Buying a Home in the Florida Keys:

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1 1 Buying a Home in the Florida Keys: As you may be aware, the environment that makes the Keys so attractive to thousands of people is a fragile environment that requires considerable attention to protect its health and beauty. This fact has created a requirement for close management of all activities that have or might have negative impact on the environment now or in the foreseeable future. The result is a number of "unique to the Keys" regulations and procedures concerning property ownership. They are provided for information purposes of broaden your understanding of what is invalided when purchasing property in the Keys. Information unique to buying a home in the Florida Keys Coastal Barrier Resources System Act (CBRS): Certain properties in Monroe County may be affected by the Federal Coastal Barrier Resources System Act or proposed amendments. For information contact the United States Department of the Interior, the Monroe County Planning Department or your legal representative. Property so designated is not eligible for federally subsidized flood insurance as well as other benefits. Federal Emergency Management Agency (FEMA) FEMA s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards. FEMA Flood Zone Designations Flood zones are geographic areas that the FEMA has defined according to varying levels of flood risk. These zones are depicted on a community's Flood Insurance Rate Map (FIRM) or Flood Hazard Boundary Map. Each zone reflects the severity or type of flooding in the area. FLOOD ZONE DESCRIPTION V VE, V1-30 A AE Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30-year mortgage. No base flood elevations are shown within these zones. Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones. Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. Because detailed analyses are not performed for such areas; no depths or base flood elevations are shown within these zones. The base floodplain where base flood elevations are provided. AE Zones are now used on new format FIRMs instead of A1-A30 Zones. A1-30 These are known as numbered A Zones (e.g., A7 or A14). This is the base floodplain where the FIRM shows a BFE (old format). Base Flood Elevation (BFE): The elevation of surface water resulting from a flood that has a 1 percent chance of equaling or exceeding that level in any given year. It is the lowest elevation where new habitable space may exist as measured to the top of the floor in an AE Zone and to the bottom of the lowest structural beam supporting the flooring in a V zone as measured above published datums. Required elevations are depicted on Flood Maps published by FEMA.

2 2 National Flood Insurance Program (NFIP): The program of flood insurance coverage and floodplain management Flood Insurance: The buyer must determine the insurability of the property against flood damage by seeking the advice of a qualified insurance agent. Structures built before January 1, 1975 (pre-firm) are subject to rules governing substantial and non-substantial improvements to pre-firm structures which may limit the reconstruction, rehabilitation or addition to the pre-firm structure. Structures built after January 1, 1975 that has enclosures below the Base Flood Elevation (BFE) are typically not habitable. The existence of habitable space below the BFE may require demolition or an increase in insurance premium. Buyers should contact the Monroe County Federal Emergency Management Coordinator or the City of Key West, City of Key Colony Beach, City of Layton, City of Islamorada and City of Marathon to ascertain how these rules may impact on the property of interest. Non-Conformities: Structures and uses that do not conform to uses provided for in the land use category that the property or use is located in are considered non-conforming. Such uses and structures are currently allowed to continue but they are not allowed to be expanded, enlarged or continued if substantially destroyed (more than 50% of the value of the structure). Zoning together with the uses provided there under which do not conform to the future Land Use Designations are considered non-conforming. Furthermore, nonconformities are jeopardized if abandoned. Buyers should to seek legal counsel or consult with the Monroe County Planning and Zoning Department to determine whether a property is non-conforming today or may be in the future. Downstairs Enclosures: All of Monroe County is identified as a coastal floodplain and may be subject to flooding. Monroe County enforces a Floodplain Management Ordinance. Structures built after December 31, 1974 must have the lowest floor elevated to or above the base flood elevation. Legally permitted enclosures constructed after below the base flood elevation are for limited storage and parking only. Open and Expired Building Permits & Code Violations: is a situation that occurs in the Florida Keys some of which may have been opened for work initiated a number of years ago and, which for a variety of reasons, were not closed out or have expired. I will presents this information so you will have an understanding of the potential impact of and the options available to an owner of a property or a purchaser interested in a property that has Open and/or Expired Building Permits or Code Violations on record within the unincorporated or incorporated areas of Monroe County. Land Use Disclosure: Due to the unpredictable and constantly changing status of the municipal, county and state regulations for property developments in Monroe County each buyer should contact the appropriate local government department(s) to determine how the subject property may be affected by the Comprehensive Plan and the action necessary to ensure compliance with the plan. Additionally, a property may be affected by restrictive covenants in the form of deed restrictions, Homeowners Association Rules & Restrictions, etc. Every Buyer needs to inquire about them. They also should inquire into state and local governmental zoning and land use regulations and restrictive covenants to determine whether the subject property is in compliance with all state and local government laws, codes and ordinances, and restrictive covenants. Monroe County Growth Management Division, Key Colony Beach Building & Zoning, City of Key West, City of Layton, City of Islamorada City of Marathon, Species Focus Areas & Permit Referral Process: The Species Focus Areas (SFAs) or Species Buffer Areas (SBAs) are areas of potentially suitable habitat, as determined by the FWS, for nine federally protected species: Eastern Indigo Snake, Key Deer,

3 3 Key Largo Cotton Mouse, Key Largo Woodrat, Key Tree Cactus, Lower Keys Marsh Rabbit, Schaus Swallowtail Butterfly and Silver Rice Rat and Stock Island Tree Snail. Permit Referral Process (PRP) If the subject property is on the list and you plan on building or adding on you should contact the Monroe County Growth Management Division, Michael Roberts, Senior Administrator of Environmental Resources at or Scott Fraser, FEMA Coordinator/Floodplain Administrator for the City of Key West at to inquire about the latest information on the Permit Referral Process and how it affects development for that property. Radon Gas: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. Pursuant to (8), Florida Statutes. Energy Efficiency Rating: The Purchaser may have the Energy Efficiency Rating of the building determined at buyers expense by a person certified by the Department of Community Affairs. Concrete Disclosure: Spalling This has caused a condition known as Spalling which results from the rusting and expansion of steel rebar which reinforces the concrete. Sewage Disclosure Form: The City of Marathon and unincorporated Monroe County have taken steps to upgrade to central sewer systems. For questions regarding the timing of the upgrades or estimated hook-up fees, contact: Monroe County Health Department 3333 Overseas Highway Marathon, FL (305) OR- City of Marathon Overseas Highway Marathon, FL (305) Lead Base Paint Warning: For homes, apartments or condominiums built prior to Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligent quotient, behavioral problems and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller s possession and notify the buyer of any known lead-based paint. A risk assessment or inspection for possible lead-based paint hazards is reconverted prior to purchase Central Sewage: All areas of the Florida Keys have been mandated to upgrade to a central sewage disposal systems by July I can assist you in determining if the property you are interested in has been upgraded. Properties not currently connected to central sewage may have a septic tank, cesspit or an aerobic system which is required to have a maintenance contract. WHAT NEXT - AFTER YOU FIND YOUR PERFECT KEYS HOME Inspections: They normally include an onsite inspection of the physical structure, the systems and built-in appliances. Depending upon the terms of the contract, you may also have inspections for the roof, the foundation, hazardous substances, pool and spas, fireplaces, dockage, seawalls, termites and other wood destroying

4 4 organisms, septic tank and any fixtures remaining with the home. Inspections are at the buyer s expense and must be completed in the time frame specified in the contract. After completion of the inspection an addendum is prepared to specify any defective items you would like the seller to repair prior to settlement. Cosmetic items and normal wear and tear are not the seller s responsibility. The inspector may advise you that some items in the home may need replacing in a few years. The inspector may also make recommendations for preventive maintenance. The selection of inspectors is your decision. If you like we will provide you with a list which may help you but it is by no means inclusive of every inspector. Remember the inspectors should be licensed in the state of Florida. Make sure you are comfortable with your inspector and familiar with his background. Title Insurance: Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults. Another difference is that you pay a one-time premium. A title insurance policy will protect you from risks or undiscovered interests. There are two principal forms of title insurance: the lender s policy and the homeowner s policy. A lender s policy protects the mortgage holder. If there is a fault in the title that results in a loss, the mortgage holder will be paid back. A homeowner s policy protects you, the purchaser, against a loss that may occur from a fault in your ownership or interest you have in the property. You should protect the equity in your new home with a title policy, which protects you from financial loss due to demands that may be charged against the title to your home and pays legal costs if the title insurer has to defend your title against a covered claim. Payment of a successful claim against the title to your home is covered by the policy. Appraisal: An appraisal is a third-party estimate of the value of a piece of property at a particular point in time. It can affirm your offer price or block your transaction entirety. Understand how real estate appraisals and appraisers work so you can solve any problems that come up. All appraisals must confirm to guidelines set by the Federal Reserve, but every appraisal is ultimately a subjective analysis of a property s current market value. True market value can be difficult to ascertain in markets where prices are volatile and properties vary widely. To determine current market value, an appraiser will compare the price of your home with that of at least three comparable homes that are in the area and have sold within the past six months, then adjust for differences in the properties. An appraiser will physically measure and inspect the home (which doesn t qualify as a home inspection) to compare, and may also take photographs to include in the report with floor plans and a site map. Utilities: Your Coldwell Banker Schmitt agent will provide a list of utility companies to contact to have the utilities turned on after closing. You will need proof of ownership, i.e. the deed to turn the utilities on. In unincorporated Monroe County, garbage pickup is a function of the county or village in which you reside. If you are buying a new home, the utilities cannot be turned on until the certificate of occupancy is issued. Hazard Insurance: Your lender will require windstorm/flood and homeowners policies naming them as an additional insures and loss payee. Have your insurance agent contact your lender and the closing agent. Discuss with the insurance agent any additional riders for jewelry, collections, furniture renter s insurance, etc. Bring a paid receipt for your insurance to closing along with a copy of the policy for the lender. In most areas of Monroe County, flood insurance will also be a requirement check with your lender. Insurance cannot be bound if a hurricane is within specific geographic boundaries. For that reason, you will want to obtain insurance as soon as possible to not delay closing on your property.

5 5 Home Warranties: There are several programs available which insure your systems, appliances, plumbing, etc. for a period of one year for a minimal fee. Your Coldwell Banker Schmitt agent will be happy to go over them with you. Walk Through: Normally conducted with-in 48 hours of closing, the walk through is to make sure the home is in the same condition as when you signed the contract plus the completion of any repairs agreed upon in the contract. Closing Costs: Upon closing of a real estate transaction, a buyer will incur closing costs, which may include: attorney fees, title insurance fees, abstract charges, tax fees, survey charges, tax fees, survey charges, discount points, mortgage transfer fees, escrow fees, condominium maintenance and assessment and origination fees. The settlement agency will provide you an estimated amount prior to closing. Payment of the closing costs requires a certified check or funds wired to the settlement agent prior to closing. Homestead Exemption: You will need to file your Homestead exemption prior to March 1. If you do not file, your taxes will be higher. Most likely you will need to go to the courthouse to file. Bring a copy of your closing statement and your warranty deed. Miscellaneous: In Florida, you must change your driver s license within 30 days of moving to the area. A requirement to obtain a Florida license plate is proof of insurance. Also, children under 4 must be in a car seat and use of seat belts is mandatory in Florida. Motor cycle helmets are not mandatory so be careful!