Matt Bales

Matt Bales

Matt Bales is specializes in commercial finance, corporate law, real estate and wills and trusts. He has extensive experience in negotiating and structuring complex commercial loan, asset acquisition, asset disposition and real estate transactions.

Mr. Bales received his Juris Doctor, magna cum laude, from the University of Miami School of Law, where he was editor of the University of Miami Inter-American Law Review and a member of the Phi Delta Phi International Legal Fraternity and Order of the Coif. He earned a Master of Business Administration in finance and international business from the University of Miami School of Business and a Bachelor of Science, magna cum laude, in business administration and marketing from Creighton University in Omaha, Nebraska.

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South Florida among top markets for buying foreclosures

Although there have been recent concerns about a shortage of homes for sale, South Florida currently ranks among the top 20 markets nationwide in which to buy foreclosures in 2013.

Miami-Dade, Broward and Palm Beach counties rank at No. 12 on the list recently compiled by Realty Trac Inc. Realty Trac’s report analyzed foreclosure inventory in the pipeline, average discounts and other factors for more than 200 metropolitan areas with populations of at least 500,000.

South Florida’s recent ranking is a somewhat of a surprise, given that local real estate agents and buyers have complained about a lack of properties for sale. Inventories of all available properties have fallen by approximately 50 percent in the past year, with many underwater homeowners still unable to sell and others waiting on the sidelines for prices to continue to improve. 

In addition, lenders have generally held off listing foreclosed properties, in part to avoid depressing prices. The limited quantity of homes for sale has led to bidding wars and offers well above asking prices. 

However, as South Florida has one of the nation’s highest foreclosure rates with 1 in 27 homes being in distress, the available inventory of bank-owned homes should likely increase providing further opportunities for investors and end users to acquire South Florida properties at historically low prices. 

What does a Florida title company do?

A Florida title company is responsible for coordinating the interest of all parties to a real estate transaction, including the buyers, sellers, mortgage lenders, real estate agents, lien search companies and surveyors. A Florida Title Company makes sure that all requirements for settlement are fully satisfied prior to closing.
 
After each purchase and sale contract is entered into, it is sent to the Florida Title Company for its review and to begin the title and closing process, which involves all of the following steps:
 
  1. Title search: The Florida Title Company researches the title to the property through a title search, which provides a history of the property and its prior and current ownership. It is the job of the Florida Title Company to examine the title to the property and to clear any liens, claims or other so-called title clouds on the property so that the new buyer receives clear and marketable title to the property they are buying.

  2. Survey: Most lenders require a survey when a single family home is being purchased. Even if a buyer’s mortgage lender does not require a survey it is always recommended that the buyer obtain a survey to make sure there are no issues with boundary lines or encroachments affecting the property. The Florida Title Company will review the survey for any potential issues, and will notify the new buyer, its lender, and the real estate agent of any issues with the survey. The Florida Title Company will provide the new buyer with a copy of the survey at closing.

  3. Property taxes: The Florida Title Company will verify with the taxing authority that the property taxes have been paid. On the HUD-1 Settlement Statement, the Florida Title Company will prorate the amount of the taxes based on the billing period and the date of the closing.

  4. Title insurance commitment & policy: The Florida Title Company will prepare the title insurance commitment from the title search report and, after the closing, issue both the owner’s and lender’s policies of title insurance. There are two types of title insurance: Lender’s which is required by the mortgage company, and protects the lender’s investment in the property; and Owner’s, which protects the new owner’s ownership interest in the property. It is strongly recommended that all buyers receive an owner’s title insurance policy which protects them against any unforeseen claims, hidden risks, or fraud against the property.

  5. Loan documents: The Florida Title Company coordinates with the mortgage lender to receive all of the loan documents in time for closing. Once the loan documents are sent by the mortgage lender to the Florida Title Company, the Florida Title Company reviews all of the mortgage lender’s forms to comply with the mortgage lender’s closing instructions. With the lender’s closing instructions, the Florida Title Company prepares the HUD-1 Settlement Statement and sends same to the mortgage lender for its approval prior to closing. The HUD- 1 Settlement Statement details all of the costs of the buyer and the seller in connection with the purchase and sale of the property. The Florida Title Company also prepares the Warranty Deed, Bill of Sale, Closing Affidavits and other documents required in connection with the closing.

  6. Closing & post-closing: At the closing, the Florida Title Company explains all of the documents to the parties involved in the transaction prior to signing. Settlement typically takes about one hour to complete. After the closing, the Florida Title Company disburses all of the monies collected at settlement in accordance with the HUD-1 Settlement Statement and pays off any existing mortgages on the property. The Florida Title Company also delivers the signed Warranty Deed and any Mortgages to the County Recorder’s Office for recording in the public records promptly following closing.

Florida real estate misunderstandings

There is a lot of confusion regarding attorneys and the perception of their role when a buyer is purchasing or a seller is selling a house or other property in Miami or anywhere else in Florida.

Below is a summary of several common misunderstandings related to the purchase and sale of properties in Miami and Florida which is intended to provide buyers and sellers with a better understanding as to the role of real estate attorneys and the benefits they can provide to buyers and sellers.

1. Attorneys kill deals

The most common misunderstanding in Florida real estate transactions is that attorneys cause deals to fall apart. This is entirely untrue. In fact, attorneys are trained to facilitate real estate transactions and get them to close as efficiently as possible. The most common reasons real estate transactions do not close are material defects in the title of the property which cannot be cured and the failure of the buyer and the seller to agree on certain material terms of the deal. Florida real estate attorneys have the unique ability and training to spot both apparent and hidden issues with the property which if not properly addressed prior to closing can be large, expensive, and time consuming problems for both the buyer and the seller after the closing.

2. A Florida real estate attorney is more expensive than a title company

The second most common misunderstanding is that attorneys are expensive and cost more than a title company. This is untrue as well. In Florida both attorneys and non-attorney title companies can act as the title and closing agent in a real estate transaction. The promulgated rate for the title insurance premium is the same everywhere in Florida. The closing fees charged by Florida attorneys for conducting the closing are usually the same as those charged by a title company. In fact, in many cases the total charges of Florida attorneys acting as title and closing agents are less than those charged by a title company with the additional benefit of the protection only an attorney can provide.

3. An attorney charges an attorney’s fee in addition to the title charges

When most Florida attorneys handle the title insurance side of a routine real estate transaction, in many cases they do not charge an additional attorney fee. However, some transactions are not routine and require additional services that only an attorney can perform such as clearing material title issues. In cases such as these, a reasonable attorney’s fee is charged for these additional services, and when the attorney is also acting as the title and closing agent these attorney’s fees are typically less than those that would be charged by an attorney not handling the closing.

4. In Florida an attorney is not needed for a real estate closing because the title company handles everything

A title company is prohibited by law from giving legal advice, so if a counter party is trying to get out of a contract, or a buyer does not know how to take title to the property, or a title issue exists, the title company cannot help with this. An attorney will be needed for these and many other matters which can arise, and that will cost extra if a non-attorney title company is involved. For these reasons, many other States require the buyer and seller to be represented by an attorney in a real estate transaction. It only make sense to have a Florida real estate lawyer handle the whole transaction from the beginning which will likely save money in the long run and will provide the additional protection a title company cannot, by law, provide.

5. Every Florida title company is operated or owned by an attorney

There is no requirement that a Florida title company must be operated or owned by an attorney. In fact, many Florida title companies are owned and operated only by a Florida licensed title insurance agent, and that person does not need to be an attorney. Florida licensed title insurance agents only need to attend a 40 hour classroom course in title insurance to satisfy the education requirement to become a title agent. Florida attorneys, on the other hand, need to not only have a college degree, but must also spend an additional 3 years in rigorous study in law school, pass a 2-day bar exam, and continuously expand their knowledge and skills through continuing legal education. Additionally, Florida real estate attorneys have certain fiduciary duties and obligation to place the interests of their clients first which Florida title companies do not have.

6. A buyer or property owner in Florida cannot choose who will be handling their closing

This is absolutely untrue as well. Federal law provides that a person buying a property or refinancing a property has an absolute right to select their own title and settlement agent. This is intended to ensure that the buyer’s and the owner’s interest is protected instead of being compromised by the influence of other interested parties in a transaction. The only way to ensure that a buyer’s and an owner’s interest is fully protected is for them to choose who will be handling their closing.

Florida existing home sales increase

Florida’s existing home and condominium sales rose in March 2011, according to the latest housing report released by Florida Realtors.

Existing home sales increased 12% during March 2011 with a total of 18,522 homes sold statewide compared to 16,540 homes sold statewide in March 2010. Florida’s median sales price for existing homes last month was $126,300 compared to a year ago figure of $136,000 which is a 7% decrease.

In addition, in Florida’s year-to-year comparison for condominiums, 9,703 units sold statewide in March 2011 compared to 7,830 units in March 2010 for an increase of 24%. The statewide existing condominium median sales price last month was $84,300, whereas in March 2010 it was $94,800 for an 11% decrease.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home and existing condominium sales in March 2011. This is the fourth consecutive month that Florida Realtors has reported higher year-over-year existing home and existing condominium sales across the State of Florida.

Ample supply of available housing at very attractive prices coupled with historically low interest rates and restored consumer confidence are fueling the apparent uptick in real estate sales across the Sunshine State.

Furthermore, a strengthening economy will continue to support this upward trend in real estate transactions in Florida. Interested buyers should consult with a highly qualified Florida Title Insurance Company to guide them through the purchase process.

Florida attorney general hopes to discuss foreclosure proceedings with large lenders

On October 12, 2010 Florida Attorney General Bill McCollum sent letters to the Chief Executive Officers of several large lenders, proposing for them to meet with him in Tallahassee, Florida to discuss potential ways to redeem the integrity of the foreclosure system and ensure the continued marketability of real property in the State of Florida.

"I am writing you to express my concern for Florida’s economic future and the credibility of Florida’s judicial foreclosure system as a result of the actions of your company -- actions that have affected the integrity of title to real property for Florida’s homeowners as well as the foreclosure process in Florida," Attorney General Bill McCollum stated to the Chief Executive Officers of several large banks such as JP Morgan Chase, GMAC Mortgage, Bank of America, and PNC Financial Services.

McCollum emphasized that the problems of faulty foreclosure affadavits has been compounded by the effect of the recently announced moratoriums on foreclosures by several large mortgage servicers, as well as the private litigation that has already begun.

"In my view, the moratoria and the private litigation are counterproductive to obtaining the swift solution necessary to address this serious problem facing Florida’s already fragile economy," McCollum said.

Florida’s new Distressed Condominium Relief Act

On June 1, 2010, Governer Charlie Crist signed into law Senate Bill 1196, which amends portions of Chapter 718 (Condominium Act) of the Florida Statutes. The following is a brief summary of that portion of the legislation included in Senate Bill 1196 that involves the bulk purchase of condominium units and which recently became effective on July 1, 2010.

The Distressed Condominium Relief Act (the "Act") protects bulk buyers or bulk assignees from assuming the developer's liabilities and responsibilities, provided that the conveyance of units is structured in accordance with the statutory requirements. The "Condominium Bulk Buyer Law," as it has commonly been referred to, removes significant barriers to condominium bulk buyer acquisitions, and investors wishing to purchase more than seven (7) condominium units will no longer be subject to accepting the original developer's liabilities.

For example, under the provision of the Act, a bulk assignee is not responsible for:

(i) the warranties of the developer;
(ii) obligation to fund the developer's converter reserves or warranties;
(iii) obligation to fund the developer's assessment or budgetary deficits; or
(iv) obligation to provide an audit during the time period in which the developer controlled the association.

The Act specifies when a bulk buyer or bulk assignee is required to turn over control of the condominium association and what documentation is required to be given to the association at the time of turnover It also specifies what documentation and information a bulk buyer or bulk assignee must provide to purchasers of units.

In order to take advantage of the Act:

(1) all statutory requirements thereunder must followed, and
(2) the bulk buyer or bulk assignee must acquire title to the units prior to July 1, 2012.

What does the homebuyer tax credit extension mean for homebuyers?

On July 2, President Obama signed the Homebuyer Assistance and Improvement Act of 2010. A principal provision in the Act affects those who entered into a binding purchase and sale contract on or before April 30, 2010 to buy a credit-qualified home.

The Act extends the deadline to close from the original June 30, 2010 deadline to September 30, 2010.

The change in the law did not extend the time to actually buy a home. It simply extended the deadline to close on a purchase contract that met the April 30, 2010 binding contract date.

This extension of time was granted because the rush of purchase contracts that met the April 30, 2010 deadline overloaded lenders with paperwork they could not process by the June 30, 2010 finalization date. Taxpayers that have not previously entered into a pending contract to buy a qualifying residence by April 30, 2010, would not qualify for the Homebuyer Credit unless Congress extends that deadline.

IRS Information Release 2010-080 discusses this homebuyer tax credit extension to September 30, 2010, and it alerts taxpayers to the documentation required to be attached to their tax returns in addition to completing Form 5405, First Time Homebuyer Credit and Repayment of the Credit.

Florida real estate has bottomed

Good news for prior and future investors in Florida real estate! According to a recent survey conducted by the University of Florida of professionals across the state, the area's real estate market has probably reached its lowest point.

The market appears to be stabilizing, survey respondents said, citing an influx of money from investors in the United States and abroad looking for the best deals. Private capital, both foreign and domestic, is entering Florida in search of quality investment deals. In addition, the survey reveals that more deals are expected to emerge as banks dispose of troubled properties.

The willingness of life insurance companies to invest again in commercial property is a positive attribute, according to the survey, but continuing dismal unemployment numbers, the difficult retail and office market and the difficulty in getting commercial banks to extend loans are all negative mitigating factors.

Given the difficult state of the Florida real estate market during the past few years, the University of Florida survey reveals the signs of stabilization in the Florida real estate market and the continuing attractiveness of investing in Florida real estate.

REO buyers have right to select the closing and title company

Although many REO purchase and sale contracts provided by REO lenders designate a closing and title company, many REO buyers are not aware that the REO lender cannot require, as a condition of sale, that the buyer purchase title insurance from a particular title company.

The buyer of REO property has the absolute right to choose the closing and title company and pay for the buyer’s own title policy. Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. 

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Landlord protection against construction lien claims for tenant improvements

A common, but easily preventable, occurrence for many commercial property owners is having a mechanic's lien filed against their property when their tenant has not paid its contractor and/or their tenant's contractor has failed to pay one of its suppliers, subcontractors or laborers for improvements made to the property by the tenant.

The mechanics lien is a cloud on the property's title and can prevent the sale or refinancing of the property until the mechanic's lien is paid. Often a mechanic's lien for tenant improvements is discovered long after same has been filed in the public records, but by taking a few proactive measures landlord's can ensure that their properties will be protected from the burdens imposed by such mechanic's liens.

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Why every homebuyer needs a real estate attorney

Buying a home for many people may at first appear to be a fairly simple matter but once a person has experienced the process of buying a house they quickly learn that there is more involved than simply finding the right property, signing the purchase and sale agreement and then proceeding towards closing.

There are many different steps involved in buying and home, and many buyers often experience uncertainty or even fear during the purchase process. However, an experienced Florida real estate lawyer can carefully guide the buyer through the entire purchase process and look out for the buyer's best interest. The following describes the various steps in the purchase process and how a Florida real estate attorney customarily assists the buyer during each step.

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Real estate closing procedure in Florida

In Florida, the real estate sector is a large part of the local economy with a substantial number of residential and commercial real estate closings occurring on a continual basis.

Although Florida real estate attorneys fully understand the real estate closing process as they are involved in real estate closings every day, many of the other participants in Florida real estate transactions often experience some confusion as to everything that happens between the time the purchase and sale contract is signed to the date of closing.

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Types of property ownership in Florida

Prior to closing, a homebuyer who is purchasing property in Florida must consider numerous matters. One extremely important matter, which is often not given enough consideration, is determining how to "take title" to the property. In other words, many types of property ownership exist, each with unique benefits and drawbacks.

Factors such as asset protection, taxation and estate planning-needs must be considered before choosing the best way to take title to the property. Various ways in which a buyer of a Florida home may take title to property are described here.

How to avoid closing delays due to a mechanic's lien

A mechanic's lien is a common but easily preventable occurrence for many Florida property owners. This type of lien is filed against a property when a contractor fails to pay one of their suppliers, subcontractors or laborers for property improvements.

The mechanics lien is a cloud on the property’s title and can prevent or delay the sale or refinancing of the property until the mechanic’s lien is paid.

Often a mechanic’s lien is discovered long after it's been filed in the public records, but by taking a few proactive measures in accordance with Florida’s Construction Lien Law, property owners can ensure their properties are protected from the burdens imposed by such mechanic’s liens.

Notice of commencement

File a Notice of Commencement before beginning any home construction or remodeling project. Record the form with the Clerk of the Circuit Court in the county where the property being improved is located. Post a certified copy at the job site, too.

The Notice notes the property owner’s intent to begin improvements, the location of the property, description of the work and the amount of bond (if any). It also identifies the property owner, contractor, surety, lender and other pertinent information.

A property owner who fails to record a Notice of Commencement or incorrect information on the Notice could result in having to pay twice for the same work or materials.

Request a list of all subcontractors and suppliers who have a contract with the contractor to provide services or materials to the property.

Releases of lien

Prior to making any payment, the property owner should receive a Release of Lien from every supplier, contractor and subcontractor, which covers the materials used and the work performed on the project. The Release of Lien is a written statement that removes the property from the threat of lien.

If the contract requires partial payments be made before the work is completed in full, the get a Partial Release of Lien covering all workers and materials used up to that point in time.

Before final payment, obtain an affidavit from the contractor that specifies all unpaid parties who performed labor or services, or provided materials to the property. Make sure the contractor obtains releases from all of these parties before making final payment.

Notice of termination of notice of commencement

At the end of the project and after the contractor is paid in full and obtained all of the necessary Releases of Lien and affidavits as described above are obtained, file a Notice of Termination of Notice of Commencement with the Clerk of the Circuit Court in the county where the property being improved is located.

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