Bills Facing Florida Legislature Could Impact Commercial Real Estate

Commercial real estate trade organizations and development watchdog groups are tracking various bills Florida’s state legislature might consider in its new session, which begins March 2, that could affect land use, development and real estate-related COVID-19 litigation.

One bill that’s already generated buzz in the state is HB 7/SB 72, which would create hurdles for anyone wanting to bring civil lawsuits against businesses for coronavirus-related claims. While there's a lot of support for the bill, attorney Angela de Cespedes, partner at Saul Ewing Arnstein & Lehr, told Bisnow that such bills are popping up all over the country, and while they’re well-intentioned, they could backfire for commercial real estate owners, operators and tenants.

Many of them are written to make it difficult for a plaintiff to bring a case, but also outline exceptions so that a plaintiff may prevail if a business is negligent. In doing so, these bills could provide a “road map” for plaintiffs that gives them leverage to force a settlement, de Cespedes said.

A critical component of any negligence action is causation, de Cespedes said, and there’s almost no way to prove that a person contracted the coronavirus at any particular place or time. The Florida bill proposes that in order to bring a case, a plaintiff must plead with specificity and provide an affidavit from a doctor who believes the plaintiff contracted the disease at a particular establishment. Then, the court determines whether the defendant — the business owner or property owner — made a good-faith effort to substantially comply with government-issued health standards. If so, the case would be dismissed.

“That sounds fantastic. That sounds wonderful,” de Cespedes said.

But, she says it's not.

“The court is going to be placed in a position where they have to hold some kind of evidentiary hearing and allow for limited discovery on both sides to be able to establish that,” she said.

Even though the bill claims that the burden belongs to the plaintiff, both parties could enter evidence, and the hearing would be comparable to a mini bench trial, de Cespedes said. Even if the plaintiff has a slim chance of prevailing, just to get to this motion-to-dismiss phase could be extremely costly and will clog up the courts, de Cespedes worries. Businesses that can ill afford the legal bills might opt to settle in order to end the case early, she said.

HB 219/SB 522 has also been moving through committees. This bill continues a years-long push-pull between state and local governments over regulation of vacation rental platforms like Airbnb.

The state legislature in 2011 banned municipalities from adopting new vacation rental rules but grandfathered in old rules, according to the Herald-Tribune. In 2014, that was reversed. SB 1128 would go back to the old standard and implement taxation by the state.

Airbnb supports the bill but the hotel industry is mixed, the Miami Herald reported. Chip Rogers, president and CEO of the American Hotel and Lodging Association, told the paper he is against pre-empting local zoning laws.

“No other business gets this type of preemption. It’s unheard of anywhere else in the country where a local city can’t enforce its own zoning on properties,” Rogers said.  

Thomas G. “Trey” Wilson III, president of NAIOP Florida, said his organization is focused on supporting HB 15/SB 50, which would make internet retailers pay sales tax, just like brick-and-mortar retailers must.

"We see this as something that should have been done before and is now an opportunity for an untapped resource,” Wilson said.

Another concern for NAIOP is HB 415/SB 360.

“There is currently a law that requires fire radio antennas be installed in buildings to help first responders communicate with one another, when they're in the building. That's obviously well-intentioned," Wilson said.

"But retroactively placing that equipment in existing buildings and implementing it in new ones is cost-prohibitive. And we believe that technology is going to catch up with the times such that implementation of those devices isn't necessary to serve the purpose, and we're supportive of these bills, which will delay that implementation,” he said.

NAIOP and Florida real estate agents are both focused on chipping away at Florida’s Business Rent Tax. Only Florida, which has no state income tax and thus must generate revenue in other ways, charges such a tax. Real estate industry groups have in past years been successful in getting it lowered.

"Currently set at 5.5%, the tax is a burden on businesses throughout the state that might be looking to expand, hire more employees, improve benefits, raise salaries, or invest in the business in other ways," said Tom Butler, public policy communications director for Florida Realtors. "Reducing the tax this year would also provide businesses with some measure of relief as they work to stay open and eventually recover from the negative impacts of the ongoing pandemic.”

Florida Realtors publishes a list of dozens of bills it is tracking online. Butler noted that the bill filing deadline is not until next month and more measures will likely be introduced.

Nonprofit 1000 Friends of Florida, which fights sprawl and advocates for sustainable growth, also tracks bills that affect land use.

Several bills would cut back local governments' ability to control development. HB 55/SB 284 would bar local governments from having authority over design review for residential buildings. HB 337/SB 750 would restrict impact fees imposed by local governments or special districts. SB 916 would weaken local governments’ ability to regulate tree removal or pruning.

Among the projects opposed by 1000 Friends of Florida has been the Multi-use Corridors of Regional Economic Significance (M-CORES) project, which would put three new highway toll roads through what are now mostly rural parts of the state. Critics have questioned the need for the roads.

Jane West, policy and planning director for the organization, said three different bills could potentially halt or repeal the project, but those are being tweaked, so 1000 Friends hasn’t yet taken a position on them.

A couple of laws passed in 2019 stipulated that when local governments require developers to build affordable units or contribute to an affordable housing fund in exchange for approval of their projects, that contribution must be cost-neutral for the developer. HB 6067 would repeal the provisions. 

West said that 1000 Friends isn’t taking a position on that because affordable housing is so critical.

"I get that the developers shouldn’t necessarily be incentivized to do that, but there's no other way to get it done, quite frankly,” she said. 

West said "the worst one of all" among the pending bills is SB 62, which would eliminate Florida's 10 Regional Planning Councils, which handle regional functions that neither the state nor individual municipalities are able to — such as coordinating regional efforts for hurricane recovery, environmental restoration and sea-level rise.