In July 2019, House Bill 207 became an effective state law in Florida, and it now provides important protections to property owners and developers, with regard to impact fees. The law is designed to create state-wide consistency for determining and exacting impact fees from property owners and developers who are seeking to start new residential construction projects. The law’s two main provisions will facilitate new home construction and remove potential barriers that local government bodies were, in some cases, placing.
No More Pre-Payment Of Impact Fees
Local jurisdictions are no longer allowed to require payment of impact fees before issuing building permits, platting developments, or prior to the approval of development or subdivision plans. This means that developers and property owners no longer have to front and carry the cost of impact fees. The fees will be payable as part of the initial sale (or when the occupancy permit is issued for private construction of new homes).
Dual Rational Nexus Test
Impact fees are intended to help local governments fund the infrastructure projects made necessary by population growth due to new home construction. Given that both federal and state funding for new infrastructure projects have been reduced, and are not likely to increase significantly in the foreseeable future, there has been a trend in some municipalities toward using impact fees that are no longer allowed, like normal operational, personnel, or maintenance costs, or to cover shortfalls on other infrastructure projects. The new law requires that there be a reasonable connection, called a rational nexus, between impact fees and the actual expenditures required as a result of the new home construction, and that the residents of those new homes receive some benefit from the impact fees they pay.
Further, the impact fees are now required to be a fair and proportionate share of the costs of improvements made necessary by building a new development, and the fees are not allowed to exceed the cost of any improvements, and if outside funds, like local tax, state or federal money, pay for part of the improvements, those contributions now have to be credited and the impact fees reduced accordingly. If a planned improvement project paid for with impact fees is canceled, refunds must now be issued.
Finally, impact fee funds must be spent within a reasonable timeframe or encumbered for future use; they cannot be rolled into a general fund or used to address other infrastructure deficiencies unrelated to the development they were paid in relation to.
Qualified Legal Counsel For Impact Fee Issues
New regulations tend to bring new issues, and changes to impact fee regulations in Florida are no exception. If you need help making sure you’re not paying more than your fair share, or have questions about how this new law is being applied to your specific situation, the experienced real estate attorneys at Overstreet, Miles, Cumbie Finkenbinder & Bondy can help. Give us a call or contact us online to schedule a consultation.