Year-End Checklist for Real Estate Owners in Florida

The end of the year presents an excellent opportunity for Florida real estate owners to review their portfolios and make sure that they are legally and financially ready for the upcoming year.

Florida real estate owners should take proactive steps, such as verifying property taxes and updating insurance policies, to avoid expensive mistakes or legal problems in the upcoming year.

The following is a cursory year-end checklist to help Florida real estate owners avoid common mistakes and ensure their real estate investments are secured in the new year.

1. Verify Property Ownership Records and Property Deeds

The end of year is also a perfect time to verify that property deeds are correctly executed and recorded to reflect the current ownership of the property. Common problems to be aware of are:

• Accuracy of Spelling of Names: Scrivener’s errors such as misspelling of names are not only annoying, but they can also be costly to fix. Making sure that all names are properly reflected on governing deeds helps avoid delays in future transactions or legal disputes.
• Update Ownership Records: When property is transferred to or from revocable trusts, business entities or other family members, it is important to confirm that the transferring deeds are property recorded. Further, if an owner is deceased, it is important that the proper steps are taken to ensure that current ownership is updated. It is important to note that this process may involve probate or trust administration!
• Confirmation of Joint Ownership: Co-owners’ interests in real estate property may vest as tenants in common or joint tenancy (with or without rights of survivorship). It is important that these ownership structures still align with the intentions of the co-owners and are amended accordingly at the beginning of the year if they do not.

2. Verify Property Taxes

In Florida, real estate taxes come due in November of the year the tax is assessed and can be paid through March 31 of the following year without being considered late or in default. However, the earlier the taxes are paid, the greater the discount afforded.

For example, if property taxes are paid in November of the year they are due, then a 4% discount is given. This discount is reduced by one percent each month through the following February, with the total amount due by the end of March. Therefore, the sooner a real estate owner pays their yearly taxes, the cheaper it will be.

To maximize this saving opportunity and to avoid the assessment of penalties for late payments, it is important for Florida real estate attorneys to verify their tax bill through the appropriate county’s tax collector’s website for accuracy of valuation and exemptions.

If applicable, it is important to confirm that all homestead, senior citizen and disability exemptions apply to each year’s tax bill.

3. Updating Homeowners’ Insurance

Making sure the real estate insurance policies are up to date is a critical step for any homeowner – particularly in Florida! Notifying insurance coverage providers of any changes such as renovations or an increase in security systems is important to keep costs and coverage up to date.

Further, since unexpected disasters can strike at any time, it is important to confirm that homeowner insurance coverage is sufficient to cover the following:

• Replacement Costs: confirm that the coverage for replacement costs reflects the current construction of the structure, as well as accounts for any changes in market conditions.
• Natural Disasters: as Florida is known for hurricanes and the potential for flood, it is important to ensure that each property has appropriate coverage, including flood insurance if the property is in a flood zone. To determine if a property is within a flood zone, a flood certificate can be obtained.
• Liability Coverage: one of the primary functions of homeowner insurance is to insulate an owner from liability that arises from accidents on the property itself. As one’s personal exposure increases, it is advisable to increase liability coverage to match.

4. Rental Property Compliance

Staying compliant with the various state, local and federal laws and regulations related to rental properties is essential to ensuring a successful year ahead. To maximize your protection, it is important to address the following:

• Make sure to have a valid lease agreement that complies with Florida landlord-tenant laws and accurately identifies rental payment amounts, security deposit amounts and other important terms between the parties.
• Conduct safety inspections on the property to check for potential hazards to minimize and avoid potential liability. Smoke detector functionality, mold detection or remediation, as well as addressing structural issues are all very important to minimize homeowner liability.
• Formal tenant applications and background checks that comply with Fair Housing laws are also very important for landlords.

5. Evaluate Personal Estate Planning Needs

Much of estate planning involves verifying property ownership. End-of-year audits should include the review of beneficiary designations, as well as updating wills and trusts. 

6. Review Condominium or Homeowner Association Rules and Regulations

Properties that are part of an Association have ongoing rules, regulations and dues that must be addressed yearly.

It is important to make sure that all outstanding fees, including regular and special assessments, are paid to avoid fines or liens on the property. 

Property owners should also review any changes to the Association’s rules that may potentially affect the property itself or common areas. 

Regular review of Association meeting minutes also helps owners understand decisions that may impact their ownership such as the property’s value or usage. 

7. Assessment of Investment Property Performance

Year-end is a crucial time to evaluate the financial health of a real estate portfolio for investment property owners.

During this time, they must consider reviewing past rental income, maintenance costs as well as tax implications.

Market conditions and regional valuations should also be considered to determine future investment or sales.

This step typically requires the involvement of a tax advisor and accountant to make decisions in the property owner’s best interests.

8. Prepare for Property Renovations

For property owners planning on renovations during the upcoming year, it is important to confirm if permits are required and, if so, obtain them, verify that contractors have valid licenses and insurance coverage, and ensure that any plans comply with HOA regulations and local zoning laws.

9. Document and Record Property Improvements

Proper documentation of property improvements may support depreciation claims or increase in property market value for tax calculations purposes.

Property owners should make sure they keep track of receipts and invoices for renovations, repairs and maintenance.

Taking photographs of the before and after images of improvements is also beneficial.

10. Addressing Boundary or Title Disputes

Addressing unresolved disputes over property boundaries is an important year-end concern. Proactive steps such as verifying possible encroachments do not infringe on neighboring properties or resolving any liens and encumbrances are important to minimize legal disputes in the upcoming year. 

11. Stay Informed about Local Legal Changes

Real estate regulations are ever-changing, so staying informed can avoid legal problems. Property owners should regularly monitor tax law changes (both at state and federal levels), environmental regulatory changes, as well as changes related to the landlord-tenant relationship (such as eviction procedures).

12. Natural Disaster Preparedness Planning

Florida’s vulnerability to hurricanes and floods makes disaster preparedness a year-round priority. Property owners should make sure to do the following to maximize preparedness:

• Protect Property Records: by storing important documents, such as deeds and insurance policies, in a waterproof and fireproof safe.
• Create an evacuation plan by familiarizing yourself with evacuation routes and local shelters. 
• Stock up on Emergency Supplies: such as water, non-perishable foods and batteries.

13. Consult with your Professionals

Working with a professional can help save time and money, as well as minimize stress regarding real estate ownership. Property owners should regularly consult with and engage their professionals to assist with the following:

• Providing legal advice, such as reviewing contracts, resolving ownership or encroachment disputes, as well as ensuring compliance with various laws.
• Consulting with a CPA to help maximize deductions and reduce tax liabilities as much as possible.
• Discussing with a financial advisor to include any real estate holdings as part of one’s broader financial goals.

Conclusion on the Year-End Checklist for Real Estate Owners in Florida

An end-of-year audit is a great opportunity to ensure real estate assets are secure, legally compliant and aligned with one’s personal estate planning and financial goals.

This checklist is a great starting point for Florida homeowners to avoid legal pitfalls and increase the potential benefits of property ownership. To learn more about how we may help with your real estate needs, contact us here.