1163.081 Financing qualifying improvements to residential property.—
(1) RESIDENTIAL PROPERTY PROGRAM AUTHORIZATION.—
(a) A program administrator may only offer a program for financing qualifying improvements to residential property within the jurisdiction of a county or municipality if the county or municipality has authorized by ordinance or resolution the program administrator to administer the program for financing qualifying improvements to residential property. The authorized program must, at a minimum, meet the requirements of this section.
(b) Pursuant to this section or as otherwise provided by law or pursuant to a county’s or municipality’s home rule power, a county or municipality may enter into an interlocal agreement providing for a partnership between one or more counties or municipalities for the purpose of facilitating a program to finance qualifying improvements to residential property located within the jurisdiction of the counties or municipalities that are party to the agreement.
(c) A county or municipality may deauthorize a program administrator through repeal of the ordinance or resolution adopted pursuant to paragraph (a) or other action. Any recorded financing agreements at the time of deauthorization shall continue, except any financing agreement for which the provisions of s. 163.086 apply.
(d) An authorized program administrator may contract with one or more third-party administrators to implement the program as provided in s. 163.084.
(e) An authorized program administrator may levy non-ad valorem assessments to facilitate repayment of financing qualifying improvements. Costs incurred by the program administrator for such purpose may be collected as a non-ad valorem assessment. A non-ad valorem assessment shall be collected pursuant to s. 197.3632 and, notwithstanding s. 197.3632(8)(a), shall not be subject to discount for early payment. However, the notice and adoption requirements of s. 197.3632(4) do not apply if this section is used and complied with, and the intent resolution, publication of notice, and mailed notices to the property appraiser, tax collector, and Department of Revenue required by s. 197.3632(3)(a) may be provided on or before August 15 of each year in conjunction with any non-ad valorem assessment authorized by this section, if the property appraiser, tax collector, and program administrator agree. The program administrator shall only compensate the tax collector for the actual cost of collecting non-ad valorem assessments, not to exceed 2 percent of the amount collected and remitted.
(f) A program administrator may incur debt for the purpose of providing financing for qualifying improvements, which debt is payable from revenues received from the improved property or any other available revenue source authorized by law.
(2) APPLICATION.—The owner of record of the residential property within the jurisdiction of an authorized program may apply to the authorized program administrator to finance a qualifying improvement. The program administrator may only enter into a financing agreement with the property owner.
(3) FINANCING AGREEMENTS.—
(a) Before entering into a financing agreement, the program administrator must make each of the following findings based on a review of public records derived from a commercially accepted source and the property owner’s statements, records, and credit reports:
1. There are sufficient resources to complete the project.
2. The total amount of any non-ad valorem assessment for a residential property under this section does not exceed 20 percent of the just value of the property as determined by the property appraiser. The total amount may exceed this limitation upon written consent of the holders or loan servicers of any mortgage encumbering or otherwise secured by the residential property.
3. The financing agreement does not utilize a negative amortization schedule, a balloon payment, or prepayment fees or fines other than nominal administrative costs. Capitalized interest included in the original balance of the assessment financing agreement does not constitute negative amortization.
4. All property taxes and any other assessments, including non-ad valorem assessments, levied on the same bill as the property taxes are current and have not been delinquent for the preceding 3 years, or the property owner’s period of ownership, whichever is less.
5. There are no outstanding fines or fees related to zoning or code enforcement violations issued by a county or municipality, unless the qualifying improvement will remedy the zoning or code violation.
6. There are no involuntary liens, including, but not limited to, construction liens on the residential property.
7. No notices of default or other evidence of property-based debt delinquency have been recorded and not released during the preceding 3 years or the property owner’s period of ownership, whichever is less.
8. The property owner is current on all mortgage debt on the residential property.
9. The property owner has not been subject to a bankruptcy proceeding within the last 5 years unless it was discharged or dismissed more than 2 years before the date on which the property owner applied for financing.
10. The residential property is not subject to an existing home equity conversion mortgage or reverse mortgage product.
11. The term of the financing agreement does not exceed the weighted average useful life of the qualified improvements to which the greatest portion of funds disbursed under the assessment contract is attributable, not to exceed 20 years. The program administrator shall determine the useful life of a qualifying improvement using established standards, including certification criteria from government agencies or nationally recognized standards and testing organizations.
12. The total estimated annual payment amount for all financing agreements entered into under this section on the residential property does not exceed 10 percent of the property owner’s annual household income. Income must be confirmed using reasonable evidence and not solely by a property owner’s statement.
13. If the qualifying improvement is for the conversion of an onsite sewage treatment and disposal system to a central sewerage system, the property owner has utilized all available local government funding for such conversions and is unable to obtain financing for the improvement on more favorable terms through a local government program designed to support such conversions.
(b) Before entering into a financing agreement, the program administrator must determine if there are any current financing agreements on the residential property and if the property owner has obtained or sought to obtain additional qualifying improvements on the same property which have not yet been recorded. The existence of a prior qualifying improvement non-ad valorem assessment or a prior financing agreement is not evidence that the financing agreement under consideration is affordable or meets other program requirements.
(c) Findings satisfying paragraphs (a) and (b) must be documented, including supporting evidence relied upon, and provided to the property owner prior to a financing agreement being approved and recorded. The program administrator must retain the documentation for the duration of the financing agreement.
(d) If the qualifying improvement is estimated to cost $10,000 or more, before entering into a financing agreement the program administrator must advise the property owner in writing that the best practice is to obtain estimates from more than one unaffiliated, registered qualifying improvement contractor for the qualifying improvement and notify the property owner in writing of the advertising and solicitation requirements of s. 163.085.
(e) A property owner and the program administrator may agree to include in the financing agreement provisions for allowing change orders necessary to complete the qualifying improvement. Any financing agreement or contract for qualifying improvements which includes such provisions must meet the requirements of this paragraph. If a proposed change order on a qualifying improvement will increase the original cost of the qualifying improvement by 20 percent or more or will expand the scope of the qualifying improvement by more than 20 percent, before the change order may be executed which would result in an increase in the amount financed through the program administrator for the qualifying improvement, the program administrator must notify the property owner, provide an updated written disclosure form as described in subsection (4) to the property owner, and obtain written approval of the change from the property owner.
(f) A financing agreement may not be entered into if the total cost of the qualifying improvement, including program fees and interest, is less than $2,500.
(g) A financing agreement may not be entered into for qualifying improvements in buildings or facilities under new construction or construction for which a certificate of occupancy or similar evidence of substantial completion of new construction or improvement has not been issued.
(4) DISCLOSURES.—
(a) In addition to the requirements imposed in subsection (3), a financing agreement may not be executed unless the program administrator first provides, including via electronic means, a written financing estimate and disclosure to the property owner which includes all of the following, each of which must be individually acknowledged in writing by the property owner:
1. The estimated total amount to be financed, including the total and itemized cost of the qualifying improvement, program fees, and capitalized interest;
2. The estimated annual non-ad valorem assessment;
3. The term of the financing agreement and the schedule for the non-ad valorem assessments;
4. The interest charged and estimated annual percentage rate;
5. A description of the qualifying improvement;
6. The total estimated annual costs that will be required to be paid under the assessment contract, including program fees;
7. The total estimated average monthly equivalent amount of funds that would need to be saved in order to pay the annual costs of the non-ad valorem assessment, including program fees;
8. The estimated due date of the first payment that includes the non-ad valorem assessment;
9. A disclosure that the financing agreement may be canceled within 3 business days after signing the financing agreement without any financial penalty for doing so;
10. A disclosure that the property owner may repay any remaining amount owed, at any time, without penalty or imposition of additional prepayment fees or fines other than nominal administrative costs;
11. A disclosure that if the property owner sells or refinances the residential property, the property owner may be required by a mortgage lender to pay off the full amount owed under each financing agreement under this section;
12. A disclosure that the assessment will be collected along with the property owner’s property taxes, and will result in a lien on the property from the date the financing agreement is recorded;
13. A disclosure that potential utility or insurance savings are not guaranteed, and will not reduce the assessment amount; and
14. A disclosure that failure to pay the assessment may result in penalties; fees, including attorney fees; court costs; and the issuance of a tax certificate that could result in the property owner losing the property and a judgment against the property owner, and may affect the property owner’s credit rating.
(b) Prior to the financing agreement being approved, the program administrator must conduct an oral, recorded telephone call with the property owner during which the program administrator must confirm each finding or disclosure required in subsection (3) and this section.
(5) NOTICE TO LIENHOLDERS AND SERVICERS.—At least 5 business days before entering into a financing agreement, the property owner must provide to the holders or loan servicers of any existing mortgages encumbering or otherwise secured by the residential property a written notice of the owner’s intent to enter into a financing agreement together with the maximum amount to be financed, including the amount of any fees and interest, and the maximum annual assessment necessary to repay the total. A verified copy or other proof of such notice must be provided to the program administrator. A provision in any agreement between a mortgagor or other lienholder and a property owner, or otherwise now or hereafter binding upon a property owner, which allows for acceleration of payment of the mortgage, note, or lien or other unilateral modification solely as a result of entering into a financing agreement as provided for in this section is unenforceable. This subsection does not limit the authority of the holder or loan servicer to increase the required monthly escrow by an amount necessary to pay the annual assessment.
(6) CANCELLATION.—A property owner may cancel a financing agreement on a form established by the program administrator within 3 business days after signing the financing agreement without any financial penalty for doing so.
(7) RECORDING.—Any financing agreement executed pursuant to this section, or a summary memorandum of such agreement, shall be submitted for recording in the public records of the county within which the residential property is located by the program administrator within 10 business days after execution of the agreement and the 3-day cancellation period. The recorded agreement must provide constructive notice that the non-ad valorem assessment to be levied on the property constitutes a lien of equal dignity to county taxes and assessments from the date of recordation. A notice of lien for the full amount of the financing may be recorded in the public records of the county where the property is located. Such lien is not enforceable in a manner that results in the acceleration of the remaining nondelinquent unpaid balance under the assessment financing agreement.
(8) SALE OF RESIDENTIAL PROPERTY.—At or before the time a seller executes a contract for the sale of any residential property for which a non-ad valorem assessment has been levied under this section and has an unpaid balance due, the seller shall give the prospective purchaser a written disclosure statement in the following form, which must be set forth in the contract or in a separate writing:
QUALIFYING IMPROVEMENTS.—The property being purchased is subject to an assessment on the property pursuant to s. 163.081, Florida Statutes. The assessment is for a qualifying improvement to the property and is not based on the value of the property. You are encouraged to contact the property appraiser’s office to learn more about this and other assessments that may be provided by law.
(9) DISBURSEMENTS.—Before disbursing final funds to a qualifying improvement contractor for a qualifying improvement on residential property, the program administrator shall confirm that the applicable work or service has been completed or, as applicable, that the final permit for the qualifying improvement has been closed with all permit requirements satisfied or a certificate of occupancy or similar evidence of substantial completion of construction or improvement has been issued.
(10) CONSTRUCTION.—This section is additional and supplemental to county and municipal home rule authority and not in derogation of such authority or a limitation upon such authority.
History.—s. 2, ch. 2024-273.
1Note.—Section 9, ch. 2024-273, provides that “[a] current contract, agreement, authorization, or interlocal agreement between a county or municipality and a program administrator entered into before July 1, 2024, shall continue without additional action by the county or municipality. However, the program administrator must comply with this act, and any contract, agreement, authorization, or interlocal agreement must be amended to comply with this act.”
