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Author Archives: Tanishia Stokes

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Buyers Beware of Foreclosures in The Chain of Title

While foreclosures in Florida have significantly decreased, many properties on the market still require review of foreclosure cases in the chain of title.  Third-party investors acquired properties across Florida at foreclosure sales, and are now selling these properties for a profit.  Unfortunately, some investors did not review the foreclosure file or perform a title search prior to binding at the sale and therefore did not discover errors made during the foreclosure action.  Purchasers should be cautioned to examine and review the foreclosure in advance of purchasing the property in foreclosure or post-foreclosure to make sure that title to the property is insurable and that any defect discovered through examination can be resolved prior to closing.

Top Mistakes to Avoid with Commercial Real Estate Contracts

  1. Get It in Writing: Many times buyers and sellers draft their own contracts and write them in such a way that they’re not legally enforceable.  The courts will only look at the four corners of the contract in any real estate dispute.  The Court will not ask what was the parties’ verbally discussion.  If it is not in the contract, then it will not count.
  2. Being Earnest:   In most cases, a seller wants the amount of earnest money in a contract to be as high as possible, while a buyer wants the opposite.  Making a large amount of earnest money deposit may be a good move for the Buyer.  There are a lot of competition out there; therefore, making a large earnest money deposit is a good way of showing that the buyer is serious. When things go awry and the need arises for a buyer to terminate the contract, too often the buyer will not follow the required steps outlined in the agreement.  There are many disputes where notice is given verbally instead of in writing and if it’s not done the right way, your notice may be ineffective.
  3. When Rezoning is a Factor: Often a sale is contingent upon the buyer obtaining rezoning for the site it is purchasing. In those cases, a buyer should make sure that the contract closing date accounts for the period of time during which a third party can appeal the approval of a rezoning approval.  Drafting a contract which includes terms and conditions in this matter can make sure the buyer is not forced to buy a property where some neighbor is suing to challenge the zoning approval.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Closing Location; Documents; and Procedure

Part 1 of Section I discusses the location of the Closing and the Closing documents. The Location of the Closing must be in the county where the Property is located at either an attorney’s office or the Closing Agent’s office. It can be done by mail or electronically. The Closing documents must be signed and delivered by the Seller prior to the Closing. These documents include the deed, the bill of sale, certificate(s) of title or other documents necessary to transfer title to the Property, construction lien affidavit(s), owner’s possession and no lien affidavit(s), and assignments of leases. The Seller is required to provide the Buyer with paid receipts of all improvements done to the property that is outlined in the Contract. The Buyer in turn is required to furnish and pay for the survey, flood elevation certification and the other documents that are required by the Buyer’s lender.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Conveyance

Part H of Section 18 states what the Seller is conveying. Seller is required to convey to the Buyer marketable title to the Real Property. Seller’s marketable title is conveyed by statutory warranty. This is subject only to the matters underlined in Standard A of the Contract and those accepted by the Buyer. Personal property must be transferred by bill of sale with warranty of title, subject only to provisions within the Contract.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Force Majeure

Part G of Section 18 discusses the concept of Force Majeure. Force Majeure is defined as occurrences that are not reasonably within the control of the Buyer or Seller such as acts of God, hurricanes, earthquakes, floods, fire, or unusual transportation delays, wars, insurrections, acts of terrorism, etc. When these situations occur, Buyer or Seller will not be required to perform any obligation under the Contact or be held liable for damages to the other party as long as the performance or non-performance of the obligation was the result of Force Majeure. The time periods of the Contract will be extended for the period of time the Force Majeure has prevented performance under the Contract. However, if performance was prevented for more than 14 days after the Closing date, any party has the ability to terminate the Contract by delivering written notice to the other party. The deposit will also need to be refunded and the Buyer and Seller will be released from all further obligations under the Contract.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Time

Part F of Section 18 discusses the time of the Contract. The section states that Calendar days will be used to calculate all time periods within the Contract. Time is of the essence in this Contract. All time periods specified in the Contract, with the exception of the time for acceptance and the Effective date, will extend to 5:00pm of the next business day at the location of the property if a time period ends on a Saturday, Sunday, or national legal holiday.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Liens

Part E of Section 18 discusses Liens. The Seller is required to sign an affidavit stating that 1) there are no claims of liens or potential lienors to the Seller’s knowledge and, 2) no repairs have been undertaken in the property for 90 days prior to Closing Date. If the real property was improved during the 90 day time period prior to Closing, Seller must give the Buyer the releases or waivers of any construction liens that are signed by all the contractors, subcontractors, suppliers, and material men involved. A second Sellers’s lien affidavit must also be signed that states the names of all the contractors, subcontractors, suppliers, and everyone involved in the repair that confirms that all charges of these repairs and improvements that could result in a construction lien have been paid or will be paid at Closing.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Lease Information

Part D of Section 18 discusses Lease Information. It requires that 10 days before Closing, the Seller must provide the Buyer with the estoppel letters from the tenants of the property. These estoppel letters are to specify the duration of and type of occupancy, the rent, security deposits, and advanced rent. If Seller cannot get the estoppel letters from the tenants, the Seller must then produce a Seller’s affidavit that contains the same information that the estoppel letters would have contained. Seller must then get tenants to confirm this information. If the Seller is unable to confirm this information, then Buyer may deliver written notice to Seller within 5 days before the Closing Date that would terminate the Contract and release both parties from any further obligation.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Ingress and Egress

Part C of Section 18 discusses Ingress and Egress. The Ingress and Egress is the right to enter and exit ones property. In this section, the Seller represents that there is Ingress and Egress to the property and that the property is insurable under Standard A. There is no exception for lack of legal right of access needed.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 18: Standards For Real Estate Transactions

Survey

Part B of Section 18 discusses the Survey. Here, the Buyer is required to give the Seller written notice of potential issues that the Survey discloses. These issues can include encroachments on the property, improvements that violate restrictions, covenants or government regulations, or easements that encroach on the property of others. The Buyer is required to deliver to the Seller a copy of the Survey and the written notice within 5 days of the Buyer’s receipt of the Survey but it cannot be later than the Closing. The Survey will constitute a title defect subject to the Seller’s obligation to cure under Part A of the Standards section of the Contract, only if written notice and the Survey is delivered in a timely fashion to the Seller. However, if the Seller has already had a survey done and has delivered it to Buyer, then Seller must also execute an affidavit attesting that there was no change to the prior survey.

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