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

Title Evidence; Restrictions; Easements; Limitations Continued

Part A of Section 18 continues the discussion of title by focusing on the time limits that arise following the Buyer’s receipt of the Title Commitment. The Buyer has 5 days to notify the Seller about any specific defects in the title. If the Seller gives the Buyer the Title Commitment less than 5 days before the Closing date, the Buyer can extend the Closing date by an additional 5 days. The Seller is then given a 30 day period to correct the defects. If Buyer does not give Seller any notification of present defects, he is deemed to have accepted the property as it is. Seller must fix the defects within the Cure Period. The Cure Period is the time frame that the Seller is given to fix the defects. If the Seller does not cure the defects within the Cure Period, the Buyer may exercise one of three options: 1) extend the Cure Period to a time no longer than 120 days, 2) agree to accept the title with the defects, or 3) terminate the contract and receive a refund.

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

Title Evidence; Restrictions; Easements; Limitations

Part A of Section 18 discusses Title. The title commitment states that the Seller must provide the Buyer with the owner’s policy of title insurance in the amount of the purchase price prior to or at the Closing. This must be given to the Buyer when the deed is recorded and this policy shall ensure that the Buyer’s title is marketable. This is subject to the following: comprehensive land use requirements such as plans, zonings, and restrictions that are imposed by the government; any restrictions that appear on the Plat or that are common to the subdivision; any recorded oil, gas, and mineral rights that do not have right of entry; specific unplatted utility easements, payment of taxes for the year of closing, assumed mortgages and any additional items unless they were waived. If there is a violation based on the items identified above then a title defect has most likely occurred.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 17: Attorney’s Fees and Costs

Attorney’s Fees and Costs

Section 17 of the Contract discusses Attorney’s Fees and Costs. Here, it states that in signing this Contract, the Buyer and Seller are agreeing to bear their own costs and fees incurred in conducting the mediation and the attorney’s fees. The parties are also agreeing to equally split the mediation fee. In the event of litigation that is permitted by the Contract, the winning party must cover the cost and fees, including reasonable attorney’s fees, of the loosing party that were incurred in the litigation. Paragraph 17 will survive Closing and termination of this Contract.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 16: Default and Dispute Resolution

Dispute Resolution

Section 16 of the Contract discusses Dispute Resolution. Dispute Resolution is a method used by Buyers and Sellers to resolve the claims and controversies that arise from the Contract. The Buyer and Seller are given 10 days after the conflicting request for the Deposit to make an attempt to come to a resolution. However, if they are unable to resolve the issue, the Buyer and Seller are required to attend mediation. The mediator must be certified or have the requisite experience in real estate. This clause will remain in effect after Closing or the termination of the Contract.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 15: Default and Dispute Resolution

Default (Continued)

The second part of section 15 discusses the Seller’s default. If the Seller does not perform their obligation under the Contract for any reason other than failing to make the title marketable after diligent effort, the Buyer is entitled to receive their Deposit back. The return of the Deposit to the Buyer does not constitute a waiver of any action the Buyer may have for damages that resulted from the Seller’s breach. As a result, the Buyer would also be entitled to recover damages or request specific performance.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 15: Default and Dispute Resolution

Default                                                                                        

Part 15 discusses the two different types of defaults the can occur under the Contract. The first type of default is the Buyer’s default. If the Buyer does not perform the Buyer’s obligations under the Contract within the time requirement specified in the Contract, the Seller can recover the Deposit as agreed upon liquidated damages, consideration for execution of the Contract, and as a settlement of any claims. This would therefore release Buyer and Seller from any further obligations under the Contract. Seller also has the option of pursuing dispute resolution as detailed in Paragraph 16 of the Contract. The portion for the Deposit that was paid to the Listing Broker must be split equally between the Listing Broker and the Cooperating broker when the Buyer defaults. Also, the Cooperating Broker’s share must not be greater than the commission that the Listing Broker previously agreed to pay the Cooperating Broker.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 13: Escrow Agent and

Escrow Agent (Continued)                                                 

Part 13 also states that if the Agent is also a licensed real estate broker, they are then required to comply with the provisions of Florida Statute Chapter 475 as amended and the FREC rules which outline the requirement of timely resolving any escrow disputes through mediation, arbitration, interpleader or an escrow disbursement order. In the event of a proceeding between Buyer and Seller where the Agent is made a party to the action as a result of fulfilling their role as Agent under the guidelines of this section or the Agent interpleads the subject matter of the escrow, the Agent will be able to recover their attorney’s fees or costs they incurred. These fees must be paid according to the court order out of the escrow funds or the equivalent. The Agent will not be liable to any party or person for any mis-deliver of the escrowed items unless the mis-delivery was caused by the negligence of the Agent or the Agent’s willful breach of the Contract. The language in this section of the Contract will be deemed to survive after Closing or in the event of the termination of the Contract.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 13: Escrow Agent and Broker

Escrow Agent                                                                       

Part 13 of the Contract states the role of the Escrow Agent. A Closing Agent or Escrow Agent (Agent) is the person who receives the Deposit and agrees by acceptance of the Deposit to deposit it and other funds promptly and hold them in escrow within the State of Florida. This is subject to Collection. The Agent must also disburse the Deposit and other funds in accordance with the terms and conditions of the Contract. However, the Buyer is not excused from performance due to a failure of the funds to be collected. If there is an issue that arises from conflicting demands for the Deposit or a genuine dispute as to who is entitled to the Deposit, this section empowers the Agent to take the actions they deem advisable. If there is doubt about the Agent’s duties, the Agent may continue to hold the funds until the parties agree or there is a relevant court order. The Agent may also disburse the funds to the clerk of courts in the circuit court that has jurisdiction. The section also states that the attorney who represents a party and also acts as an Agent can also represent the party in this type of action. All liability on the part of the Agent will be terminated, except to the extent of accounting for the items delivered out of escrow, when all of the parties concerned in the action are properly notified.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 12(f) Continued: Property Maintenance, Condition, Inspections and Examinations

Property Inspection and Repair                                      

Section (f) contains information on the repair standards, assignment of repair, treatment contracts, and warranties. This section states that all repairs and replacements under the contract must be completed in a good and workmanlike manner by a licensed person. These repairs must also be done using quality materials that are comparable or better than those existing as of the Effective Date of the Contract. Not including the repairs following a WDO inspection as detailed in the Contract, the Seller will assign all the repair, treatment and warranties maintenance contracts and warranties to the Buyer. This will take place at Closing and be at Buyer’s option and cost.

Important Tips for Completing a Residential Contract for Sale and Purchase – Part 12(e) Continued: Property Maintenance, Condition, Inspections and Examinations

Section (e) addresses the Walk-through Inspection/ Re-Inspection. On the Closing Date or a day prior to Closing, when specified by Buyer, the Buyer or his representative may perform a walk-through inspection  or re-inspection of the Property to verify that the  Seller has maintained the Property according to the Maintenance Requirement and has made all necessary repairs and met all obligations specified in the Contract. Buyer may also verify that all items of Personal Property are on the Property as well.

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