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Letter to the editor

Check out contractors thoroughly

Benny Kass, Special to the Times

By Benny Kass, Special to the Times
Published November 3, 2007

A: Whether you are buying distressed property or any other property and you want to do construction/renovation, there are several things you should do.

Check with your county or state licensing office. Insist on seeing a copy of the contractor's license, and confirm with the agency that issued it that it is valid. You can go to myflorida.com/dbpr to verify a license with the Department of Business and Professional Regulation. Confirm that the contractor has worker's compensation.

Do not sign a "one-page special," a contract that is only one or two pages, especially if your renovation job will cost $5,000 or more. The Florida Home Builders Association posts a sample contract on its Web site, www.fhba.com. Click on "Consumer Services," then on "Contracts."

Your contract should include at least: a complete description of the work that will be done; the total cost; a payment schedule (do not overpay and keep 10 to 15 percent in reserve to pay when you are completely satisfied that the job is finished and acceptable to you); and a termination provision should you find that the contractor is not showing up on the job or not doing a good job.

You ask if you can enforce your time line. The answer is yes. I generally recommend that you agree to pay the contractor a bonus (to be determined between the two of you) for early delivery - say $100 a day up to a cap of 10 days. Include in the contract a provision that if the contractor does not complete the job on time, you will deduct $100/day, but with no cap.

Some contractors will accept the bonus-penalty concept, and it is clearly your right to insist on such a provision.

The inside scoop on REO properties

Q: What is the best way to buy real estate-owned properties (REOs, for short)?

A: When a bank forecloses on a mortgage, or when the bank takes back a homeowner's property by way of a deed in lieu of foreclosure (commonly referred to as a "deed in lieu"), the bank owns that property, and it is called an REO. Most banks do not want to own REO properties because it negatively affects their financial status. More importantly, they have to start paying insurance and real estate taxes, which banks really don't want to do.

Banks want to sell those properties as quickly as possible. How do you buy them? Many real estate agents and brokers have relationships with banks and may be able to assist. You can also talk to the banks directly to inquire about when they plan sales of REOs or which agents are listing the properties.

Do yourself a favor and retain a real estate lawyer to assist you. You want to make absolutely sure that you are getting a good, clean, insurable and marketable title with no clouds, no liens, no surprises.

Changing the rules at condominium

Q: I live in a condo. Before we bought our unit the board amended the bylaws to restrict rental of units to family members only. Is this legal?

A: You are subject to the rules and regulations, including any properly amended bylaws, such as a rental restriction. You should have received a copy of the condo documents before you bought your unit and should have reviewed them before you closed on your unit.

Case law throughout the country says that for rental restrictions to be valid, they must be incorporated into the declaration or the bylaws of a condominium and filed in the public record. Typically that means they have been approved by a supermajority vote of the unit owners. It is not sufficient for a board of directors to enact such a restriction simply through a rule change.

[Last modified November 1, 2007, 16:47:27]