www.condomgmt.com VOLUME XX » NUMBER 183 » August 2011

FLORIDA EDITION

In this issue...» 2011 legislative updates» Section 8 ruling sheds new light on ‘Demand for Rent’ powers

» Changes in the law affecting condominium and homeowners’ association board eligibility

» House Bill 408 brings clarity to insurance challenges

Cover Story

Strategies for filing a property tax appeal - Turning negatives into positives

1August 2011 » Florida » CondoManagement

PUBLISHERMelanie L. Lange Mendez

EDITORIAL SUPPORTAmanda HallBeryl Lange

CIRCULATIONCarlos Mendez

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COVER STORy 4 Strategies for filing a property tax appeal

- Turning negatives into positivesBy Richard Westlund

» MAINTENANCE 13 HVAC in Florida summer: 10 pointers

By Steve Hirsch

» VENDOR gALLERy 15 J R Frazer Reserves &

Insurance Valuations

»COMMUNICATION 8 Affordable ways to boost

happiness, loyalty and motivation

By Todd Patkin

ALSO IN THIS ISSUE...»MISCELLANEOUS 9 National Correspondents’

Corner

21 Florida Correspondents’ Corner

21 Ad summary

FOCUS - LEgAL» LEgAL 2 2011 legislative updates

By Michael J. Brudny, Esq.

7 Call in the experts: Structural concrete cracks and the spector of litigation By Drew Robb

18 Legal Vendor Directory

» PAINTINg 6 Tips on painting weathered

wood By Debbie Zimmer

» INSURANCE 12 House Bill 408 brings clarity

to insurance challenges By Alan S. Chesler

»COLUMNS Florida Condo & HOA Insight:3 Section 8 ruling sheds new

light on ‘Demand for Rent’ powers By Donna DiMaggio Berger, Esq.

The Association Barrister:14 Changes in the law affecting

condominium and homeowners’ association board eligibility

By Peter S. Sachs

4 CondoManagement » August 2011

Cover story

STRATEGIES FOR FILING A PROPERTY TAX APPEAL TURNING NEGATIVES INTO POSITIVES

Barry sharpe believes condominium associations should consider appealing owners’ property tax assessments this fall. “If you can re-set the values even lower in 2011, the financial impact can be significant for many years to come,” said Sharpe, president of the Property Tax Appeal Group, LLC, in Miami, Fla. “Negatives about the property can be turned into positives that reduce your taxes.”

On or before November 1, both Florida and California counties will send tax notices to all property owners. Sharpe recommends that nearly all property owners should pay their taxes in November since states such as Florida offer early payment discounts. Before the tax notices are sent out, between the months of August and September, owners may appeal their property taxes for a small fee, typically $15 to $25. “If your appeal is successful, the county will re-issue your tax notice at the reduced amount, and if you previously paid your tax bill, the county will send you a refund check for the difference.

“A joint appeal filed on behalf of all condominium owners is often the most cost effective way to appeal the valuation of any condo-minium building,” Sharpe added. “The county can analyze the issues pertaining to the entire building during a single appeal, and make adjustments for individual units on an as-need basis. The collective power of the association is useful in the appeals process.”

Typically, the assessor’s office will use comparable sales from the prior year to determine current values. However, that approach doesn’t take into account the many other issues that can affect a property’s value, such as outdated kitchens and bathrooms, hidden structural problems, construction defects or a pending special as-sessment.

“Remember that the condition of the plumbing, roof, electrical, air-conditioning and mechanical systems are probably unknown to the property appraiser,” said Sharpe. “They all may adversely affect the value of the property and can be used to obtain further tax relief.”

One strategy is to ask a real estate agent to pro-vide an estimate of the current market value along with a list of the improvements and upgrades sug-gested for a rapid sale. If a unit needs $5,000 in up-grades, at the time of tax appeal, that amount should be subtracted from the assessed value, says Sharpe. “A contractor can be engaged to provide an estimate for big-ticket repairs, such as putting a new roof on a high-rise building. That cost can reduce the value of the affected units.”

Those types of strategies resulted in over $6.5 mil-lion in reductions for unit owners at The Charter Club

By Richard Westlund

Barry Sharpe

Paul Kaplan

5August 2011 » CondoManagement

in Miami in 2009. “Only a few of the owners opted out,” said Paul Kaplan, managing director of KW Property Management, which manages about 120 condominium buildings statewide. “Barry used some out-of-the-box ideas to show a magistrate why the values were overstated, with a very positive result for our owners.”

A shortage in the association’s financial reserves can also affect the value of owners’ units. At Ten Museum Park, a new upscale condo in Miami, the spa and amenities had not been finalized. “As a result, the owners were facing sharply higher assessments,” Sharpe said. “After ex-plaining the situation to the special master, there was a 27 percent re-duction in the assessed value.”

Any other factors that would affect a unit’s sale price – including a high number of foreclosures or delinquencies – can also be mentioned in an appeal, added Sharpe.

As Kaplan said, “In my opinion, we are now at the bottom of the mar-ket. That means it’s more important than ever to file an appeal this fall.”

Richard Westlund is an independent business writer in Miami, Fla. who covers a wide range of real estate, management, technology and finan-cial topics.