Tax Deed Sale or Tax Deed Fail?

By: Anthony A. Velardi, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Q: I’d like to purchase property at an upcoming Tax Deed sale. What do I need to do, and what should I be aware of?

A: Prior to the Tax Deed sale, you’ll need to visit your local Clerk of Court’s website to register and place a deposit which is typically the greater of $200 or 5% of your maximum bid and should be made by electronic check or wire transfer. For example, you should deposit $2,500 if you intend to bid up to $50,000. If you wish to purchase the property with an LLC or other entity, you should form the entity well in advance of the Tax Deed sale.

If you have the winning bid, within 24 hours you must pay to the Clerk the balance of the bid along with the recording fee and state documentary stamp taxes based on the winning bid amount. After the Clerk receives full payment, the Clerk issues and records the Tax Deed. However, according to statute, the property owner has the right to redeem his property by paying all back taxes and costs at any time before the successful bidder makes full payment to the Clerk for the Tax Deed.

When purchasing property at a Tax Deed sale, there are several things to be aware of. The Clerk must take certain steps and actions before the property may go to Tax Deed sale. If these requirements are not strictly complied with, the Tax Deed may be invalid. Furthermore, the tax certificate holder applying for the Tax Deed is sometimes the high bidder at the Tax Deed sale because the tax certificate holder is entitled to a credit against the tax certificate holder’s bid price equal to the amount of the tax certificate. Also, you should keep in mind that there may be environmental issues with the property, and you probably won’t be able to have a proper environmental assessment done until after the Tax Deed sale which is risky.

Moreover, a Tax Deed is basically an administrative Quit Claim Deed without any warranty of title, and the former owner has 4 years to bring an action to challenge the Tax Deed sale. Therefore, many title insurance companies will require a quiet title action if you decide to sell the property within 4 years of purchasing the property and wish to provide title insurance to your buyer.

On top of all this, the following are some of the interests in real property that survive the issuance of a Tax Deed:
• Easements
• Matters reflected on a plat
• Covenants and restrictions that run with the land
• Mineral reservations
• Federal tax liens
• Subordinate liens which are held by state, municipal, or county governmental units.

Therefore, it would be wise to have a real estate attorney do a title search for the property you plan to purchase well in advance of bidding so you’re aware of any issues before you wind up with a problem.

While many view Tax Deed sales as an easy way to scoop up valuable property at an inexpensive price, if you don’t do your homework beforehand, you might scoop up a headache instead. A savvy real estate attorney can help you navigate the process and choose the right property.

Anthony Velardi is a Martindale-Hubbell A/V Rated attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Anthony’s practice primarily focuses on real estate, land use, and corporate/business law. Questions can be submitted to thelaw@cclmlaw.com.

Dealing with a Problem Tenant or Unwelcome House Guest

By:  J. Matthew Kelly, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Are you dealing with a problem tenant or an unwelcome house guest? If so, Florida law provides three mechanisms for removing an individual from possession of real property – eviction, unlawful detainer, and ejectment.

Eviction

The most common way to remove an individual from possession of real property is an eviction proceeding. An eviction proceeding in Florida is governed by Chapter 83 of the Florida Statutes. An eviction is the appropriate proceeding to remove an individual who leased the premises but has violated the lease or has failed to pay rent.

The most common eviction example is against a tenant who has failed to pay rent. In a situation where a tenant has failed to pay rent, the first step in the eviction proceeding is to provide the tenant with a three-day notice. This is a document designed to inform the tenant that he has failed to pay rent and is indebted to the landlord. The three-day notice has certain legal requirements as to its content and method of delivery. If the three-day notice is defective in content or delivery it can significantly delay any eviction proceeding.

Once a three-day notice has been delivered, the tenant has three days (excluding weekends and legal holidays) to pay the demanded rent or to vacate the premises. If the tenant fails to pay the rent, or vacate the premises, the landlord may then file an eviction complaint with the court. Once a tenant is served with an eviction complaint, the tenant has five days to answer the complaint. If the tenant fails to answer the complaint the landlord can seek a default judgment; which would avoid the need for a trial. If a default occurs, the landlord can move for a final judgment and writ of possession to restore them to possession of the property.

If a tenant chooses to contest or defend against the eviction proceeding for grounds other than that the rent has been paid, the tenant is required to pay into the registry of the court alleged rent owed as described in the complaint. If the tenant fails to pay the alleged rent owed, or fails to challenge the rent amount, the tenant waives his defenses and the landlord is entitled to a default judgment in the eviction proceeding and a writ of possession to restore the landlord to possession of the property. A successful landlord is entitled to recover his reasonable attorney’s fees expended in the eviction process.

 

Unlawful Detainer

An unlawful detainer action is governed by Chapter 82 of the Florida Statutes. An unlawful detainer action can be used to remove an individual who is residing in a home, does not have a legal right to the home, and where there was never a lease agreement. The person bringing the unlawful detainer action must have a legal right to the residence or property; that is to say, the person bringing the action must own the property or be the legal tenant of the property.

The most common uses of this type of action involve a significant other who has moved in but a break-up occurs and the significant other refuses to leave, removal of a troubled family member who was invited in to get back on their feet but fails to obey house rules, removal of a friend who was once a welcome guest but has now refused to leave, or even squatters that have moved into a residence without permission.

Unlike an eviction, an action for unlawful detainer does not require specific notices prior to being able to file the action with the court. Like an eviction, an action for unlawful detainer requires the person you are attempting to remove to respond in five days.

The important thing to remember with an unlawful detainer action is that there must not be a landlord-tenant relationship or an agreement for payment of rent. If this kind of relationship exists an eviction proceeding is the proper mechanism for removal.

 

Ejectment

An ejectment action is governed by Chapter 66 of the Florida Statutes. An ejectment action is most commonly used in a similar manner to an unlawful detainer action. Like an unlawful detainer action, ejectment is commonly aimed at girlfriends, boyfriends, family members, friends, or other individuals who have overstayed their welcome where there is no landlord-tenant relationship.

There are two main distinctions between an ejectment action and unlawful detainer action. Ejectment actions are not summary proceedings, meaning ejectment may take longer to reach the goal of removal compared to an eviction or unlawful detainer action. Secondly, an ejectment is the appropriate action when the individual you are attempting to remove may claim some form of entitlement to the property. An example of this would be where the person you are attempting to remove claims some form of ownership of the property.

Florida law provides numerous mechanisms for removal of problem tenants or unwelcome house guests. It can often be difficult to determine which type of action is best for your situation. It is also easy to hit roadblocks throughout the removal process that can significantly delay any removal. If you are faced with taking legal action to remove an individual from your property I recommend hiring an experienced attorney to guide the process.

Matthew Kelly is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Moving your Trust to Florida

By:  Kevin R. Album, Esq.

You finally did it.  You worked hard, put the kids through college, saved enough money, and now your movers are packing up a moving truck destined for the warm Florida climate.   When you move to a new state, you will need to find new doctors, new drycleaner, new favorite restaurant, and just about new everything.  One item that is often overlooked amid the chaos of moving your family across the country is making sure your trust moves with you to Florida.  Failure to “pack” your trust for the move could: make the trust administration more challenging for you or the successor trustee, trigger unwanted taxes owed to your previous state, and unintentionally thwart your planning.

The Situs of your Trust and Taxes

Each trust has a domicile, but for trusts we don’t use the term domicile, instead we refer to a trust’s domicile as a trust’s “situs”.  Situs means the location where a trust is located and also where it is subject to jurisdiction for state taxes.  Generally, a trust document names the state you live in when the trust is created as the situs of your trust.  Therefore, when the trust document names a situs, that is the state that holds jurisdiction for taxation of your trust (even after your move to Florida).   If no situs is named in a trust document, then common law and state trust codes will give guidance to the trustee on how to determine the proper situs of a trust.

If you have a revocable trust, a written amendment can be utilized to change your trust’s situs to a new state.  If you have an irrevocable trust (such as a special needs trust, life insurance trust, or charitable trust), you still may be able to change your situs but would likely not be able to amend your trust in order to do so. The most common ways that an irrevocable trust can be revised in Florida are by judicial modification, non-judicial modification, combining multiple trusts into one trust, or decanting (creating a new trust and “pouring” the majority of the contents of the old trust into the new trust). The options available to change an irrevocable trust’s situs will depend on both the language of the trust and what is allowed under Florida’s Trust Code.

Your trust’s situs will determine which state holds jurisdiction for tax purposes.  Florida has no state income tax, no estate tax, and no inheritance tax.  Therefore, it is possible that Florida may have more advantageous tax laws than the state you moved here from.  As a result, when a person moves to Florida, changing the situs of a trust is often desired.   If you don’t transfer the situs of your trust to Florida when you move here, your previous state may claim jurisdiction to tax your trust.

Choosing your Trustee and Personal Representative Wisely

If you named a friend or family member residing in another state as trustee of your trust, they can likely serve as the trustee of your trust in Florida.  However, if a probate is also required, a friend (non-relative) would not be able to serve as the Personal Representative of your Estate when you die as non-relatives that do not reside in Florida usually cannot serve in that role.

If you determine you want a corporate trustee, under Florida law, banks and trust companies must be incorporated under the laws of Florida and have trust powers or else they are not qualified to serve as trustee of your trust.  Therefore, if you named a bank or trust company that is not located in Florida as your trustee, the company may not qualify to serve as the trustee of your trust. The failure to have a proper trustee or successor trustee in place for a trust leads to the appointment of a new successor trustee by either the beneficiaries of the trust or a court holding jurisdiction over the trust.

Homestead in Trust

If you purchase a home in Florida and reside there, you likely will file for a homestead tax exemption with your local property appraiser’s office to save money on your annual real estate taxes.  However, Florida’s homestead laws also have restrictions on the devise of a homestead property.  For example, if you purchased your Florida home in the name of your out-of-state trust, you may have unintentionally made an improper devise of the Florida home to your trust that could result the Florida home being pulled out of your trust and subjected to probate in Florida after you die. If you have improperly devised your Florida home to your trust, it can usually be corrected to meet your wishes by amending the trust and/or by executing new deed(s) that accomplish your estate planning goal for the property.

When moving to Florida with an out-of-state trust, it is prudent to have an estate planning attorney review your trust to see if there are any items that need to be updated to ensure your wishes are met, and there is no added strain upon the trust’s administration resulting from your move to Florida.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.

Dissension in the Ranks: The Basics Surrounding HOA Election Challenges

By: Dan Rich, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Few things generate more animosity and drama within a homeowners association, or HOA, than contested board of director elections. This tension may result in residents seeking legal action against the HOA in the form of an election contest. Sadly, most HOA residents have zero clue about the rules regarding an election contest; however, this article will hopefully shed some light on the basics surrounding HOA election contests in Florida.

So where do we begin? Florida law states that any election dispute or challenge in the homeowners association context must be submitted to mandatory arbitration with the Florida Department of Business and Professional Regulation, or DBPR.
The window for submitting an election contest is not open for long. Instead, Florida law provides that any person who wishes to challenge an HOA election must file their petition for arbitration with DBPR within 60 days of the election results being announced. The announcement almost always occurs at the election itself, which means that the clock starts ticking the second the meeting concludes.

Florida law goes on to provide that prior to filing an arbitration petition with DBPR, the resident must also provide his or her HOA with the following: (a) advanced written notice of the specifics regarding the dispute; (b) a written demand for relief, and a reasonable time for the HOA to provide said relief; and (c) notice of the resident’s intent to file an arbitration petition in the absence of a resolution. If the resident fails to comply with these three requirements, then DBPR will be forced to dismiss the election challenge.
Often times, the “written notice of the specifics regarding the dispute” is initially founded upon rumors, hearsay and mere hunches. To avoid basing your HOA election challenge on speculation, it is generally recommended that the disgruntled resident investigate the accuracy of the information prior to filing the arbitration petition with DBPR.

You may be asking yourself, why should I take the time to investigate? This answer is simple. Florida law provides that the prevailing party in a DBPR election contest is entitled to recover from the losing party all of his or her attorneys’ fees and costs.
To minimize this risk, Florida law provides that any resident of a HOA can inspect the official records of the association. Florida law mandates that election materials, such as ballots, proxies and the sign-in sheet be preserved for inspection by residents who request to review the documentation. Once a request is submitted the HOA must make all requested materials available within 10 days. Then, the requestor must take time to review the documents, which often times requires a time commitment based on the sheer amount of papers involved.

The importance of confirming the basis for any election challenge is imperative, but it narrows the 60-day timeframe that a resident has to file their petition. Therefore, that is why I recommend that

a resident seeking to challenge an HOA election, or an HOA facing an election challenge itself,
seek the advice of a knowledgeable attorney who can help navigate the complexities of an election
challenge under Florida law.

Dan Rich is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in
Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Code Enforcement Liens

By: Anthony A. Velardi, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Q: A code inspector recently notified me about a code violation concerning my property. What is the process of enforcing a code violation?

A: Chapter 162 of Florida Statutes sets forth the various ways in which a local government body, such as a city, can enforce code violations, such as by imposing a fine which may continue to accrue on a daily basis. A code enforcement board is usually comprised of 7 members with 2 alternate members and should include an architect, businessperson, engineer, general contractor, subcontractor, and realtor.

The process usually starts with a disgruntled neighbor calling code enforcement, and a code inspector initiates the investigation. If a violation is found, the code inspector is required by law to notify the violator, and the code inspector is required to give the violator a reasonable time to correct the violation, unless the violation presents a serious threat to public health, safety, and welfare or if the violation is irreparable or irreversible in nature.

Typical code enforcement violations may include, but are not necessarily limited to, noxious odors or fumes emanating from your property, neglecting to mow your lawn, failing to secure buildings, parking derelict vehicles, failing to remove debris, placing improper signage, and possessing certain farm animals within city limits on your property.

If the violation continues beyond the time specified for correction, the code inspector notifies the enforcement board and requests a hearing. Notably, if a repeat violation is found, the code inspector is required to notify the violator but is not required to give the violator a reasonable time to correct the violation.

After the hearing, the code enforcement board is required to issue findings of fact based on evidence and law, and the code enforcement board issues an order. If the code enforcement board imposes a fine and the violator does not pay the fine by a certain date, the local government body may record in the public records a certified copy of an order imposing the fine.

The recorded order then becomes a lien against the land on which the violation exists and notably upon any other real or personal property owned by the violator. Therefore, if you have a code enforcement lien against Property A which you own and desire to sell Property B which is not in violation but located in the same county, technically the code enforcement lien attaches to Property B, unless Property B is your homestead. Furthermore, a code enforcement lien held by a municipal or county governmental unit survives issuance of a tax deed unless satisfied of record or otherwise barred by law.

If the code enforcement lien is not paid within 3 months after the date of recording, the local government body may foreclose on the lien or sue to recover a money judgment for the amount of the lien plus accrued interest, and a local government body, such as a city, has 20 years from the date of recording of the code enforcement lien in the public records to file its foreclosure lawsuit.

Anthony Velardi is a Martindale-Hubbell A/V Rated attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Anthony’s practice primarily focuses on commercial and residential real estate, land use, and general corporate/business law. Questions can be submitted to thelaw@cclmlaw.com.

Pets and Estate Planning

By: Clark, Campbell, Lancaster & Munson, P.A.

When we think about estate planning, we generally focus on our family and friends, but what about our pets that may outlive us? We would like to think that our family and friends will want to care for our pets upon our death, but this is not guaranteed. This article is a general overview of steps that you can take to more effectively ensure that your pets will be cared for in conformance with your wishes during your lifetime and upon your death.

Q: My friend expressed that she will care for my pets if anything were to happen to me, should I still include my pets’ care in my estate planning?

A: Yes, in your Last Will and Testament (“Will”), you should give your pets to your friend. However, keep in mind that your friend may ultimately change her mind, or alternatively, your friend may predecease you. At the very least, you should consider naming alternates to care for your pets.

Q: How does a Will effectuate my wishes concerning my pets’ care?

A: A Will reflects your intent concerning your pets’ care, but the directives are not enforceable. While we may consider our pets a companion or a member of our family, by law, our pets are considered property. Pets can be conveyed through a Will like any other type of property that you may own. However, as property, a beneficiary can also disclaim or refuse to accept ownership of your pet. For example, in your Will, you give your pets to your friend, but shortly after your death, your friend discovers that she is severely allergic to your pets, and a result, she refuses to accept ownership of your pets.

Q: Is there anything else I should be concerned about if I were to rely solely on a Will regarding my pets’ care?

A:  Yes.  A Will does not consider the care of your pets during your lifetime and may not be immediately effective upon your death. For instance, you are determined to be incapacitated and you are subsequently admitted to a nursing home. The Will does not direct your pets’ care while you are incapacitated. Further, if your estate is subject to probate, a Will does not direct your pets’ care during the probate process. For these reasons, you may want to supplement your Will with a pet trust.

Q: What is a pet trust?

A: Florida, like most states, has adopted pet trust statutes. A pet trust is a legal arrangement concerning your pets’ care during your lifetime and upon your death. The trustee of a pet trust will hold funds for the benefit of your pets and will disburse such funds to a designated caregiver of your pets. The benefit of a pet trust, in contrast to a Will, is that a pet trust is enforceable, specific, effective during your lifetime and upon your death, and allows you to have control of your pets’ care with the oversight of a trustee after your death. In Florida, a pet trust will not terminate until your pets’ death, unless you direct otherwise.

Q: Is there anything else I should consider when formulating my pets’ care in my estate planning documents?

A: Yes. Due to the reasons discussed above, consider naming a rescue organization as a last resort to care for your pet. Additionally, you may want to consider naming not only the pets that you currently have, but also reference any pets you may acquire in the future. Finally, a pet trust can be as general or specific as you desire. For example, in a pet trust, you could direct the type of food your pets will be fed or which veterinarian will be used for your pets’ health issues.

If you wish to direct your pets’ care in your estate planning documents or wish to set up a pet trust, it is advisable to seek counsel from an estate planning attorney.

Homestead: More than Just a Property Tax Exemption

BY: Kevin R. Albaum, ESQ.
Clark, Campbell, Lancaster & Munson, P.A.

Most people know that there is a tax break available to them on their home (house, condominium, co-ops apartments, and some mobile home lots also qualify).  The way it works is that a tax exemption can be applied for at the local property appraiser’s office on a person’s home if the person owns and lives in the home that they are trying to obtain the exemption on by January 1 of the year they are trying to claim the exemption.

The tax exemption provides that the first $25,000 of the assessed value is exempt from real property taxes and the third $25,000 of the assessed value is exempt as well.  The tax exemption provision is a nice perk provided by the Florida Constitution (Article VII, Section 6) to Floridians and can easily save a Polk county resident hundreds or possibly over $1,000 per year in property tax owed.  However, the property tax exemption provision is just one of the benefits of owning a homestead property in Florida.

So, what exactly is a homestead?  Article VII of the Florida Constitution further explains the property tax exemption and defines homestead as real estate held by a person who maintains title to the property and maintains permanent residence thereon. Further, you only get one (1) homestead property per individual or family unit. The Florida Constitution has another provision on homestead property (Article X, Section 4) which adds that for creditor protection, homestead property can be up to 160 contiguous acres outside of a municipality or up to (1/2) one-half acre if the residence is located within a municipality and owned by a natural person.  Article X goes on to add restrictions on the devise of a homestead property if you have a spouse or minor child.  For example, if you are married and own a house (in your name only) but your spouse lives in your house, it is likely that you cannot convey the homestead property without your spouse signing the deed as well.

Is my homestead protected from creditors?  Specifically, if your property qualifies for homestead status and fits within the definition under Article X, regardless of the home’s value, it is exempt from the forced sale by any court and protected from judgments of your creditors (except for the payment of tax liens, mechanic’s liens, HOA liens or mortgages).  For example, if you get a new roof put on your house and don’t pay the roofer, you will most likely not have homestead creditor protection against the roofer.  Additionally, if a person files for bankruptcy, a different set of rules for creditors pursuing the homestead property will also apply.

Can I transfer my homestead to my trust or my business?  Many Florida court cases have found a revocable living trust can own a natural person’s homestead property and maintain Article X creditor protections.  However, many other entities and types of trusts cannot own a homestead property and also maintain creditor protection.  For example, you can’t transfer your home to your limited liability company and expect to maintain homestead creditor protections for your home if your limited liability company is sued in the future.

Calling Florida’s homestead laws complex would be a drastic understatement and when questions arise regarding whether or not your home: 1) Qualifies for the Article VII tax exemptions; 2) Qualifies for the Article X creditor exemptions or 3) Has Article X restrictions on whether or not there are restrictions on devising the property, it is always best to speak with an attorney who has experience in this area to look at your specific situation and properly advise you on your home.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.

Tickets, Tickets, Got Tickets? A Summary of Florida’s Ticket Resale Laws

By: Dan Rich, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Question: Is “scalping,” or reselling, tickets illegal in Florida?

Remember when your favorite band came to town but you couldn’t go because all of the tickets sold out in less than five minutes, but then were being resold for thousands? I do. The art of reselling tickets at prices much higher than the face value of the ticket is commonly referred to as “scalping,” and is a very real dynamic of the live event scene that unfortunately results in far too many people purchasing tickets at much higher prices than face value.

Before delving into how Florida law handles scalping, regardless of whether the ticket sale occurred online, over the phone or directly in person, it is beneficial to get a quick background.

How do ticket sales even work?

Plainly speaking, a “ticket” is a piece of paper, or more recently an electronic access code, that permits the holder of that paper or access code the right to enter an event such as a concert, a spring training baseball game or that new blockbuster movie. Generally, you can purchase tickets from the venue itself or, from a ticketing agent like TicketMaster or StubHub, who was hired by the venue to sell tickets at face value, plus a fee.

But sales do not stop here, instead, you may be able to get your tickets from a “ticket broker.” A ticket broker is anyone who obtains tickets for the sole purpose of buying tickets and then quickly turning around and re-selling them for a profit. Ticket brokers come in all shapes and sizes ranging from professional ticket brokers who use technology to purchase up large lots of tickets for resale to the retired baseball fan who buys up a batch of tickets and resells them all season in that parking lot across the street.

Whose job is it to regulate ticket resales?

Currently, there is no federal law in place prohibiting scalping. However, fifteen (15) states have implemented their own policies and laws in regards to banning the practice of scalping in some way. The offense of scalping is most commonly classified as a misdemeanor, with penalties ranging from fines and/or up to one (1) year in jail.

In Florida, up until a bit over a decade ago, ticket scalping was illegal. However, in 2006 the Florida Legislature changed the laws, and permitted persons, including ticket brokers, to resell tickets.

What does Florida law provide?

Currently, in Florida it is legal to scalp or resell tickets at prices higher than face value as long as the seller follows the policies and procedures outlined by the Florida Legislature. These policies can be summarized as follows:

  • Mandatory Guarantees. Resellers must post specific instructions on their ticket resale websites. The instructions are intended to provide clear guidelines for when a refund will be offered to purchasers, and the seller must also disclose that it is not the issuer, original seller or reseller of the ticket.
  • Mandatory Refunds. Resellers must provide refunds to ticket purchasers if the event is canceled, the purchaser is denied admission to the event (for a reason not attributable to their own actions) and if the tickets are not delivered in the manner requested.
  • Prohibitions on Location of Resale. Resellers cannot resell tickets for an event on the property where the event is taking place.
  • Ban on Reselling Non-Profit Tickets. The resale of tickets to a charity event is strictly prohibited.
  • Dollar Surcharge. Resellers are permitted to charge a $1 surcharge for reselling tickets, but only if the tickets being resold are for passage or accommodations on common carriers, to multi-day or multi-event tickets to a park or entertainment complex, or sold through an Internet website that fails to meet the criteria mentioned above.
  • Ban on “Bot” Software. Resellers may not use “bot,” or computer software, to buy up tickets. This provision of the Florida law is intended to limit professional scalpers from buying up blocks of tickets to events, impeding purchasers from getting direct access to these tickets.

Therefore, if a person or business violates any of the above-referenced provisions their attempt to resell those tickets will be considered a violation of Florida statutory law, and in turn would make their scalping attempt illegal. By understanding what is permissible and what is prohibited or required, event goers will be able to appear informed and knowledgeable the next time they are approached by a scalper. If you feel you have been wronged or cheated by a scalper, I would encourage you to contact an attorney that has knowledge of these laws and how they apply.

Dan Rich is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland.  Questions can be submitted to thelaw@cclmlaw.com.

Collecting Taxes on Collectibles

By:  Clark, Campbell, Lancaster & Munson, P.A.

Do you have a collection that you wish to sell? If so, the IRS may determine that your collection is composed of “collectibles” and apply a 28% capital gains tax rate to any gain you may acquire from the sale of your collection. Generally, for most taxpayers, the capital gains tax rate is 15%.

Q: What are collectibles?

A: The IRS has stated that the following are collectibles:

  1. Works of art;
  2. Rugs;
  3. Antiques;
  4. Metals;
  5. Gems;
  6. Stamps;
  7. Coins;
  8. Alcoholic beverages;
  9. Musical instruments;
  10. Historical objects; and
  11. Any other tangible personal property specified by the Secretary for purposes of this subsection.

Notably, comic books, toys, and cars are not explicitly provided in the above list. However, the IRS has the discretion to consider such items as collectibles depending on the facts and circumstances.

 

Q: What is an example of tangible personal property that the IRS may consider a collectible?

A: Taxpayer collects dolls from a popular toy company and keeps her collection in a climate controlled storage unit. Taxpayer sells five dolls from her collection for $1,000.00. Taxpayer’s dolls may be considered a collectible if taxpayer’s treatment of her collection indicates that she is attempting to preserve her collection’s value, the collection has considerable value, the dolls are sought after collectors, and the taxpayer has no personal use for the dolls.

 

Q: I have an item that is considered a collectible; will I automatically be subject to the 28% capital gains tax rate for any gain I may acquire from the sale of my collectible?

A: Not necessarily. In order for the 28% capital gains tax rate to apply, the item must be held by the taxpayer for more than a year. For example, if taxpayer bought a collectible in January 2017 and sold the same collectible in April 2017 for a profit, then the sale will not be subject to the 28% capital gains tax rate because taxpayer held the collectible for less than a year. Instead, the sale of the collectible will likely be taxed as ordinary income.

 

Q: How do I determine basis in my collectible?

A: It depends on how the collectible was acquired. For example, taxpayer’s great grandmother bought a collectible in 1960 for $3.00, and at the time of her death, the collectible was valued at $1,000.00. If taxpayer inherited the collectible from her great grandmother, then taxpayer’s basis in the collectible will be its fair market value at the time of inheritance, which is $1,000.00. If taxpayer’s great grandmother gifted the collectible during her lifetime to the taxpayer, then taxpayer’s basis in the collectible will be her great grandmother’s basis in the collectible, which is $3.00. If taxpayer bought the collectible from an auction, then taxpayer’s basis in the collectible will be the amount taxpayer paid for the collectible, plus any auction fees. Finally, a taxpayer’s basis in a collectible may increase due to maintenance and restoration costs to preserve the collectible’s value.

 

Q: Are there any other tax consequences that I should consider?

A: Yes. Generally, collectibles are sold at a loss. Whether a taxpayer will be able to claim a loss from the sale of a collectible will depend on whether the taxpayer personally used the collectible and whether the taxpayer is engaged in a hobby or a business.

If you are unsure whether you have a collectible or whether you may claim a loss from the sale of your collectible, it is advisable to seek counsel from a tax professional.

Recent Court Case Might Not Be Just for the Birds

By: Anthony A. Velardi, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

 

Q: I raise wild birds for sale as pets on my property.  Can I qualify for an agricultural tax exemption for my property?

 A:  In McLendon v. Nikolits, the 4th District Court of Appeal (DCA) recently held that a property owner who engages in aviculture – raising wild birds for sale as pets – can qualify for an agricultural tax classification for the part of their property used for aviculture.  The 4th DCA’s decision may also perhaps be applied to other types of pet breeding, such as dog breeding, and the agricultural tax exemption if they qualify.

Todd and Shire McLendon own a 5-acre parcel located in Palm Beach County, and the McLendons have used the property for aviculture since 2006.  From 2006 through 2012, the Palm Beach County Property Appraiser granted an agricultural tax classification for 4.5 of their acres because of its dual uses for aviculture and cattle grazing.

In 2012, the Property Appraiser denied the agricultural tax classification for the McLendons’ 4.5 acres and issued the tax classification for only 2.25 acres.  The McLendons appealed, and the Value Adjustment Board (VAB) held that 4.5 acres should be given the agricultural classification.

In 2013, the Property Appraiser again denied the agricultural tax classification for the part of the property devoted to aviculture.  The McLendons appealed again, and a special magistrate appointed by the VAB found in favor of the McLendons.  The Property Appraiser appealed to the circuit court, and the Property Appraiser also denied the agricultural classification for 2014.

The Property Appraiser argued that the legislature intended to limit agricultural activities to only those listed in the statute because the legislature included only “poultry” and not “aviculture” in the list of activities that constitute “agricultural purposes” in the statute.

However, the McLendons argued that the legislature did not intend for the list to be exclusive or exhaustive because the legislature used “includes, but is not limited to” in the statute.

The trial court concluded that aviculture was intentionally left out of the statute and that bird-related activities qualifying as agriculture were limited to “poultry.”  The trial court also indicated that allowing the breeding of pets, and birds in particular, to qualify for an agricultural exemption, would open the floodgates and allow many landowners to claim the agricultural exemption for various types of pet breeding thus in turn leading to abuse of the system.

On appeal, the 4th DCA found that “includes, but is not limited to” is not ambiguous, and the 4th DCA found that the term “farm product” is defined in Fla. Stat. § 823.14(3) as “any…animal…useful to humans” under the Florida Right to Farm Act.

Through the use of expert witness affidavits at trial, the McLendons were able to convince the court that aviculture is useful to humans for reasons such as companionship, concern for endangered species, entertainment, education, and scientific purposes.

Accordingly, the 4th DCA reversed the trial court’s decision and held that the McLendons’ portion of the property used for aviculture qualifies for an agricultural tax exemption.  It will be interesting to see how the Polk County Property Appraiser reacts to this recent decision, and unless the Florida legislature closes this loophole, this might be a case for the 2nd DCA and perhaps Florida Supreme Court to decide if there is a conflict between DCA’s.

 Anthony Velardi is a Martindale-Hubbell A/V Rated attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland.  Anthony graduated from the University of Notre Dame in 2006 and Stetson University College of Law in 2009.  Questions can be submitted to thelaw@cclmlaw.com.