According to the Eye on Miami blog, there may be an issue as to the legitimacy of the homestead exemption for Vince Lago’s new house on San Amaro Drive because he has yet to actually live on the premises. This turns out to be potentially a pretty complicated and unclear issue. Please don’t jump to conclusions until you’ve read all of what follows.
I don’t know much about the homestead rules. The Homestead instructions say
Every person who owns and resides on real property in Florida on January 1 and makes the property his or her permanent residence is eligible to receive a homestead exemption up to $50,000.
The heart of the accusation related at Eye on Miami is that Mr. Lago didn’t actually live in the house on San Amaro on January 1, 2012, the relevant date for getting the 2012 exemption. (The exemption was also renewed for 2013.) There are also suggestions that maybe at some relevant times he may not have lived in Coral Gables, which has a one-year residency requirement for candidates, ending on the day of the election.
Since the house in question is just down the street from me, and since I was pretty sure no one had been living in it for some time, I called Mr. Lago to get his side of the story. We met at the house in question and he dictated the following statement to me:
When I moved out of my apartment at 100 Edgewater, in Coral Gables, my wife had just given birth and we were going to be moving into 5200 San Amaro. We bought the house in August 2011, and planned to move prior to the year ending.
What occurred was that as we started fixing up the house — painting, and so on, minor repairs — we were shocked to find mold throughout the entire residence. So we had to remove the drywall from the interior of the home. But we had a bigger issue. The issue was that we had rented our apartment in Edgewater to a new tenant for one year and could not afford to pay a mortgage on this property and to rent another home or apartment.
Due to the mold report and our newborn baby we could not live in a house that had water intrusion and had mold throughout the residence. So our wonderful in-laws invited us to stay with them a few months on Alhambra Circle in Coral Gables. We expected the mold remediation to take two months. But as we began to open walls we realized that the damage was extensive. And we had to replace all the electrical, which required us to see an electrical engineer, draft plans and submit them to city, which is an extensive time-consuming process. Our intent was to move into the house immediately, but the process lagged, due to construction costs and the scope of the project growing in nature. Our intent has and will be to live in this house so we can raise our child. And we plan on moving in the next two or three weeks after the election.
Mr. Lago then showed me a report he’d had done as part of the renovations once they found the first signs of mold on the premises. It said there was a lot of mold. He asked, who would expose a new baby to this?
I asked Mr. Lago how that was responsive to the allegation that he filed for a Homestead exemption when he didn’t live in the home, and thus wasn’t entitled to it. This was his response:
The issue is intent. When Andrew came and ravaged our city, thousands of residents were displaced who continued to hold on to their Homestead while they were displaced for years from their primary residence.
After speaking to both friends and advisors in regards to this issue, I was notified today that my intent to make this my primary residence but being displaced due to the mold infestation was permissible.
When I lived in the Edgewater Dr. apartment I had my homestead exemption. And when I moved out and rented the apartment I transferred my homestead to my new residence on San Amaro Drive.
So there you have it. On the one hand, there is no debate that the property was not being lived in. (Indeed, as one of the people living on the street, I could see it had been empty for a long time. And it’s hardly surprising to discover that a Florida home with no A/C for a few years might develop a bad mold problem.) On the other hand, there’s a claim that an intent to live there blocked by unhealthy conditions satisfies Florida law on what amounts to “residing” at a property.
But does it? Was this a valid homestead exemption?
I am not admitted to the Florida bar, and I don’t claim that I know the definitive answer to the question as to whether mere intent without ever actually living in a home qualifies. We’ll need to find a Florida property or a tax lawyer to tell us that. What I can report is what the Florida Supreme Court has recently said about the subject. Hang on, it’s complicated.
In the recent (Oct. 2012) decision of Garcia v. Andonie, 101 So.3d 339 (Fla 2012), the Florida Supreme Court held that part of the Florida Code relating to homestead tax exemption violated the Florida Constitution:
… we hold that the express language of the Florida Constitution, as amended in 1968, creates the right for every person who owns Florida real property to receive a prescribed reduction in the taxable value of that property[3] where the owner maintains on the property either (1) the permanent residence of the owner or (2) the permanent residence of another legally or naturally dependent on the owner — provided the individual for whom the permanent residence is maintained has no legal impediment to residing on the property on a permanent basis.
In Garcia v. Andonie the taxpayers weren’t living in the house, but their dependents were. The Florida Supreme Court said that sufficed.
When the Florida Constitution was amended in 1968, the homestead tax exemption provision was renumbered and the requirement that the property owner reside on the property was removed. See art. VII, § 6(a), Fla. Const. Article VII, Section 6(a), of the Florida Constitution, as amended in 1968, states in relevant part:
Every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon … upon establishment of right thereto in the manner prescribed by law.
Art. VII, § 6(a), Fla. Const. (emphasis added). Thus, the plain language of the Florida Constitution, as amended in 1968, requires that the property owner maintain on the property either (1) the permanent residence of the owner; or (2) the permanent residence of another legally or naturally dependent upon the owner. Accordingly, under the Florida Constitution there are two separate and independent means by which a property owner’s entitlement to the homestead tax exemption may be accomplished
So how do you tell if a home is “the true permanent residence” of the owner?
Section 196.012(18), Florida Statutes (2006), defines “permanent residence” for ad valorem taxation purposes and states that the inquiry to be made in determining whether one’s property qualifies as a “permanent residence” is whether the property in question is being used as the “true” permanent home of the individual:
“Permanent residence” means that place where a person has his or her true, fixed, and permanent home and principal establishment to which, whenever absent, he or she has the intention of returning….
§ 196.012(18), Fla. Stat. (2006). Accordingly, because the legislative definition of “permanent residence,” consistent with the constitutional context from which it emerges, requires a determination as to whether the property is being used as the true permanent home or residence of the owner or his dependents, most determinations regarding whether a permanent residence is being maintained on Florida property will involve some level of factual inquiry regarding the actual use of the residential property in question.[12] Indeed, section 196.015 states that “[i]ntention to establish a permanent residence in this state is a factual determination,” see § 196.015, Fla. Stat. (2006), not an issue of law. Although section 196.015 contains a number of relevant discretionary factors that “may” be considered to make the factual determination as to whether the applicant for the tax exemption has the requisite intent to establish a permanent residence on his or her Florida property, this provision also cautions that no one factor is “conclusive” on this issue of fact. Id.
Thus, in most instances, an individual’s intent to establish a permanent residence on a piece of Florida real property will present an issue of fact.
In other words, it depends.
The Court also tells us, in footnote 12, that the “true” permanent residence is a separate matter from domicile, so forget anything you know about that concept.
I’m willing to bet that had the Lagos actually moved in, then been forced to move out pending the works, they’d have a very strong case that the San Amaro house was their “true” residence. But never having moved in at all – even accepting that they intended to – makes it a tougher case. So I don’t know. But I think on the facts as he describes them, Mr. Lago has at least an arguable case, maybe more.
Other Issues
In response to the suggestion that Mr. Lago had a City of Miami address at some point, which suggests he might have moved out of the Gables, Mr. Lago vigorously denied the claim. He said,
I have been in Coral Gables for seven years. And before that, for eight years. …. My in-laws are great people, but you think I would rather live with them or in my own residence with my wife and my daughter?”
Mr. Lago added that he suspects the confusion may be due to his Edgewater Dr. address having a 33133 zip code. His street was part of Coral Gables but, he said, many other addresses with that zip code were not.
My short interview with Mr. Lago concluded with this commercial which he asked me to include for him:
What I’m concerned about is the residents of Coral Gables, and making sure that we deliver on pension reform, keeping our streets safe, delivering the senior center, and constructing a Streetscape project which benefits both the city and its end-users.
He’s certainly on message.
Bottom Line
Should your vote in this election turn on the homestead exemption issue? Based on what I think I know right this minute, I don’t think this is anything like the Brad Rosenblatt check affair from two years ago. Like I said above, the exemption might well be legal. I am prepared to believe that the Lagos thought they were entitled to it – they gave up one homestead exemption and picked up the next as they planned to transfer their residence. The Garcia v. Andonie case was decided by the 3rd DCA (the lower court with jurisdiction over Miami-Dade) on Dec 15, 2010, so the Lagos’ homestead exemption was arguably legal on the day it was claimed, although I don’t know if they (or their lawyers) knew of this.
At the end of the day, I think there are better ways to decide who to vote for in Group 2 -– like who is concerned about our getting insurance in the event that the water table rises, or who is funding which candidate.
Or, just maybe, you might wonder whether a person who is surprised to find a serious mold problem in a South Florida home that has been sitting abandoned for years is sufficiently skeptical of what seems like too-good a deal to be an effective Commissioner.