Author Archives: Tanishia Stokes

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.