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After a tenancy has been terminated or expired, and the premises have been vacated by the tenant through eviction, surrender, abandonment, or otherwise, a landlord may find himself in possession of abandoned personal property which remains on the premises. Although a landlord may be tempted to immediately sell or dispose of the abandoned property, he may be subject to liability if he does not follow the proper procedures outlined by Florida law. The Disposition of Personal Property Landlord and Tenant Act provides the necessary guidance to avoid liability under these circumstances. See § 715.10, F.S., et .
Any personal property left behind should be left on the premises or stored safely by the landlord. A landlord has a duty to exercise reasonable care in storing the property, but he is not liable to the tenant or owner of the property for any loss.
Florida Abandoned Property Notice – How to Use
The first step a landlord should take to properly dispose of personal property is to notify the tenant, and any other person the landlord reasonably believes to be the owner of the abandoned property, that such property remains on the premises. The notice should be in writing, and it should describe all of the property left behind. The description should be detailed enough so that the owner of the property can identify it.
The notice should also notify the owner of the property where the property is being stored (if not remaining on the leased premises), and that reasonable costs for storage may be charged before the property is returned. There should be specific information as to where the property may be claimed and the date before which claim must be made. Such date must be a minimum of ten or fifteen days away, depending on how the notice is served. The Florida Statutes provide sample notice forms that should be used.
If the owner of the property, or anyone reasonably believed to be the owner, pays the costs of storage and acts to take possession of the property on or before the date specified in the notice, the landlord should release the property.
When is Property Considered Abandoned in Florida?
If the owner of the property does not respond within the time frame allotted, the landlord may take action to sell or dispose of the property. If the abandoned property is estimated to be worth less than $500.00, the landlord is free to dispose of it however he would like. If the estimated value of the abandoned property exceeds $500.00, the landlord should arrange for a public sale of the property at the nearest suitable place to where the property is held or stored. Before the sale may occur, notice should be published once a week for two consecutive weeks in a newspaper of general circulation where the sale is to be held. The advertisement should include the name of the former tenant, a description of the property to be sold, and the time and place of the sale.
A landlord is permitted to bid at the public sale. The successful bidder’s title to the property is subject to ownership rights, liens, and security interest which have priority by law. After the costs of storage, advertising, and the sale have been deducted from the proceeds of the sale, the balance may be claimed by the tenant or property owner within thirty (30) days. If the funds are not claimed, they must be paid into the county registry. At that time, the landlord should be relieved of all further obligations regarding the abandoned property.
There may be similar circumstances where someone is looking to dispose of personal property even when the parties are not connected through a traditional landlord-tenant relationship. Although Chapter 715, Florida Statutes, does not expressly state whether this procedure applies in a situation not involving a landlord and tenant, it would seem reasonable to follow this procedure before disposing of unwanted property in order to avoid liability. It should also be noted that Florida law provides a separate procedure for items abandoned on public property, which involves law enforcement taking possession of the items and auctioning them. See Chapter 705, Fla. Stat.
This article provides an overview of the process for a landlord to dispose of property left at the premises by a former tenant. You should contact an attorney to determine whether this process is appropriate for your individual situation, and to obtain all of the information necessary to ensure compliance with applicable Florida law.
Under Florida law and as a matter of public policy, settlements are highly favored and will be enforced whenever possible. Settlement agreements are governed by the rules of contracts, and the existence of an enforceable contract is contingent upon the Parties’ agreement to the essential terms of the agreement. What happens when you think you have a settlement agreement, but the other party refuses to sign a formal written settlement agreement?
Is a formal written agreement required to enforce a settlement in Florida?
Creating an enforceable settlement requires agreement to the essential terms of an agreement. What constitutes a material or essential term varies from cases to case. Nevertheless, once the parties reach an agreement on the essential terms, a formal written agreement is not required in order to enforce a settlement. Numerous courts in Florida, both state and federal, have enforced agreements reached through a series of emails between attorneys.
For example, in Warrior Creek Development, Inc. v. Cummings, 56 So. 3d 915 (Fla. 2d DCA 2011) the attorneys involved negotiated a settlement over e-mail. Their emails set forth the “essential and material terms” of the agreement between the parties. The attorneys subsequently drafted a written settlement agreement, which one party refused to sign, stating “the deal is off”. The Second District Court of Appeals affirmed the trial court’s order enforcing the settlement, finding that the “parties had agreed upon all of the essential and material terms for settlement and that those terms were reflected in the November e-mail. Similarly, in Miles v. Northwestern Mut. Life Ins. Co., 677 F. Supp. 2d 1312, 1315-1317 (M.D. Fla. 2009) the Court held that a written settlement agreement is a mere formality where the parties act with the intent to follow the settlement and the written agreement is essentially what was already agreed upon.
Negotiating a settlement over email – the considerations
These cases illustrate the risks inherent in negotiating a settlement over email. A party who wants to avoid being bound in the absence of a written settlement agreement should consider making any offer conditional upon the execution of a mutually agreeable settlement agreement and release. Conversely, setting out the essential terms of an agreement in a written communication can result in a settlement that is enforceable against a party who has gotten cold feet.
Shuffield Lowman attorney Jordan Horowitz also contributed to this post
In December of 2017, the U.S. Congress established the Qualified Opportunity Zone (“QOZ”) program, designed to help economically-distressed communities where new investments, under certain conditions, may be eligible to generate preferential tax treatment for investors. Investments made in these designated QOZs through a qualified legal entity referred to as Qualified Opportunity Fund (“QOF”) are intended to provide much-needed new investment and capital into economically depressed communities throughout the United States and Puerto Rico. In short, the QOZ program is an economic development tool designed to spur economic development, revitalize communities in need, and create jobs in distressed communities by attracting new investments in exchange for select income tax benefits.
In general, here is how the QOZ program operates. If an investor disposes of assets (e.g., stocks, real estate, an operating business), on or after Dec. 22, 2017, which triggers taxation of capital gains to the investor, then such investor may seek to utilize the QOZ program. The investor can either create or locate a QOF to invest a portion of its transaction proceeds (e.g., cash) within 180 days of the divestment (sale) transaction date. Once capitalized, the QOF must, in turn, invest a certain minimum amount of its assets (directly or indirectly) into an operational business or real property located in a QOZ. The QOF oversees and manages the investment in the QOZ until the QOF decides to divest from the QOZ investment at a future date. In exchange for this QOZ investment, the QOF receives certain income tax benefits that it passes along and up-the-chain to its owners and investors.
As you can imagine, the rules and regulations governing QOZs and QOFs are complicated and require detailed analysis; the previous paragraph is a rather simple summary of a QOZ transaction. Below is a list of some very important highlights to keep in mind when considering an investment using the QOZ program.
- The QOZ program is designed to provide three (3) tiers of income tax benefits to investors:
- The investors can defer income taxation on prior capital gains that are invested in a QOF until the earlier of December 31, 2026 and the date on which the investment in a QOF is relinquished (known as the capital gain deferral piece).
- If the investor holds the investment in the QOF for longer than 5 years then there is a 10% bonus exclusion of the deferred income taxation on the prior capital gains. If the investor holds the investment in the QOF for longer than 7 years then the bonus exclusion bumps up to 15% (known as the tax basis step-up piece).
- If the investor holds the investment in the QOF for no less than 10 years, then the investor is eligible to liquidate or cash-out from the QOF free of income taxation on any new tax gains generated from appreciation of this QOF investment (known as the non-recognition of new taxation piece).
- Only capital gains (although both long-term and short-term) are eligible for deferral under the QOZ program. Ordinary income (non-capital gains) is not eligible for deferral under the QOZ program. However, all capital gains are eligible for roll-over into a QOF. The QOZ program is not limited to gains from real estate, stocks or any specific asset or transaction, and a pot of various sources of capital gains can be used to invest in a QOF. In other words, an investor can dispose of many different assets in various transactions and trigger capital gains from these items, and then invest all (or a portion of) these capital gains into a QOF to receive the income tax benefits.
- An investor can defer payment of capital gain taxation to the latest date of Dec. 31, 2026, so long as such prior capital gains are invested into a QOF within 180 days of the divestment (sale) transaction that triggered the tax gain. The S. Internal Revenue Service (“IRS”) clarified that the clock for the 180-day period for investing the capital gains in the QOF begins for most taxpayers on the date the capital gains would be recognized for U.S. federal income tax purposes. For individuals, this rule means the date on which the dispositions of assets trigger capital gains taxation. For partnerships, the 180-day period begins to run on the date the partnership disposes of assets triggering capital gains taxation. But, if the partnership does not reinvest its capital gains in a QOF, then the partners may reinvest their allocable share capital gains, and the 180-day period for each partner begins on the last day of the partnership’s tax year in which such disposition of assets occurred. This partnership rule also applies to S corporations (but not C corporations).
- Only the amount of the capital gains must be invested into a QOF to defer all the income taxation related to them. There is no requirement that all cash received by an investor from the disposition of assets must be reinvested in a QOF to receive the income tax benefits; just an amount of assets (e.g., cash) equal to the amount of the prior capital gains.
- Think of a QOF as an investment vehicle, whether a partnership or a corporation, that acts as the funnel for the various investors to collect money and other assets to invest it into the QOZs. The QOF can be a new or existing entity, and could be an entity created by the investor solely to invest its money and assets. A QOF becomes qualified with the IRS by self-certifying that it is a QOF and filing IRS Form 8996 (Qualified Opportunity Fund) with its federal income tax return. For example, a QOF could be a newly-formed Florida limited liability company that is organized by the investor, capitalized by the investor and at least one other person, taxed as a “partnership” for U.S. federal income tax purposes, and invests its money by acquiring QOZ property.
- The QOF must acquire, own and hold QOZ property to generate the income tax benefits. However, the QOF is not required to utilize all its cash and assets to acquire, own and hold QOZ property, but there is a minimum threshold that must be satisfied by the QOF. Also, there are strict limitations and rigorous requirements surrounding the QOZ property acquired, owned and held by the QOF.
- Current operating income generated from an investment in a QOF is subject to income taxation, and does not receive any special tax exceptions or tax exclusions.
- An investor does not need to live, work or have a business in a QOZ to receive the income tax benefits. All the investor must do is invest prior capital gains into a QOF and elect to defer the taxation on such capital gains pursuant to the U.S. federal tax code.
- For an investor to receive the full array of QOF taxation benefits, the latest date (according to the current S. federal tax code requirements) by which capital gains must be invested into a QOF is Dec. 31, 2019.
- For an investment to comply with and satisfy the requirements of the QOZ program, the investment must be an equity ownership interest in the QOF. Loaning money to a QOF (i.e., debt instruments) is not an eligible investment for purposes of the QOZ program.
- The income tax benefits generated by the QOZ program are not mutually exclusive of other tax benefits under the S. federal tax code, such as New Markets Tax Credits (NMTCs), Low-Income Housing Tax Credits (LIHTCs), and section 1031 like-kind exchanges (assuming some capital gains are triggered by the transaction). The QOZ program could be combined with other programs.
- The QOZs were designated by the Governor of Florida prior to March of 2018, and QOZs represent specific “census tracts” located within low-income communities. Here is a website link to a map showing the various QOZs within the State of Florida:
As you can see, the rules and regulations governing QOZs and QOFs are complicated and require very detailed analysis. All facts and circumstances should be taken into consideration when considering, and prior to making, an investment into a QOF using the QOZ program. Should you have any questions regarding the QOZ program, please feel free to contact Nathaniel Dutt, Esq. at ndutt@SLLaw.com or Jordan Horowitz, Esq. at jhorowitz@SLLaw.com, or either at 407-581-9800.
Many community association declarations contain restrictions on the parking of vehicles on streets located within the community. For communities that contain private streets maintained by the association, it seems clear that these restrictions would be enforceable. However, for communities that contain public streets, the enforceability of those restrictions is not so clear.
There appears to be no reported decision by a Florida appellate court dealing with the issue of whether a community association can enforce restrictions purporting to prohibit parking on public streets. However, that may soon change.
A trial court, in Pinellas County, has ruled that a homeowners association cannot enforce such parking restrictions relating to public streets. That case arose from the filing of a lawsuit by the impacted owners which sought the entry of an injunction prohibiting the association from enforcing a parking restriction relating to public streets. The trial court granted that injunction. The association that was a party to that case filed an appeal with the Florida Second District Court of Appeal. In Woodfield Community Association, Inc. v. Ortiz by and through Ortiz, 2018 WL 3403387 (Fla. 2d DCA 2018), the appellate court set aside the injunction, but only on the basis that the trial court’s order failed to include certain information needed to support entry of an injunction. The appellate court did not discuss the underlying issue of whether the injunction would have been sustained, on its merits, had the trial court listed the necessary information. Instead, that issue would need to be presented to the appellate court by the filing of a new appeal after the trial court enters a new order.
If such an order is entered by the trial court and the association files another appeal, Florida’s Second District Court of Appeal will be in a position to author the first Florida appellate court opinion as to the enforceability of parking restrictions relating to public streets.
There are at least 3 reported decisions, from out-of-state appellate courts, that have addressed this issue. In one of the cases, Raintree of Albemarle Homeowners Association, Inc., 413 S.E. 340 (Va. 1992), the court ruled that such restrictions could not be enforced. In the other two cases, Maryland Estates Homeowners’ Association v. Puckett, 936 S.W. 2d 218 (Mo. Ct. App. 1996); and Verna v. The Links at Valleybrook Neighborhood Association, Inc., 852 S. 2d 202 (N.J. Super. Ct. App. 2004), the courts ruled that such restrictions could be enforced, at least as to owners in the community.
The argument to support a finding that these restrictions are not enforceable is that an entity, such as a community association, does not have the authority to control access to or the use of a road that is owned by a municipality. The argument to support the enforceability of these restrictions is that parties, such as an association and its owners, are free to enter into a contract (the recorded deed restrictions) containing restrictions that would impose greater limits on an owner’s use of property than those imposed by governmental restrictions.
In honor of Elder Abuse Awareness Day on June 15th, ShuffieldLowman’s Alex Douglas was recently featured on The Florida Bar Podcast to speak about different forms of elder abuse and what people can do to protect themselves and their loved ones. Listen to this episode to hear about the different resources available, including the elder abuse hotline, and to learn about the complexities of guardianship. Alex practices in the area of fiduciary litigation with extensive experience in trust, probate and guardianship litigation.
To listen to the podcast visit the Legal Talk Network website: https://legaltalknetwork.com/podcasts/florida-bar/2018/06/2018-annual-florida-bar-convention-elder-law-update/
Congress recently passed the Tax Cut and Jobs Act (“TCJA”) earlier this year, the largest revision to the tax code in thirty (30) years. Among the many changes are significant increases in the Estate, Gift, and Generation-Skipping Transfer (GST) tax exclusion amounts. In effect, this means that fewer families will be subject to such transfer taxes and that many estate plans will need to be updated to properly address the new law. The changes under the TCJA present an important opportunity for high net-worth individuals and families to review their current estate planning documents and ensure that their plan is properly tailored to achieve their goals.
Overview of Changes
The most significant change is the doubling of the unified Estate and Gift tax exclusion amount – the combined amount that individuals can give away during life or at death before paying transfer taxes – from $5.59 million to $11.18 million per person. The new tax law also preserves “portability,” a surviving spouse’s ability to retain any estate or gift exclusion unused by a deceased spouse, meaning that for married couples, the exclusion is effectively $22.36 million. This exclusion is inflation adjusted, but current law provides that this doubled exclusion sunsets December 31, 2025, after which estate taxes are slated to revert to current levels.
The new law also increases the amount each person can make exempt from the GST tax. As with the estate and gift tax exclusion, the new GST exclusion will increase from $5.59 million to $11.18 million per person (in 2018 as indexed for inflation). Unlike with the estate and gift tax, however, there is no “portability” for GST taxes. Thus, each spouse must use their own GST exclusion before they pass.
In addition to the changes made by the new tax bill, 2018 also brings a routine increase in the annual exclusion from the Gift tax to $15,000 per person, per year. This annual exclusion allows each individual to make a gift of $15,000 to any other individual (and in some cases trusts) without reducing their lifetime Estate and Gift tax exclusion amount.
Review of Your Estate Plan
The changes in the Estate, Gift and GST tax law mean that many estate plans should be revised to take advantage of tax changes, ensure existing tax formulas still achieve the intended results, or simplify complex planning that is no longer necessary and shift a focus towards income tax planning for beneficiaries. There are also certain planning opportunities that you may want to explore.
First, the increased exclusion amount may be an opportunity to unwind complex planning that may no longer be needed to minimize transfer taxes. For instance, many estate plans created under assumptions of prior law provide that at the death of the first spouse, the deceased spouse’s assets are divided into two (2) separate trust shares: a Marital Trust for the benefit of the surviving spouse and a Credit Shelter Trust that may benefit the surviving spouse, your children and/or grandchildren, or combinations of those people. For married couples with large estates, this technique defers payment of any Estate tax until the passing of the second spouse. The trade-off is that the Credit Shelter Trust may not benefit the surviving spouse solely and the income tax basis of the Credit Shelter Trust is locked into place upon the first spouse’s death. Many couples who used such techniques to minimize Estate tax prior to the new increased exclusion amounts will prefer for the surviving spouse to retain greater control of assets and plan for the remainder beneficiaries to receive a step-up in income tax basis for all of the assets upon the surviving spouse’s passing. ShuffieldLowman can assist you with weighing that control over the asset protection and the certainty of the Credit Shelter Trust to determine what is best for each family.
As mentioned above, another scenario involving Marital and Credit Shelter Trusts may play out in other plans containing “formula gifts.” Certain estate plans leave assets up to the Estate tax exclusion amount to a Credit Shelter Trust for the benefit of children or grandchildren and leave assets in excess of that amount to a Marital Trust for the benefit of the spouse. Because the Estate tax exclusion amount is now so large, this could mean unintentionally disinheriting the spouse and leaving all assets to the Family Trust or just leaving significantly less to the surviving spouse than intended.
Next, we do not know if the federal increased exclusion amounts will not be extended and will in fact expire in 2025, which is what the TCJA provides. Under a subsequent administration the exclusion amounts may even return to the lower levels of the past that existed for most of the 2000s. If either of these events does indeed occur, then the current increase in the exclusion amounts provides a temporary, “use it or lose it” opportunity to transfer assets outside your taxable estate, thereby “locking in” the current exclusion amount before it is reduced and freezing values from future appreciation. This estate tax planning might involve increased contributions to Irrevocable Trusts such as Irrevocable Life Insurance Trusts, Intentionally Defective Grantor Trusts (IDGTs), sales to these types of trusts, forgiveness of intra-family promissory notes, or other wealth transfer vehicles. You may want to consider further planning using the increased exemption amounts to remove assets from the estate.
Finally, some clients may even wish to use the increased exclusion amount to unwind prior planning and bring assets back into their gross estate to obtain a step-up in basis in those assets to fair market value at the time of their death. This type of planning is geared toward reducing income tax liability of your beneficiaries upon the sale of the inherited assets.
These are just a few examples of the many ways in which the TCJA may affect your estate plan. The TCJA makes significant changes to the Estate, Gift and GST tax regimes. If your estate plan was implemented under previous law, it would be beneficial to review your plan to ensure it accomplishes your current goals in light of these changes. If you would like a comprehensive review of your estate plan, contact ShuffieldLowman today.