Florida Real Estate Law 101
Florida Real Estate law fundamentals and statutes are necessary for each and everyone to understand as an essential tool in real estate transactions. There are 3 main reasons you should know some basic real estate law principles. The first is that real estate law governs your rights when you transact on the property. The second reason is that it governs how you transfer property to others. The third is it can also govern the land and personal property. There is also the discussion of a freehold vs. non-freehold estate, what kind of estates you have, and how that all works with Florida real estate law principles.
The two primary sources of our real estate laws. The first source is statues, the second is the common law. Florida real estate law determines ownership of property. It does this through granting and defining title to real property. Our property laws involve issues and principles of a freehold estate which generally means ownership is defined as possession or actual ownership of the property. Real estate law can also relate to tenancies. Tenancies are the result of executing on a contract or agreement whether verbal or written. The main tenancy is usually the result of lease or rental agreement . A verbal lease agreement can be a tenancy at will or an estate for months.
A tenancy is a sort of possession right which was originally created by the Early English Common Law. Most of the common law rules are no longer followed as they are not practical in today’s legal and real estate environment. Most of these older statues have either been repealed or replaced with newer more modern ones. Most statutes consist of the essential elements of a lease or rental agreement which must be agreed upon before any further action or rights can even be discussed. While there are some differences there are many similarities to real estate law in Florida and in other states as well.
Florida real estate law governs real estate in a large amount of ways. It governs all real estate transaction and related law. All agreements must comply with the statutes or they are voidable by the parties. Also, title to the property may be lost if there is non-compliance. Title, conveyed in the proper way, provides certainty, or peace of mind, and allows the parties to transfer ownership in a way that the rights of the parties are fairly protected. Florida real estate law also deals with problems that arise from disputes which involve land, real property, realty, and real estate.
Property Disclosures in Florida
Another common Florida real estate law question is "What are the disclosure requirements for property sellers?". Sellers of real property in Florida must follow certain rules concerning disclosures as mandated by the Florida Bar Association’s residential purchase contract. Many residential real estate transactions use the Florida Bar Association’s residential contract form, which requires sellers to make certain disclosures and certifications.
In addition to the standard Florida Bar Association contract form disclosures, sellers of real property have created a unique problem for themselves and for Florida real estate attorneys when the seller fails to advise the buyer of a property defect that is known to, or could have been known by, the seller and this defect relates to the use of the property. Often, a seller will report as a "leak" an issue that occurs with plumbing or other pipes, but will not report as a "leak" that water is entering the building through an intentional opening in the roof for the purpose of air conditioning. The problem arises when the leak, reported by the seller, occurs and the buyer moves into the property.
The Florida Real Estate Commission allowed a form titled "Residential Property Owner Disclosure Summary" to be used. However, this summary is not a part of the Florida Bar Association residential contract form and I generally do not recommend using the form. The use of the form does not affect the liabilities of the parties in connection with the sale or rental of the property.
What You Need to Know About Tenancy and Landlord Rights
Florida real estate laws provide protections for both landlords and tenants in property transactions, both residential and commercial.
Most residential real estate agreements in Florida require a security deposit of equal to one to two months of rent, a lease term of six months, notification of intent to renew or otherwise vacate the property at least 60 days before the end of the lease term, and the right to renew at current or higher rent prices. Florida law requires that, within 30 days of the landlord’s receiving the tenant’s security deposit, the landlord must either return it or send the tenant notice of intention to impose a claim against the deposit. If the tenant intends to dispute the claim, the tenant may request a hearing and the landlord must realistically make an effort to appear before the court. Any deposit remaining after the landlord’s claim is paid to the tenant within 15 days after such a hearing.
A tenant may not be evicted in retaliation for requesting maintenance services or for exercising other legal rights. The tenant may deduct the cost of necessary repairs from future rent payments if the landlord neglected or refused to make the repairs. The tenant also has the right to terminate a lease if the landlord fails to act on needed repairs within seven days of receiving notice. Landlords in Florida must also give tenants at least 30 days’ notice before raising the rent or terminating a residential lease. For a commercial lease, the landlord only must provide the amount of time specified in the lease.
Landlords and tenants often encounter issues with quiet enjoyment, which means that the tenant has the right to the exclusive use of a property. A landlord cannot enter the property without permission, except to turn off the water, electric, heat and air conditioning (if the utilities are in the landlord’s name) and to inspect the property. The landlord must give reasonable notice (at least 12 hours) but no more than 24 hours prior to entering the property.
All You Need to Know About Title Insurance in Florida
Buying a new home in Florida is one of the largest investments you will ever make and, like other such investments, you should protect yourself with insurance. Title insurance is different from other insurance you may be familiar with. It is purchased with a one-time premium payment at the closing of your home purchase or purchase of a vacant parcel of land.
You may be asking yourself, "Why do I need title insurance?" After all, the seller has owned the home for several years, right? Shouldn’t it have good title? Hopefully, it will, but not necessarily. Title to real estate is not guaranteed. Surprising, but true. In fact, title to real estate is not even guaranteed by the State of Florida. The way that title to real property has been passed down by the state of Florida is through the court system. In other words, whether transferring title through a quit claim deed or warranty deed, if there is an issue of title, that dispute will be decided by a Judge and ultimately determined by the court system. A title search will only be able to tell you what has been recorded in the Official Records of Hernando County, Florida. First, although a title company will run a judgment search, not all judgments are recorded in the official records. A judgment that is not recorded in the official records is not a lien on your property, however, it could be an issue if you were to sell your property and the judgment were to be filed at that time in the name of the person on the judgment. Secondly, title companies deny claims every day. The reason they deny claims is not because the claim is valid but rather it is because the title insurance policy that you purchased does not cover the claim.
The best thing to do is to talk to your attorney. If you haven’t closed on the property yet, ask your attorney if they suggest you purchase a title insurance policy. If you have already closed on the property and don’t have title insurance, ask your attorney what you should do. If you have a title insurance policy and need to file a coverable claim, contact your attorney and he or she may be able to assist you with filing a claim.
Understanding Foreclosure Law in Florida
Florida’s mortgage foreclosure laws are set forth in the "Florida Rules of Civil Procedure," and the standard Florida Statute Chapter 702. They are an interesting blend between statutory law and federal constitutional law, as the mortgages foreclosures are typically foreclosed in State Circuit Courts, which are creatures of State Constitutions. In Florida, virtually all mortgages must be in writing in order to be enforceable. Many litigators will testify that most, if not all, default litigated mortgages are not originally in writing, but are actually the result of a State Circuit Trial where the final judgment is the "writing" of the mortgage which has not been recorded.
The various documents in the mortgage servicing chain of title will ultimately become the backbone of any final judgment of foreclosure because they will be used to establish "standing" in the judicial foreclosure case. These documents typically include the "note" (which is the underlying debt), the "mortgage" (which is how the debt is secured by the real property itself), and PROOF that the mortgage was timely filed for record with the county register of deeds in order to enforce the rights given by the mortgage against the specific realty. There are specialized types of foreclosure proceedings available, including Commercial and Homeowners Association foreclosures.
Florida’s mortgage foreclosure proceedings are initiated by the filing of a "complaint," which is the document that informs the court and the parties to the proceeding of the reason why the court has jurisdiction to enter an Order of Sale of the property in question . The foreclosure complaint must delineate the Defendant’s failure to perform under the conditions set forth in the mortgage and the note, and that the Plaintiff is entitled to seek judicial foreclosure of the mortgage securing its debt.
If the Defendant can be found, the Court will serve the "complaint," and upon a finding of service, the Defendant will have a limited amount of time to file an "answer" with the Court, and if there are any defenses to the complaint, those defenses must be asserted in the answer or they will be waived.
Florida’s mortgage foreclosure laws provide several options for homeowners to dispute the allegations contained in the complaint, and to seek an alternative result to a foreclosure judgment on the mortgage in question. One of the most common options is to seek "mediation," whereby the parties agree to reserve all rights to argue their respective sides of the case, and then attend a mediation session with a neutral third party to try and reach a mutually beneficial agreement outside of the Courtroom.
These "mediations" are governed by various Federal Laws, including the Fair Debt Collection Practices Act and most mediations are referred to by the Clerk at the Court to "Foreclosure Mediators", who have completed specialized training to become certified mediators for the Court. The Clerk will assess a nominal fee (usually $300) to the parties at the start of the case to cover the cost of the mediation. The Clerks office will then assign the case to the mediators based on an available schedule, and then the parties will meet to try and settle the case through mediation.
Basics of Real Estate Contracts
Real estate contracts in Florida can often be complicated and confusing. But as a buyer or seller, you will need to sign certain real estate documents to complete the transaction. The following sections identify some of the most common aspects of Florida real estate contracts and their significance.
Purchasing Property
Most property purchases in Florida require a purchase and sale contract. The contract should include details such as the offer date, the close date, the amount of the purchase, and the legal description of the property. All parties to the transaction must sign the contract.
Buying a Home
A large number of residential real estate contracts in Florida are similar — with respect to some of the clauses. They include a lengthy description of the property, the purchase price, the closing date, the contingencies, and signatures. Even these contracts that are basically the same should be reviewed by an attorney.
Selling a Home
Selling a home in Florida also requires a purchase and sale contract. In addition to the basic clauses usually provided, it may include terms such as the obligations of the buyer and seller, the amount of the down payment, and the amount of the mortgage. No matter what, a legal review of the contract is essential.
Although real estate contracts vary, there are components that you will find in all such contracts. The elements can be divided into eight categories:
Because real estate contracts can be confusing and somewhat difficult to understand, it is recommended to have an attorney review all contracts before signing.
Standard Disputes Related to Real Property in Florida
Frequently, Florida real estate attorneys are called upon to resolve certain types of disputes. The most common include:
1. Real Estate Closings
The majority of real estate transactions go off without a hitch and keep all parties contented. However, some transactions yield property with latent defects not easily detected by the buyer. In these cases, a dispute may ensue where the seller reneges on their agreement to cover repair costs. Additionally, buyers may suspect fraud pertaining to purchase prices and other details. There also may be disagreements regarding provisions such as financing, title insurance and the closing date.
2. Non-Disclosure of Information
Florida real estate law requires sellers to inform buyers about defects and repairs in the home. As such, disputes often arise from the non-disclosure of information as a vendor attempts to profit from hidden problems. The buyer believes an item was included in the price of the transaction, while the seller maintains it was not dealt into the agreement. Subsequently, the buyer may sue the seller for misrepresentation.
3. Construction Defects
In some cases, mistakes are made by contractors resulting in a finished product that is different from what was agreed to . Disputes arise when compensation is sought for these errors. Or, there are issues because the work was not completed in its entirety.
4. Land Use Planning
State and local governing bodies can impose various regulations pertaining to land development. Conflicts often involve homeowner associations that plan for and develop different properties, commercial and residential. For instance, some developments have been built where wetlands existed. Other disputes are made against government agencies for permitting such developments.
5. Foreclosure Disputes
For years, the Florida foreclosure process was one of the longest and most complicated in the country. Those times have changed however; foreclosures are underway much faster and homeowners who are struggling to meet deadlines should take heed and seek the help of a real estate attorney. Please read our blog post on dealing with foreclosure.
6. Tax Disputes
Sometimes, governments levy property taxes based on inaccurate assessments of the property’s value. Disputes often arise between government agencies and property owners who wish to dispute valuation to reduce liability.