Residential Real Estate

Standard Florida Real Estate Contract (Part 1 of 2)

Published on: September 14, 2013 | by ESQ.title

By: Dan Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

The Florida BAR and Florida Association of Realtors recently adopted a new standard real estate contract. Because the new “FAR-BAR” contract will control the majority of residential real estate transactions in Florida, it is important to understand what amendments were made. The following is not an exhaustive list of differences between the old and new FAR-BAR contract, but summarizes some of the major changes:

Personal Property

The Check Boxes in Paragraph 1(d) were removed. To simplify the contract three items were added to the list of items transferred by the seller at the time of sale: (1) refrigerators, (2) smoke detectors; and (3) storm shutters. If the buyer and seller want to include additional items of personal property to be transferred to the buyer those items can be inserted at the bottom of Paragraph 1(d).

Is a New Owner Responsible for Condo or HOA Liens After Buying a Foreclosure in Miami or Broward County?

Published on: September 1, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Given that there are literally tens of thousands of homeowners and condominium associations in South Florida, it is no wonder that purchasers of foreclosure properties in Miami-Dade and Broward County frequently have questions about whether they are liable for past due homeowners or condominium assessments after purchasing property at a foreclosure sale. Once the initial excitement of the new purchase wears off, foreclosure purchasers frequently find themselves the target of associations seeking to collect past due assessments owed by the previous homeowner.

When confronted with this scenario, new property owners often recoil at the notion that they are responsible for the past due assessments: “What do you mean I owe the association $10,000 in back assessments, I just bought the property at a foreclosure sale free and clear last week? Those fees are the responsibility of the prior owner, not me!” Although this reaction is understandable, it is only partially correct.

Florida “As Is” Real Estate Contracts

Published on: August 12, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

As the real estate market in South Florida continues to heat up, more homeowners will undoubtedly list their homes for sale in Miami-Dade and Broward County. An important issue that all prospective homebuyers should investigate is what, if any, encumbrances are on the property being sold. Encumbrances are loosely defined as any claims, liabilities, violations, or problems that lessen a property’s value or restrict its marketability. For instance, perhaps the property is located in an uninsurable flood zone, violates height restrictions, or has an illegal mother in law suite that violates the city or county code. Unfortunately, the prospective purchaser may not notice any of these problems at the initial or even subsequent visits to the property, and so they may not be able to include those problems as desired repairs in the initial offer.

Fortunately, the standard Florida Realtors/Florida Bar approved contract provides the prospective purchaser with the right to inspect the property for a limited amount of time and back out if he or she finds too much to be wrong with the property. The default inspection period of time is 15 calendar days unless the parties agree otherwise. The property inspection clause provides the purchaser with the opportunity to retain a real estate lawyer in order to perform the necessary due diligence on the property to evaluate the situation. If the prospective purchaser finds problems, the property inspection clause gives the prospective buyer the right to terminate the contract without losing their deposit. Of course, the buyer also has the right to demand that the seller reduce the sales price to allow the prospective buyer to repair the property themselves. If the seller refuses to amend the contract, the purchaser can then choose to exercise his or her right to back out of the contract.

What Is a Florida Realtor’s Responsibility To Their Client?

Published on: July 28, 2013 | by ESQ.title

By: Daniel T. Pascale, Esq.

A rarely investigated subject by most buyers and sellers of residential real estate in South Florida is what role their realtor is playing in the transaction. By Florida Statute, there are three different roles that a realtor may play in a real estate deal. Whether you are buying or selling home, it is important to understand what capacity your realtor is acting in.

In Florida, a realtor may act as a single agent, a transaction broker, or maintain a “no representation status”. Most realtors in Miami-Dade and Broward County are acting as transaction brokers. In fact, and while it may come as a surprise, it is presumed that your realtor is acting as a transaction broker unless agreed to in writing otherwise. A transaction broker is in essence working to close the transaction and is not in a fiduciary relationship with their client. “Fiduciary” means that the broker is “in a relationship of trust and confidence” with the buyer or seller, has the duty of loyalty, confidentiality, obedience, full disclosure, and accounting, and also the duty to use skill, care, and diligence.

Realtors Acting As A Transaction Broker

Pursuant to statute, a transaction broker provides “limited representation to a buyer, a seller, or both … but does not represent either in a fiduciary capacity or as a single agent.” The transaction broker is working as a facilitator between the buyer and seller to close the transaction and does not owe an undivided loyalty to either party. Nonetheless, the transaction broker must, among other things, account for all funds, use skill, care, and diligence in the transaction, deal honestly and fairly with the parties, and disclose all known facts that materially affect the value of residential property that are not readily observable to the buyer. In addition, the transaction broker is prohibited from disclosing either party’s true “bottom line” regarding price negotiations or financing terms, the motivation of either party, and other matters that either party requests be kept confidential.