Navigating Real Estate Transactions: Key Legal Considerations
Posted on: March 26, 2025
Contract Specificity Standard vs. Custom Contracts
- The state of Florida typically employs the FAR/BAR “As Is” Residential Contract; however, for commercial or specific deals, it is usually better to have custom agreements.
- Clear Terms:
It is important that the main terms (purchase price, contingencies, closing date, escrow, inspection rights) are defined.
Title and Ownership Issues
- Title Search & Insurance:
It is important to identify liens, encumbrances or title defects. Title insurance protects against future claims.
- Survey & Boundary Disputes:
They are particularly important for commercial or undeveloped land – once to verify legal descriptions and once to determine encroachments.
Due Diligence
- Inspections:
As standard, structural, termite, environmental, and roof inspections should be performed.
- Zoning and Land Use:
It is necessary to confirm use intended is permitted in local zoning laws, whether for development or for commercial use.
- HOA/Condo Docs:
If relevant, review governing documents, assessments and financials.
Disclosure Requirements
Florida law requires sellers to disclose known material defects that are not readily observable. Buyers should also proactively ask for relevant information in writing.
Financing & Contingencies
It should be clear whether the transaction is all cash or financed. The financing contingency clauses, deadlines and buyer obligations to secure the loans must be outlined.
Escrow & Closing Process
Florida usually employs title companies or attorneys to facilitate the closing of the transaction (as opposed to some other states). It is crucial to make sure that all closing documents, including the Closing Disclosure (CD) or ALTA and Deed are reviewed for accuracy.
Foreign Investment & FIRPTA
If the seller is a foreign person, the Foreign Investment in Real Property Tax Act (FIRPTA) may put a tax withholding on the sale.
1031 Exchanges
For investment properties, a 1031 exchange can defer capital gains taxes if it is properly set up.
Environmental Concerns
For commercial or industrial properties, a Phase I Environmental Site Assessment (ESA) should be conducted to determine if there is potential contamination or regulatory issues.
Legal Representation
Real estate attorneys assist with term negotiation, risk identification, compliance, and dispute resolution. They are especially important in commercial deals, land development, and for high-risk assets. Serle & Chapkin PLLC represents buyers and sellers in real estate transactions. Contact us today to learn how we can help you buy or sell a property in Florida.
