South Florida Real Estate Blog by Michael Catino, Realtor

Can residential leases run longer than one year?

At least a few times each day, members call the Legal Hotline to ask if a landlord and tenant can enter a residential lease that lasts longer than one year. The short answer is that a landlord and tenant are welcome to sign a lease for a term longer than a year.

However, they will need to do a little work without your assistance to make it happen.

Until 1992, there were no lease forms approved for use by Realtors. But that changed when the Florida Bar issued the advisory opinion The Florida Bar Re: Advisory Opinion Nonlawyer Preparation of Residential Lease Up to One Year in Duration, 602 So. 2d 914 (Fla 1992). Please note that the approval was limited to residential leases, so we're currently unable to provide any commercial lease forms for our members.

There are currently two lease forms available: Residential Lease for Apartment or Unit in Multi-Family Rental Housing other than a Duplex, and a Residential Lease for Single Family Home and Duplex. Both leases include the following clause regarding renewals or extensions: "The Lease can be renewed or extended only by a written agreement signed by both Landlord and Tenant, but in no event may the total Lease Term exceed one year. A new lease is required for each year."

If you pay extra close attention, you may notice that the language in the multifamily lease clause is slightly different than the language in the single family lease, but this is just a weird quirk specific to these forms since the message is the same. The lease shouldn't exceed a year, and a new lease should be prepared each year.

What if a landlord and tenant don't like this limitation and want a longer lease?

One option is to have a lawyer draw up a lease with a term longer than a year. This could be a wise investment, since a lease greater than a year triggers the need for additional formalities due to the Florida Statute of Frauds.

Another option is for the landlord or tenant to conduct their own...

Rent vs. buy? FAU sees it still moving closer to ‘rent’

U.S. metropolitan residential real estate markets are peaking and some cities are in another pricing bubble, according to the latest national index produced by Florida Atlantic University (FAU) and Florida International University (FIU) faculty.

The Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index estimates wealth creation by way of homeownership and equity appreciation versus renting and reinvesting in more traditional financial assets. Thus, by default, the index also measures the pressure on the demand for homeownership.

Scores approaching one indicate strong downward pressure on the demand for ownership, and two metropolitan areas – Dallas (.92) and Denver (.77) – are rapidly approaching an index score of one.

"Both Dallas and Denver are significantly overheated," says Ken Johnson, Ph.D., one of the index's creators and associate dean and professor in FAU's College of Business. "Residential real estate prices in Dallas are significantly above their long-term pricing trend, and I anticipate pricing corrections in the near future."

Strong economies in Dallas and Denver have buoyed property prices beyond their fundamental levels for a sustained period.

"Prices are still appreciating in both metros but at a decreasing rate, suggesting that the current upward pattern in property appreciation is nearing an end," says Eli Beracha, Ph.D., co-creator of the index and director of the Hollo School of Real Estate at FIU.

Of the 23 cities in the BH&J Index, 20 trended toward rent territory last quarter, implying these markets became slightly more renter friendly in terms of wealth creation. Interestingly, three metro areas – Honolulu, Miami and Seattle – which have been some of the hottest real estate markets in the country, have trended marginally back toward ownership territory.

"This does not mean that these markets are exhibiting clear buy signals, but rather...

Is it okay for a buyer to move in before closing?

Buyers often anxiously await closing so they can enter their new home. In some cases, however, they ask if they can move a few things in early so they can hit the ground running. In other cases, the buyers may have a time gap between closing on an old home and moving into their new one.

As a result, it's not uncommon for a buyer to ask a seller if they can move a few things in early, either possessions or themselves.

Nice sellers often try to accommodate nice buyers, but there are dangers to allowing someone to move in early. According to Cara Ameer, a broker associate with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida, who writes for Inman News, there are six good reasons for a seller to say, "No, I'm sorry you can't," when a buyer asks for early access to a home.

1. Who broke it?
A buyer moves in early, and the sink plumbing springs a leak. Will the buyer now fix it – should the buyer fix it? What if the buyer somehow thought the sink could support a grown adult and sat on it? Who pays?

2. Liability
If the buyer and seller have not signed any kind of pre-occupancy or lease agreement, what happens if something worse than leaky plumbing occurs, such as a major injury? The seller may be liable. In addition, what happens if wooden floors get scratched as movers drag new furniture across a room? What if a hurricane destroys everything the buyers stored in the garage?

Even with proof that the buyer caused damage, it could become a new negotiating point the buyers use to request further concessions from the seller.

3. "I didn't notice this before …"
Most houses have a small chipped something or temperamental item. If buyers move in early, it's like a "never-ending walkthrough," Ameer writes. Buyers could discover minor problems and try to "renegotiate issues that were never raised as a result of inspections or repairs."...

What happens to a house after one spouse dies?

Question: I am concerned about what will happen to my house if my husband passes away. Will I be allowed to keep the house and make mortgage payments, or sell it if I want to? – Nancy

Answer: In most cases, you would be allowed to either keep the house, making mortgage payments, or sell it. Many factors affect this, though – most importantly, how the home is titled.

Most married couples own their homes in a special type of ownership reserved just for spouses known as "tenants by the entirety." To explain the significance of this type of joint ownership, however, I need to first explain the two other options that are available.

The default type is called "tenants in common," in which each co-owner owns his or her part of the property individually. Typically, these portions are equal but, if specified on the deed, they can be different, such as 80 percent to one owner and 20 percent to another. With this type, there can be many owners, and when each owner dies, his or her portion goes to any heirs.

Another type of ownership is called "joint tenants with right of survivorship." This is like "tenants in common" in many ways, except that when each owner passes away, the portion goes to the other owners instead of heirs.

This brings us to "tenants by the entirety," which is similar in many ways to "joint tenants with right of survivorship," except that it is limited to a married couple. It has been said that the marriage becomes the owner of the property with this form, automatically making the surviving spouse the owner of the property. There are other advantages to owning property this way, such as money judgments against one spouse not forming a lien against the property – unlike with other forms of ownership where judgments against one owner could attach.

The easiest way to tell whether you own your home this way is by looking at your deed. If both of your names are listed along...