Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(This story, in slightly different form, originally appeared in Incisive Media’s Daily Business Review.)

MIAMI-Real estate agents have has plenty of repossessed houses and condos to sell for banks, but before they can list many of them they have to tend to some new, time-consuming red tape. A new Miami-Dade County ordinance requires that foreclosed properties be inspected for code violations and that brokers or lenders obtain a certificate of use from the county Department of Planning & Zoning.

Critics say the ordinance, which targets homes in the county’s unincorporated areas, drags out the foreclosure process and is an added cost for the banks and burden on the market at a time when the industry needs to quickly shed thousands of homes seized from delinquent borrowers.

“The intentions of the ordinance are commendable, but this selective enforcement is discriminatory and, more importantly, a continuation of government intrusion into property owner rights,” says Jose Fenet, a real estate agent in suburban Miami Lakes. He says nearly 40% of his banked-listings are properties in unincorporated Miami-Dade neighborhoods.

Miami-Dade County has one of the highest foreclosure rates in the country, with 56,656 cases filed in 2008, up from 26,391 in 2007. Real estate experts say the fastest way to stabilize the region’s housing market is by getting rid off foreclosed houses and condos. Yet, they say the new ordinance is sure to slow sales.

County commissioners passed the ordinance, which became effective April 1, last December with the intent of ensuring buyers are alerted to the potential pitfalls of buying distressed properties. Code violations such as unauthorized structural additions and illegally built fences are rampant in Miami-Dade. Foreclosed homes, which often sit vacant for months, may also have other problems, including stolen appliances, broken air conditioning and stripped plumbing and electrical systems.

“Obviously, there were some very good intentions” behind the new ordinance, says Miami-Dade Commissioner Carlos Gimenez, who supported the new buyer awareness law. “But the actual practice, the actual implementing order is somewhat bureaucratic and may have a negative effect on the sale of foreclosed homes in Miami-Dade County. And that is not something we wanted to do.”

Inspections alone can cost banks several thousand dollars and much more to fix major defects. “It is an added cost really for no reason,” says Michelle Gonzalez, whose Miami firm, Floridian First Realty, markets properties for Fannie Mae. She points out that buyers already have time to inspect the home once they’ve signed a contract, and if problems are discovered during the inspection period, they can cancel the contract.

Brokers representing lenders must file an inspection report with the county, including the estimated cost of bringing the property into compliance, according to the new ordinance. After the report is recorded, the county will issue the certificate of use within four days, says Hilda Castillo, spokeswoman for the Department of Planning and Zoning. Without the certificate, lenders can’t accept offers for the properties.

Fort Lauderdale attorney Todd Weston, who represents several national lenders, calls the law another barrier to dispose of foreclosed properties. “It is good reasoning behind the ordinance, but by the same token, it needs to be implemented and rewritten in a way that doesn’t foster delays.”

Some brokers and lenders are pushing for the County Commission to amend the ordinance. “It is never too late, nothing is written on stone,” says Gimenez, adding that he is willing to revisit the ordinance.

Fenet fears that if code violations are reported, banks won’t finance homes and condos that don’t comply with the county’s building and zoning codes. That would limit the pool of buyers for bank-owned homes in the county’s unincorporated areas to cash buyers, he says.

“Cash investors are going to have a field day,” Fenet says. “They will reap the benefits of the new ordinance.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.