Author: khaniauerbach

What Will Happen To The Fort Lauderdale Airport Shooter?

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CRIMINAL LAW FORUM with Mark Eiglarsh, Esq.

What Will Happen To The Fort Lauderdale Airport Shooter?

INTRODUCTION

It was an eerie feeling. As I walked into Terminal 2 of the Fort Lauderdale/Hollywood Airport, just days after the horrific shooting, I was consumed with emotion. It hit me that I was in “The room where it happened.” (Yes, even when describing something dark and emotional, “Hamilton” references still flow out of me) There was an overwhelming presence of media and law enforcement both inside and outside of the terminal. I was headed to Minneapolis for an appearance in federal criminal court. My return flight on Delta Airlines into Fort Lauderdale was the exact one the shooter had taken just days earlier. This case still consumes me. I find myself frequently discussing it with friends and colleagues. I’ve chosen to write this article because I’ve found from my discussions that there’s a lot of misinformation concerning this case. Also, there are many wondering what will likely happen to the shooter, Esteban Santiago. To best be of service in this article, I’ve attempted to answer the most common questions that I believe are on the minds of most people at this time.

QUESTIONS

1) “How can anyone represent this guy?”

With crimes as heinous and troubling as this, many wonder, “How can any attorney represent this guy?” It’s important to understand that without competent counsel by his side, nothing will happen. He is constitutionally guaranteed competent representation at every stage of the proceedings. A defense lawyer is absolutely necessary in order for the case to legally proceed. (unless the accused waives his right to counsel, like Charleston shooter Dylan Roof) Morally, most defense lawyers wouldn’t have an ethical dilemma defending this case because they generally oppose the death penalty, a sanction that prosecutors will likely seek. Also, the role of a defense attorney is to do all they can to obtain the best possible outcome. That doesn’t mean his attorneys endorse, agree with or support Santiago’s behavior in any way. His attorneys are there to ensure that Santiago’s due process rights are protected and that he is treated fairly while they seek to obtain the best possible result.

2) “What can a lawyer do for him? He’s obviously guilty!”

Most believe that the evidence in this case is overwhelming. Consisting in large part of eye-witness testimony, the video, and the suspect’s confession, this case, many opine, should be a “slam dunk case” for the prosecution. Well, I would agree that it is a “slam dunk” solely in that prosecutors will have little difficulty proving that Santiago was the one who committed these abhorrent offenses. However, prosecutors still will have to battle his lawyers concerning the defense that they will invariably raise, insanity. I suspect they will work up that defense in an attempt to save their client’s life. In other words, I believe that as long as their client signs off on it, they would likely be happy with a plea offer of life without parole, in lieu of the death penalty. Prosecutors may choose not to make such an offer.

3) “What is the insanity defense?”

When John Hinckley Jr. went to trial after his 1981 assassination attempt on President Ronald Reagan, the insanity law was different than it is today. When he secured his favorable verdict declaring that he was “Not guilty by reason of insanity,” the burden of proof to prove that he wasn’t insane fell squarely on the prosecution. It was the Government’s obligation to prove to the jury that Hinckley did know right from wrong at the time he committed his offenses. That’s hard to do. As a result of the Hinckley verdict, which sent him to a psychiatric hospital instead of prison, most states changed their laws concerning this issue. The federal government followed suit, and in 1984, Congress enacted the Insanity Defense Reform Act. The new law shifted the burden from prosecutors to defendants to prove their state of mind. That means that a defendant must prove that at the time the offenses were committed, he/she suffered from a mental defect or disease and, as a result, didn’t know right from wrong.

4) “Will the insanity defense work in this case?”

The short answer is, “Probably not.” Statistically, the insanity defense is successful in only a tiny fraction of all criminal cases. There are a number of reasons for that. First, it’s a tough burden to meet. While proving that someone suffered from a mental disorder or defect at the time the offense committed may be less challenging, it’s the second part of the insanity defense that typically is most difficult for defense attorneys. Proving that the person didn’t know right from wrong at the time is a huge challenge.

In this case, it’s going to be a colossal challenge. Prosecutors will point to many facts in the case which evidence the shooter’s state of mind at the time. For example, he purchased a one way ticket, then after his arrival, allegedly chose to enter a bathroom to load his gun, as opposed to loading it in the open in front of others. Additionally, he then placed the gun in his waist band, concealing it under his shirt. He only pulled it out when it was time to shoot. Those are just some of many facts which show that he knew right from wrong. Prosecutors will argue that he took steps not to get caught because he knew what he was doing was wrong. Additionally, jurors generally are fearful that if they vote in favor of insanity and the person is committed to a psychiatric hospital as opposed to prison, that the person may be released from a hospital in a relatively short period of time. (even though John Hinckley Jr. spent 35 years in a hospital before being released) They generally error on the side of protecting the public, which means rejecting the insanity claim so that the offender will never taste freedom again.

5) “But isn’t he crazy?”

Maybe. The shooter may definitely have been suffering from a mental defect or disease at the time that he committed the offense. The reports are that he went to seek help from the FBI in Anchorage a couple of months before the tragic shootings. He complained that he was having “terroristic thoughts” and that his mind was being controlled by the government. Additionally, in November, doctors allegedly diagnosed Santiago with schizophrenia, which could cause delusions and hallucinations. As described above, having a mental illness is only the first hurdle for the insanity defense. Even if prosecutors concede that he was mentally ill at the time, they will definitely argue that he still legally knew right from wrong. The prisons are packed with convicted murders, many who unsuccessfully argued insanity, even though they suffered from mental disorders at the time they committed their offenses.

6) “Will prosecutors even seek the death penalty?”

In spite of a many wanting Santiago to be sentenced to death, prosecutors may not even seek the death penalty. If they do, it will likely be because there were multiple victims, many who were vulnerable due to their ages. Also, the fact that he allegedly planned the atrocities won’t bode well for the shooter. However, in spite of the reasons why prosecutors believe death may be appropriate (known as “aggravating factors”), there are many reasons why prosecutors may not seek the ultimate sanction. (known as “mitigating factors”). First, the fact that he is a veteran and served in Iraq is something that prosecutors will consider. Typically, the justice system tends to treat former military differently. Furthermore, prosecutors cannot overlook Santiago’s documented history of mental illness. His is a rare case where he actually sought help for his condition prior to his crimes. I predict that prosecutors will not seek the death penalty in this case, assuming Santiago will plead guilty to the charges and agree to spend the rest of his natural life in prison.

CONCLUSION

I believe there’s ample evidence proving that the shooter suffered from a mental illness. I also believe that there’s significant evidence proving that he wasn’t legally insane at the time of the shooting. Too many of his actions evidence that he knew right from wrong. I am confident that prosecutors will work out a deal with Santiago, offering him life without parole in lieu of the death penalty.

Khani & Auerbach wishes to thank Mark Eiglarsh, Esq.,  for contributing another informative piece to our News & Notes.  The Law Offices of Mark Eiglarsh specializes in all state and federal criminal matters, from DUI in State Court to complex white collar matters in Federal Court. He can be reached at 877.674.0003.

AVOID A FAIL IN YOUR SALE

Posted on by khaniauerbach
2017-01-04-23-45-38
Photo by Khila L. Khani, iTakeGr8Pics.com

Most discussions about real estate transactions concentrate on the needs of the Buyer. However, Sellers have needs, too! Lately, the residential real estate industry has experienced a slight increase in transactions falling apart. The majority of transactions failing to close seem to be limited to homes that are of lower value and/or older homes. There are steps that Sellers can take to avoid a transaction from “blowing up”. Here are a few tips to assist on ensuring the transaction makes it to the closing date:

1. AVOID THE UNQUALIFIED BUYER: While most Florida real estate contracts provide a “loan contingency,” the failure of the Buyer to qualify for a loan AFTER the contract is signed can be very frustrating for the Seller. To avoid this frustration, we recommend that the Seller request a Pre-Qualification letter and in some instances, proof of funds, to give them additional assurances that the Buyer is capable of getting the funds to close.

2. GET AN PRE-CONTRACT APPRAISAL: As the Seller, sometimes it is difficult to accept a price that is recommended by a Realtor. Often times, Sellers believe their property is worth more than it really is, and therefore they set the sales price higher than the market value. Pricing your property too high can sometimes prevent qualified Buyers from looking at your property. Also, once the property is under Contract, the Buyer’s lender will order an appraisal and you, the Seller could be surprised by the result. Surprises are fun when they are related to a party, but not when you are trying to sell your home. We highly recommend that you obtain what’s called a “Pencil Appraisal” to give you an idea of what your property is worth, before you put the property on the market.

3. CONDUCT A PRE-CONTRACT INSPECTION: Most real estate contracts provide the Buyer with an opportunity to inspect the property immediately after signing. This opportunity to inspect is limited to a certain period of time, usually 10-15 days after the contract is executed. When a Buyer inspects the property, their inspection might reveal defects, damages and issues to which the Seller had no knowledge. However, a Pre-Contract inspection from a licensed inspector will help you avoid surprises that might be revealed by the Buyer’s inspector. The Pre-Contract inspection will permit you discover and make necessary repairs before they are brought to your attention by the Buyer’s inspector. This will lessen the probability of a deal falling apart due to the condition of the house.

At Khani & Auerbach, we are doing our very best to remain at the forefront of the real estate market. We will continue to educate ourselves, our clients and real estate professionals. If you have any questions, please feel free to ask us!

STOP RENTING

Posted on by khaniauerbach

real estate, real estate closings, real estate transactionsEasy to say, hard to do, but there are things you can do now to get you closer to residential home ownership. For years, you have been paying rent to your Landlord or even worse, living with your parents. Here are some things you can do right now to prepare for home ownership.

1. Save Money. Put away a minimum of $50 week. (That’s approximately 2 items at Starbucks per week) If you do this for at least 2 years, you will have saved up $5,200. You can do it!

2. Check Your Credit. Don’t do this often, but make sure you get a gander at your credit report history and see what’s going on there. Stop applying for revolving credit accounts, like department stores, they don’t help, they hurt your score. Only spend what you have. If you do use a credit card, always pay off the balance in full every month. If you already have a balance on your credit card, pay that off as soon as humanly possible. The only ones who benefit from a balance on your credit card are the credit card companies. You don’t want to end up paying $100 for a $5 cup of coffee, you just don’t.

3. Talk with a Mortgage Professional. Find out exactly what it takes to qualify for a mortgage these days. These qualifying requirements change, almost on a daily basis. If you know what you need to do to qualify for a mortgage, it takes the mystery out of the process and gives you a goal. The goal being, getting a mortgage to buy a home of your own.

4. Talk with a Real Estate Agent. Learn what the market is out there and what you think you can realistically afford. Make sure your proverbial eyes are not bigger than your stomach. Don’t try to keep up with everyone else, but rather look in communities that are close to work that you can realistically afford.

5. Stop Accumulating Debt. These days, people are less interested in accumulating things and more interested in accumulating experiences, but keep in mind, both can be costly. Before you take that expensive vacation to hike in Colorado or the Grand Canyon, think about what might be available in your own backyard and accumulate your experiences there so you can stop accumulating debt.

6. Get a Job. Yes, you want to help others and be charitable. It’s an honorable thing to do, but charity begins at home. Be employed and always make money. It’s good to be self-employed, but the problem with self-employment is that you don’t always show a healthy income and that’s what lenders are looking for when they decide whether you qualify for a loan or not. You have to show at least two years of qualified income in order to qualify for a loan. Sometimes, you don’t get that dream job, with that dream income right away, but it’s a step in the right direction and can ultimately lead to home ownership. If you have stable employment, it’s going to make a difference. Remember, home ownership is the goal.

7. Don’t Fear Fluctuating Rates. Mortgage Rates will never be as low as they have been in the past few years, but have no fear! Rates won’t be so high that you will be precluded from obtaining a loan at a reasonable rate.

8. Inventory Will Increase. Yes, for the past few years, it has been a Seller’s market and inventory was definitely scarce. In 2017, however, you will see a change in that scenario. The prediction among most real estate professionals is now shifting and the feeling is that we are moving away from the limited housing inventory and towards a Buyer’s market. The bargains are already popping up in the most unusual places, but you have to be willing to shop.

At Khani & Auerbach, we are doing our very best to remain at the forefront of the real estate market. We will continue to educate ourselves, our clients and real estate professionals. If you have any questions, please feel free to ask us!

Cyber Security Tips

Posted on by khaniauerbach

Being Cyber Safe and Secure

From time to time, we provide information that isn’t necessarily related to legal matters, but that could be useful to our readers. Summer is over and as everyone gets back into the groove, the likelihood of working on the road will increase. As a business traveler, we recommend you take precautions when “on the go” and using technology. Most times, people are more interested in getting their work accomplished and forget about security. Below are recommendations we have collected to remind you about how to maintain good security when on the road.

1. Be sure to have lock functions activated on your portable devices and lock devices in the hotel safe or suitcase. Hackers are quick to insert a thumb drive into your computer and install malware.

2. Encryption for critical email messages with sensitive information. It only takes one good hacker to intercept an email on an open or public network that isn’t encrypted.

3. If you use your laptop in a public place, consider using a privacy filter. Information can easily be retrieved by someone looking over your shoulder or behind you on an airplane.

4. Be AWARE when using public Wi-Fi networks available from airports, hotels or coffee shops. Identity thieves can easily access your device through this type of network and install malware. If you have the ability, we recommend you use alternatives to using public hotspots, such as using your mobile phone as a secure personal hotspot, using a Virtual Private Network (VPN) or a dedicated mobile Wi-Fi system from your cellular carrier.

5. Delete flashlight apps, as research discovered that the top 10 Android flashlight apps are all monitoring user data including location, contacts, banking information and photos. And, as annoying as it might be, read the privacy policy and terms and conditions before downloading any flashlight apps. If they are asking for permissions that a flashlight shouldn’t really need, then don’t download.

6. Bring your own charging devices, as public charging stations can be infected with malware that can acquire data without your knowledge, delete your data or even hold your data ransom.

7. Turn off auto-location settings from non-critical apps. Prevent “Bluetooth Hacking” by ALWAYS turning off Bluetooth so that your device is not discoverable. Hackers are good at hacking phones using malware built to specifically target mobile phones.

8. ALWAYS log out of your web-based email accounts (Outlook Online, Gmail, etc.) when using hotel computers to check your email or print your boarding pass; and remember to empty the recycle bin when you delete any files containing sensitive information on a shared computer.

One Family Cannot Claim Homestead Exemption in Two States

Posted on by khaniauerbach

real estate, real estate closings, real estate transactions

by Khila L. Khani, Esq.

On March 23, 2016, the Fourth DCA a/k/a the appeals court of Florida decided in VENICE L. ENDSLEY, Appellant, v. BROWARD COUNTY, FINANCE AND ADMINISTRATIVE SERVICES DEPARTMENT, REVENUE COLLECTIONS DIVISION; LORI PARRISH, as Broward County Property Appraiser, et al., Appellees. 4th District. in Case No. 4D14-3997 that Article VII, Section 6(b) of the Florida Constitution does apply if a homeowner has a second exemption property in another state, however, it is NOT unconstitutional to deny a spouse her exemption if the other spouse sought exemption in another state.  What does that mean for you, the property owner of two homes in two different states?

Let’s rewind a bit and explain how the Florida Homestead Exemption works.  The State of Florida, via the Florida Constitution, exempts a portion of a Florida homestead from ad valorem tax. This exemption can potentially save taxpayers a few hundred dollars each year. The economic value for homeowners is that such an exemption, under Florida’s Save our Homes provision, caps the ad valorem tax value increases to 3% per year, despite the fact that the value of the residence may increase by more than 3%.

In the case cited above, a husband owned a residence in Indiana. On the property in Indiana, he received a residency-based property tax exemption, somewhat similar to the tax exemption provided by the Florida Constitution. His wife, however, owned a Florida property that she claimed as her residence and received a Florida homestead ad valorem tax exemption. In August 2006, the Broward County Property Appraiser did their homework and revealed that husband and wife were double dipping with the dual exemption filings.  The Broward County Property Appraiser audited the exemption with support from Article VII, Section 6(b) of the Florida Constitution, which reads in part that “[n]ot more than one exemption shall be allowed any individual or family unit or with respect to any residential unit.” Based on that provision, the Appraiser’s office sought to remove the homestead exemption from the couple’s Florida property, even though the property was held in the wife’s name alone, for 1996 through 2006 – this would remove the cap on the value for ad valorem tax purposes and thus, remove the 3% Save our Homes protection.

As mentioned above, the appeals court reviewed the lower court’s decision and decided that the Constitution provision applies if the second exemption property is in another state.  Furthermore, the appeals court decided that it is NOT unconstitutional to deny the wife her exemption on the Florida property because her husband sought exemption in another state.

Florida homeowners with families, you are now informed, warned and advised that you cannot claim homestead in two different states, even if you are married and have individual ownership of those two different properties. One family cannot claim homestead exemption in two states.

At Khani & Auerbach, it is our goal to educate the public as much as possible about changes in real estate law. Khani & Auerbach is here to help.

The Importance of Hiring a Real Estate Attorney

Posted on by khaniauerbach

Miami SkylineI like to call this, “Story Time with Khani & Auerbach”. Yesterday, I received a phone call from a lovely lady regarding a Time Share transfer. The transfer to our caller was conducted back in 2007, but she had some concerns about her ownership interest and wanted to know where she stood. She wanted to ensure that she was in fact the owner and had an ownership interest that she thought she purchased. After doing very light research in the public records, I uncovered two transfers that gave me pause.

The first transfer was conducted in 2001, a Quit-Claim Deed. This Quit-Claim Deed, at first blush, looked really official, as it had been prepared by an attorney. But, as a real estate attorney practicing for 20 years in this field, I never quite trust that any document is prepared accurately, regardless if it’s prepared by an attorney or not. As luck would have it, the document was poorly drafted and the intentions of the transferor/grantor are really unclear. I would do the next best thing and reach out to the attorney that prepared the document. What do you think I would find next? The phone number provided on the Deed was disconnected and after some further inquiry, I found that the attorney was suspended several years ago, had never reapplied to the Bar and was no longer licensed to practice law in the State of Florida. So, the first brick wall in my research was erected. What now?

I wanted to look at the second transfer made in 2007 to my client and found that the preparation of this document was even worse than the one made in 2001. This document looked like someone found a form at Office Depot and just filled in whatever they felt might look right. Well, nothing was right about it and it was ALL WRONG. The second brick wall in my research had now been erected. Now, you might say to yourself, “But, the County recorded this document, so it must be accurate.” Let me be clear when I say, the County will record ANYTHING you put in front of them as long you pay the required fees. They are an administrative agency and they do NOT practice real estate law and do not know anything about the history of the subject property. Furthermore, they have no obligation to know these things. All they do is record documents and collect taxes and fees.

So, now I am reviewing two poorly prepared documents/transfers and have the honor of telling the caller that not only are the transfers poorly prepared, but she may not even have ownership. The next question on your mind may be, “How could any of this been prevented?” Simply, by hiring a Real Estate attorney. A Real Estate attorney has the knowledge and experience to do the job accurately in the first place, avoiding the exact same situation we are presented with in this case.

Now, the first deed prepared in 2001 was, in fact, drafted by an attorney licensed to practice law in the State of Florida, but what I don’t know is how this attorney was found and whether he focused his practice on real estate or not. In addition to hiring an attorney, knowing whether an attorney focuses on real estate is even more important than just hiring any attorney. In this case, I just couldn’t determine this attorney’s area of practice and had to assume he just didn’t know what he was doing. As for the second deed prepared in 2007, well, that was just two parties trying to save a buck. Look where we are now. Unraveling these terrible transfers and correcting these poorly drafted deeds will take more effort, more time and certainly cost more money than all the parties could have ever imagined. All of this could have been prevented just by hiring a real estate attorney in the first place.

About the Writer
Khila Khani is a partner with Khani & Auerbach. Her practice focus has been in Real Estate law for 20 years.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. Should you wish to discuss any potential matters with her or her partner, you can contact them here.

Florida Homestead Exemption Filing Deadline is March 1, 2016

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Homestead Exemption Filing Deadline is March 1, 2016

All legal Florida residents are eligible for a Homestead Exemption on their homes, condominiums, co-op apartments, and certain mobile home lots if they qualify. The Florida Constitution provides this tax-saving exemption on the first and third $25,000 of the assessed value of an owner/occupied residence. While a complicated formula is used to explain this — as the additional $25,000 only applies to the non-schools portion of your tax bill — the bottom line is that the basic homestead exemption can save a Florida homeowner in 2015 anywhere from $641.73 to $1,077.67 (depending upon your city’s millage rate) in annual tax savings for all homes with a value of $75,000 or higher.

You are entitled to a Homestead Exemption if, as of January 1st, you have made the property your permanent home or the permanent home of a person who is legally or naturally dependent on you. By law, January 1 of each year is the date on which permanent residence is determined.

In some Florida Counties, you may be able to file for Homestead ONLINE. Check with your county’s property appraiser office for more information about how to file.

The timely filing period for Homestead Exemption for 2016 is March 3, 2015 through March 1, 2016. The absolute deadline to LATE FILE for any 2016 exemption — if you miss the March 1 timely filing deadline — is September 19, 2016. State law (Sec. 196.011(8), Fla. Stat.) does not allow late filing for exemptions after this date, regardless of any good cause reason for missing the late filing deadline.

What You Need When Filing for Homestead

When filing an application you must bring the following items listed below. To claim 100% coverage, all owners occupying the property as Tenants in Common (i.e., proportional share co-owners) must file in person on jointly held property. In the case of a married couple (“Tenants by the Entirety”) or Joint Tenants with Right of Survivorship (“JTRS”), any one owner may qualify for 100% coverage — although it is always highly advisable to have all eligible owner-occupants to file.

1. Proof of Ownership: In general, the recorded Deed or Co-op Proprietary Lease must be held in the name(s) of the individuals applying for Homestead. In most counties, you may not need to bring a copy of the deed or co-op lease if the document has already been recorded in the Official Records. If the PROPERTY IS HELD IN A TRUST, THE COUNTY MAY ALSO REQUIRE EITHER A NOTARIZED CERTIFICATE OF TRUST OR A COMPLETE COPY OF THE TRUST AGREEMENT. Note: Most taxpayers prefer to use the simple Certificate of Trust form, instead of submitting the entire trust for our review, as it better protects the privacy of your estate planning and other financial matters.

2. Proof of Permanent Florida Residence — preferably dated prior to January 1 of the tax year for which you are filing — is established in the form of:

A. FOR ALL APPLICANTS: Florida’s Driver’s License (or — for non-drivers only — a Florida I.D. Card) is REQUIRED. Note: You must surrender to DMV any out-of-state regular driver’s license. You MUST also have either of the following:
1. Florida Voter’s Registration; or
2. Recorded Declaration of Domicile.

B. FOR NON-US CITIZENS, you MUST have the items listed above AND proof of permanent residency, asylum/parolee status (or other “PRUCOL” status); OR proof you are the parent of a US-born (US Citizen) minor child who resides with you.

3. If you or your married spouse have a Homestead Exemption in any other county, state or country (or an equivalent permanent residency-based exemption or tax credit, such as New York’s “S.T.A.R.” exemption) on another property you also currently own, you will NOT be eligible for a homestead in any Florida county until after you surrender the exemption in that other jurisdiction. (Note: If you know of someone with a Homestead Exemption in a Florida county who also maintains an exemption on another property elsewhere, please report this information to our Fraud Investigations Section at 954.357.6900.)

The State-approved application form requests certain information for all owners living on the premises and filing:
• Current employers of all owners
• Addresses listed on last I.R.S. income tax returns.
• Date of each owner’s permanent Florida residence.
• Date of occupancy for each property owner.
• Social Security numbers of all owners filing.
• Social Security number of any married spouse of the applicant, even if the spouse is not named in the deed and is not filing).

Note: The amount of the homestead exemption protection granted to an owner residing on a particular property is to be applied against the amount of that person’s interest in the property. This provision is limited in that the proportional amount of the homestead exemption allowed any person shall not exceed the proportionate assessed valuation based on the interest owned by the person. For example, assuming a property valued at $40,000, with the residing owner’s interest in the property being $20,000, then $20,000 of the homestead exemption is all that can be applied to that property. If there are multiple owners, all as joint tenants with rights of survivorship, the owner living at property filing receives the full exemption.

FIRPTA Withholding Rate to Increase to 15%

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Effective Feb. 16, FIRPTA general withholding rate increases from 10% to 15%

Author: Jonathan H. (Jason) Warner

Recent federal tax legislation increases the FIRPTA general withholding rate from 10% to 15% effective for closings on or after February 16, 2016. Closing agents should adjust their procedures and forms to reflect this change. (If you want a reference, it is H. R. 2029, now known as Public Law 114-113. See Section 324 for text of changes).

The 10% rate will still apply for those transactions in which the property is to be used by the Transferee as a residence, provided the amount realized (generally the sales price) does not exceed $1,000,000, and the existing $300,000 “exemption” remains unaffected. So here are your new guidelines:

• If the amount realized (generally the sales price) is $300,000 or less, AND the property will be used by the Transferee as a residence (as provided for in the current regulations), no sums need be withheld or remitted.

• If the amount realized exceeds $300,000 but does not exceed $1,000,000, AND the property will be used by the Transferee as a residence (there are no regulations that specifically address these changes but many are assuming you can follow the current regulations for the $300,000 exemption), then the withholding rate is 10% on the full amount realized.

• If the amount realized exceeds $1,000,000, then the withholding rate is 15% on the entire amount, regardless of use by the Transferee.
The well-documented flaws and risks of the $300,000 exemption will likely continue although future regulations could change existing procedures. Members should document the Transferee’s intent to use the property as a residence as best they can and point out to the Transferee the risks of allowing the exemption to apply to their transaction. Under the law, the Transferee is the withholding agent and is responsible for withholding and remitting the proper amount to the IRS. Members should also be alert for situations where the foreign Transferor forces the Transferee to claim residence status merely to lower the withholding rate, since the Transferee could be liable for any additional withholding tax, penalty, and interest if their intent is ever challenged by the IRS.
The current FAR/BAR contract form contains language specifically referring to a 10% withholding. An amendment to the contract for closings scheduled on or after February 16, 2016 should be added to change the potential rate of withholding to 15%.
The remainder of the FIRPTA changes in the recent legislation involve REITS, but a new exemption from FIRPTA taxation and withholding is provided for qualified foreign pension funds. A new certification form likely will be needed to document the exemption.

It is recommended that you seek the advice of a tax specialist regarding the implementation of this new rate, but if you have any questions about how this change might applies to you or a transaction, please do not hesitate to contact Khani & Auerbach.

Reprinted with permission from Attorney’s Title Insurance Fund

Is Consummation the Same Thing as Closing?

Posted on by khaniauerbach

Waterway On October 3rd 2015, the Consumer Finance Protection Bureau (CFPB) implemented new regulations with respect to consumer financing. These regulations affect anyone who purchases real estate and obtains a loan (whether through a bank, mortgage broker or private lender). This video explores a few of those changes and how some of the terms we have been used to hearing for so many years in the title insurance industry are going to change.

One of the most interesting changes comes with terminology used in the process. As title agents that issue title insurance, we are well acquainted with these new terms and are sharing them with you. Something new that is explored in this video below, produced by one of our underwriters, Old Republic Title, is the use of the word “consummation.” In Florida, we are using the word Consummation in place of Closing. Additionally, while we were all used to the word “HUD” or “Closing Statement,” that term has also been replaced with the “Closing Disclosure”. While the HUD or Closing Statement might not necessarily be completed until moments before the closing, under the new regulations, the Closing Disclosure must be received by the Borrower at least three business days prior to the Consummation.

At Khani & Auerbach, it is our goal to educate the public as much as possible about these changes. We hope to provide you with useful videos over the next few months that will assist you in your understanding of these changes so that when you are ready to undertake the purchase of residential real estate, you are armed with all the knowledge to get through the transaction as smoothly as possible. We are here to help.

6 Steps Every Homebuyer Should Expect for Closings

Posted on by khaniauerbach

CLOSING TIME: 6 STEPS EVERY HOMEBUYER SHOULD EXPECT

Get owner’s title insurance and buy your home with confidence
Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something¬ to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.

As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 45 days.

1. Select a Closing Agent
If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a real estate attorney or title company.

Most homebuyers rely on their real estate agent to select a closing agent—someone they work with regularly and know to be professional, reliable and efficient. However, you are always permitted to choose your own closing agent. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.

2. Make a Good Faith Deposit
First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your good faith deposit into an escrow account, where the funds will remain until closing. Typically, the real estate attorney or title company can hold those funds in escrow until closing.

3. Title Search is Conducted
Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.
 
4. Lender’s Title Insurance Policy and Owner’s Title Insurance Policy
There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it ONLY protects the lender.

It strongly recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from county to county within the State of Florida, so ask your settlement agent for guidance before closing.

5. Obtain a Closing Disclosure
Your lender must provide a Closing Disclosure to you at least THREE (3) days prior to closing. Your lender will provide this Closing Disclosure directly to you, the Buyer, at a minimum, three days before you close your transaction.

If you or your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new Closing Disclosure form and an additional three-business-day waiting period after receipt of the new form. The three (3) day period will reset or apply if the creditor:
• Makes changes to the APR above ⅛ of a percent for most loans (and ¼ of a percent for loans with irregular payments or periods)
• Changes the loan product
• Adds a prepayment penalty to the loan

If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.

6. The Finish Line: Prepare for Closing
As closing day approaches, the closing agent orders any required updated information. Once the closing agent confirms with all parties, (the lender, the buyer and the seller), a final date for closing will be set, along with time and location of the closing.
On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.
 
This document provides a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described herein. For exact terms, conditions, exclusions, and limitations, please contact our office.