessary due diligence to learn as much about the property as you possibly can.

Remember, buying a foreclosure is only a good deal when you take the appropriate steps to ensure that the property you are buying is worth the money and effort required.  Do not hesitate to contact us should you wish to discuss further.

Harp 2.0 Mortgage Refinance Real Estate Option

re-finance 00zzToday we want to talk to you about the Harp 2.0 refinance real estate option that could save you lots of money. The Home Affordable Refinance Program or Harp 2.0 is a government program that allows home owners of both primary residence and investment properties to refinance their properties and take advantage of some of the very attractive low interest rates that are present today. It was started by Federal Housing Finance Agency to help those homeowners who were drowning in debt by refinancing, even if they owed more than what the house is worth. Please be aware that this government program expires in 2017, so if you are interested in refinancing your property it’s something you should take advantage of now. Some of the requirements to be eligible for HARP 2.0 are that you had to have sold your mortgage to either Fannie Mae or Freddie Mac by June 1, 2009.

You must have no late payments in the last 6 months, no less than 1 late payment in the past 12 months, you must be up to your current mortgage payment along and this must be your first refinance through HARP.

Along with the HARP eligibility requirements, lenders may have their own. Lenders require you to provide proof of income, and some even require a minimum credit score to qualify. Many banks like Bank of America, Chase and Wells Fargo are experience delays in the application process due to the sheer volume of applications. So as I have said before, if this is an attractive option for you, you will want to start the process immediately.

If you have any questions about Harp 2.0 please feel free to email or call our office and we will be happy to explain it to you further.

Top 3 Reasons You Need A Real Estate Lawyer For Your Real Estate Transaction

Real Estate TransactionOur firm handles real estate closings. We’ve been doing them now for over ten years. A real estate closing is the final step of a negotiated contract to transfer real property from the seller to the buyer.  With that in mind, we are frequently asked, “do I need a lawyer for my real estate transaction?”  The answer to that question is no, you don’t need a lawyer. But you should have a lawyer, on your side, representing you, and looking out for your best interests. Having a lawyer is important because the lawyer will typically have the experience and the knowledge necessary to properly navigate your real estate transaction. With that said, here are the top 3 reasons you need a real estate lawyer for your real estate transaction.


You may run into obstacles that could bring your real estate transaction to a halt.  Having the right professional will help to ease those tense situations, and work through those obstacles.  On the other hand, you can certainly try and do it all yourself.  But in this world, we should probably stick to what we know and do best. Still, if you are set on performing a transaction without a lawyer, we would suggest at least talking to some real estate lawyers and getting their opinion on your real estate transaction.  Even if it is for a quick five-minute meeting.


You may think the cost involved in hiring a professional is too high.  You may also think that by hiring an expert that there is an extra layer of hassle on top of the added costs.  And all of that may be true.  But making decisions by trying to save some money in the short run may end up costing you a lot of money in the long run.  Plus, the hassle and aggravation will grow too.  You are better off hiring a real estate professional early to deal with all the issues in advance before the they grow into larger and more expenses problems for you.  Here are some additional tips to save money on closing costs.


By hiring a real estate attorney you are buying peace of mind.  You’re buying a solution. You’re buying yourself the safest and smoothest possible transaction and solutions to problems that arise.

The importance of hiring the right professional cannot be overstated.

In a real estate transaction, you should have a lawyer to represent your interests.

If you have any questions about your transaction, then please feel free to contact us.

We’re here to help.