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Articles Posted in Real Estate Law Miami

Florida Property Insurers to Raise Rates


A vast number of property insurance providers in Florida have submitted legal requests to allow a double-digit rate increase which could reach 47%. The predicted downgrading in the financial ratings of some companies has sparked concerns leading to this request. As the State legislature gets ready to end current sessions, lawmakers are scurrying to have the reforms litigation passed. Contingency risk multipliers, which boost lawyer fees, would be targeted through bill HB 7071, which passed the House but was stalled in the Senate. According to a report in the Insurance Journal, many insurance providers in Florida may experience reductions in their financial ratings because of the ongoing struggles by companies when dealing with claims protocols and court rulings that differ from all other jurisdictions nationwide. As Joseph Petrelli stated to the Florida Record, “I don’t see downgrades or the litigation necessarily taking companies under. But what I do see in the level of litigation and types of (court) decisions that we’ve seen in the last six or seven years in Florida is the difference between ultimately for the companies being profitable and being unprofitable. But I don’t think it’s going to tank companies.” With the current financial scenario bleak for companies and their profit margins over the coming years, downgrades may not jeopardize their overall results. According to Petrelli, property owners may see a decrease in insurance options, but doubts Florida insurers will fail, with mergers and consolidations likely. He also states that short term rate increases will be large and benefit Florida insurers by giving them an improved foothold on Florida’s complicated situation when dealing with claims. According to Petrelli, insurance providers are in good shape and will be able to pay claims brought on by property owners.

From an Attorneys POV



With Miami-Dade County employee salaries averaging $50,000 a year, affordable housing seems to be weighing heavy on tenants struggling to make ends meet. According to recent studies, home values in Miami-Dade have rocketed by 66% compared to the 14% rise in worker wages over the ten-year period leading up to 2017. Though construction is evidently active in and around downtown Miami, modern price-tags target wealthy foreigners rather than members of the middle-class workforce. In fact, the 2019 State of the Nation’s Housing report by Harvard University states that low-rent housing availability (under $800 monthly) has fallen by 39% with a 2% drop in the number of low-income renters. The Harvard report goes on the say that 20% of new-single family houses constructed from 2007-2017 were valued at $200,000. According to this and other housing statistics publicly available, Miami renters allocate over 30% of their income to cover rent, which can average around $2,000 a month in modest neighborhoods such as North Miami. An executive director at Miami Homes For All stated in an interview that the crisis has spread and has affected the Miami-Dade middle and upper class and not just low-income families. With more than a third of monthly wages going towards rent, there is a shortage of available housing to those earning under $40,000 a year, which is just $10,000 less than the 80% of Miami-Dade county workers earn per year. In the meantime, though unemployment in the low-wage work sector has risen, the cost of real-estate and residential construction projects continue to rise. So where exactly should middle and lower income workers look to live within Miami-Dade county? And where should those looking to purchase a well-priced piece of real-estate shop? According to recent real estate reports for Miami-Dade county, cities such as Allapattah, Little Havana and Coconut Grove are expected to receive $7.5 million in funding to build affordable housing for the local Miami workforce earning between $30K-60K per year. According to statistics, the city facing the toughest affordable housing ordeals is Miami, which has the highest percentage of residents earning much less than the $50,000 yearly average salary. Housing reports state that there are some 85 housing units that fall under the Miami Beach scope, which include studio apartments priced at $740 per month in rental fees. According  to the a U.S. Census report, over 1 million residents, with an average income of some $60K, live in a separate sector of Miami-Dade. Unfortunately for middle and lower class households in Miami, rental fees for apartments and houses are expected to increase and not go down anytime soon.

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Aspiring homeowners and real-estate investors in Miami and throughout Florida, may soon have new options for purchasing real-estate through special mortgage loans called CHOICERenovation loans.  These loans aim to attract potential buyers that are interested in acquiring property that has suffered experienced significant damage from the nature’s wrath. Hurricane damaged homes for example, may have lost significant value and lay dormant in the real estate market for years. The loans may also appeal to individuals or real estate developers looking to renovate homes that are over 40 years old and in poor structural condition. Interestingly, and according to real estate statistics, one out of every five properties dates back to the mid-seventies. Though potential real estate buyers looking to relocate prefer homes that need little if not any remodeling or repair work, some are enticed by the lower costs of houses which may need plumbing, electric, or general repairs. The owners of houses that are old or run-down may also benefit from the new CHOICERenovation mortgage loans offered by Freddie Mac, which are expected to be available soon. But how do the new loans work and how do they benefit buyers? Firstly, the costs of any needed repairs will be included in the loan itself and any remodeling or repairs do not necessarily have to be done by a contractor. In other words, they can do the work themselves as long as they can prove they are qualified to carry-out home improvements jobs such as plumbing, electricity, roofing, etc.. This new proposal is expected to attract first-time buyers that have limited funds but willing to take advantage of property that is affordably priced. The loans may also appeal to those looking to remodel their current home in order to accommodate family members or renovate their old home so as to avoid moving and having to deal with the complexities of selling and buying real estate. In many cases, it can be less expensive and easier to remodel or renovate than to buy or sell, which will involve real-estate broker fees, property taxes, title insurance, and many other costs stemming from a real estate transaction. Nevertheless, when the opportunity of owning your home at affordable terms comes knocking, it might be wise to open the door.

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