Many of the standard ways for selling real property in Florida changed effective November 1, 2021. The Florida Realtors organization recently summarized some of these changes. What’s important to understand is that if you are buying or selling real estate in Indian River County or anywhere in Florida, you need to speak with an experienced Florida real estate lawyer. There are new agreements of sale forms that must be used. There are new laws that regulate selling property as-is and that regulate other real estate transactions.
The new Florida real estate laws apply to the Florida Realtors/Florida Bar Contract for Sale and Purchase (FR/Bar) – both the AS-IS and the Residential agreements. In addition to the core contract, the new laws:
• Update seven riders
• Create three new riders.
Changes to real estate law, according to Juana Watkins, the VP of law and policy and general counsel for Florida Realtors, occur every few years due to new laws, technology, and changes in society. Watkins states that, “A great deal of time and energy went into these updates. The Realtor and attorney members of the Joint Statewide Realtor Attorney Committee dedicated hours and hours of their time, and they deserve our gratitude.” Many of the updates are due to suggestions from members of the Florida Realtors organization.
The major Florida Realtors/BAR updates (FR/BAR)
The November 1, 2021, requirements alter the responsibilities for both sellers and buyers.
Paragraph 8 of the standard real estate contract concerns how the real estate purchase is paid for.
8(b). The new law keeps the requirement that the buyer must obtain approval for financing in accordance with this paragraph. The new law adds the following requirement:
• The “buyer’s lender must receive a satisfactory appraisal before the “Loan Approval Period” expires – the first time an FR/Bar contract specified this.” Appraisals include appraisals and alternate valuations. The change was enacted to “expedite receipt of the appraisal if required by the buyer’s lender.” Prior to November 1, 2012 – a low appraisal could terminate the transaction even up to the closing date – depending on the date the appraisal was complete. With the new law, “a low appraisal can still derail a transaction, if it is received before expiration of the Loan Approval Period.” The new law helps to move the appraisal date forward. If the appraisal is low, then the real property “can be returned to the market sooner” so another buyer with a stronger financial record can be found.
• In short, the new real estate contract expands the “Loan Approval” period to include financing approval for the buyer and the receipt by the lender of a satisfactory appraisal – if an appraisal is required before the Loan Approval period ends. Buyers don’t need to let the seller know their loans have been approved until the Loan Approval period ends.
8(b)(i). The new legislation creates a new definition of “Loan Approval.” Loan Approval now has two criteria:
• That a buyer is approved for the financing described in the contract
• That the lender received a satisfactory appraisal if one is required.
This means that “if a buyer is approved for financing but the approval is conditioned upon an appraisal to be completed in the future, this will not be considered “Loan Approval.”
The new legislation also means that “an approval that contains a condition that the buyer must sell another property is considered ‘Loan Approval,’ providing Rider V is made part of the contract.” The change was made to ensure that if “The seller agrees to a buyer’s offer that includes Rider V, the seller is now aware that the buyer’s offer is contingent on the buyer selling another property.”
18, Standard O. The new law changes the delivery notice methods. The old law included mail or personal delivery as effective delivery methods. The new law now approves deliveries by email or fax. There is a key condition. “Certain electronic media delivery previously provided for in the contract was deleted.” The new law now means that text messages cannot be used to meet the notice requirement because “texts can disappear over time, making them unreliable as evidence to prove that a notice was delivered.”
What are some of the other key real estate AS-IS and Rider changes – due to the November 1, 2021, real estate law?
Florida Realtors also provides a few other change explanations. Again, the best course of action is to call Lulich Consultants & Attorneys to understand your duties and rights regarding real estate contracts. Some of the new changes include:• The term “Personal Property” now includes several terms such as thermostats, television wall mounts, and doorbells, that were added. The term “intercoms’ was deleted.
• The “closing” paragraph now includes the requirement that “all funds required for closing are received by the closing agent and collected pursuant to STANDARD S.”
• “An extension of the closing date based on CFPB (Consumer Finance Protection Bureau) delivery requirements was reduced from up to 10 days to 7 days – subject to certain conditions.”
• The definition of “occupancy” was expanded.
• If the seller makes a request in writing, the buyer must keep the seller informed about the loan application status, “appraisal, loan approval and property-related conditions.”
• “The buyer can now wait until the end of the ‘Loan Approval Period’ to inform the seller, in writing, that the loan was approved. In the current version, the buyer had to ‘promptly advise’ the seller.”
• Other new items apply to the costs the seller pays, special assessments, watercraft links, counteroffer language, and time calculations. For example, the new real estate contract clarifies whether time limits apply if the key period ends on a weekend day, a national legal holiday, or on “a day a national legal public holiday is observed.”
• The definition of Force Majeure has been expanded and now also includes “governmental actions and mandates, government shutdowns, epidemics or pandemics.”
• There are new riders for:
o Mold Inspection
o Seasonal/Vacation Rentals
o Pace Disclosure.
Learn how the new real estate laws affect As-Is and other Florida real estate transactions
Learn how the new real estate laws affect As-Is and other Florida real estate transactions
At Lulich & Attorneys, our Vero Beach and Sebastian real estate lawyers are experienced at, helping buyers and sellers prepare and negotiate real estate agreements, take steps to protect their real estate investment or sales proceeds, obtain title insurance, and have a successful real estate closing. Lulich Attorneys & Consultants provides practical guidance in all areas of real estate. Whether facilitating a real estate closing or representing a client in a contract dispute, our real estate attorneys are ready to serve you. Call us at 772-580-5500 or use our contact form to schedule an appointment.