READY LEGAL

Title Issues: Home Buyer’s Rights in Florida

Purchasing a home is a significant milestone, but the process comes with its share of complexities, especially when it comes to the property’s title. In Florida, the buyer’s rights in the event of unforeseen title issues are usually determined by the terms of the written contract. Let’s delve into this topic, focusing on the standard Florida Bar Florida Association of Realtors (“FARBAR”) contract that governs most residential real estate transactions in Florida.

Title Insurance Commitments and Exceptions to Coverage:

In residential purchases, the buyer is usually provided with a “Title Commitment” from its title insurer a few weeks prior to closing. The commitment may list certain “exceptions” to coverage based on issues the insurer discovered during its search (ex: code violations).

The FARBAR contract outlines the buyer’s rights relating to title issues discovered in the title commitment, giving the buyer a window of 5 days after receiving the Title Commitment to review it.

Notice and Opportunity to Fix the Issues:

The contract specifies that the buyer, upon finding defects that render the title unmarketable, must notify the seller in writing within the stipulated 5-day period. If the seller receives the notice, they have a 30-day Cure Period to take reasonable diligent efforts to rectify the defects. If the defects are cured within this period, the parties proceed with the closing.

However, if the buyer fails to request the defects be cured during the 5-day period, they may waive their right to have the issues resolved, and may be forced to purchase the property with the title issues still existing.

Hypothetical Example – Code Violations on a First Time Purchase:

Consider Sarah, a first-time homebuyer excited about her new Florida property. During the title examination, the report reveals code violations that need attention. Sarah, following the FARBAR contract, should notify the seller in writing within the 5-day window to retain her right to have the title issues fixed.

However, if Sarah fails to request the cure during this period, she might be held to her commitment to close. In such a scenario, negotiations become more challenging, and Sarah may have limited options to address the code violations before closing.

Summary:

Understanding buyer’s rights in the event of title issues is vital for anyone navigating the Florida real estate market. The FARBAR contract provides a structured framework, giving buyers the flexibility to address unforeseen challenges and make informed decisions. It is crucial for buyers to be proactive during the 5-day examination period to identify and request the cure for any title issues. Failure to do so might result in a commitment to close, even in the presence of defects.

DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.

Joint Ventures in Florida: A Guide for Out-of-State Contractors

Embarking on a construction project in a new state is an exciting venture that presents both challenges and opportunities. For an out-of-state contractor eyeing a promising project in Florida, forming a joint venture with a local contractor can be one way to do so within the state’s licensing requirements.

However, before diving into this collaboration, it’s crucial to understand and navigate the regulatory landscape. Florida Administrative Code Rule 61G4-15.0022 provides the framework for joint ventures in the construction industry.

1. Joint Venture Participation:

One of the initial considerations for an out-of-state contractor is the participation in a joint venture with local businesses. The Florida rules do not bar qualified Florida business organizations from teaming up with unlicensed out-of-state contractors. However, there are caveats — it’s vital to note that only a properly qualified business organization is permitted to engage in contracting activities as defined by the Florida statutes.

2. Joint Venture Bidding Process:

Navigating the bidding process is a crucial aspect of winning a construction project in Florida. According to Rule 61G4-15.0022, an unlicensed joint venture can submit a bid under specific circumstances. To do so, the joint venture must adhere to a set of conditions, such as having a written joint venture agreement, ensuring that at least one venturer is a qualified business entity under a licensed contractor, and obtaining signed statements of authority from all participants. These statements must grant the licensed contractor full authority to conduct the contracting business on behalf of the participants. It is also imperative to submit copies of the joint venture agreement and statements of authority to the Construction Industry Licensing Board before the bid deadline.

3. Licensing Requirements for Joint Ventures:

One critical aspect outlined in Rule 61G4-15.0022 is that if the joint venture is awarded the contract, it must be properly qualified with a license within 90 days. This means that the joint venture, once successful in the bidding process, must follow the standard licensing application procedures just like any other business entity. Complying with this requirement is essential for ensuring that the joint venture operates within the legal framework of the state and is eligible to carry out the contracted construction activities.

This requirement means that qualifying for a construction project as joint venture in Florida may only be an attractive option for significant projects, or if there is potential for additional joint projects in the future.

Closing:

Embarking on a construction project in a new state is a significant undertaking, and for out-of-state contractors eyeing opportunities in Florida, forming a joint venture can be one option for doing so. By understanding and adhering to Florida Administrative Code Rule 61G4-15.0022, contractors can navigate the regulatory landscape with confidence. Through a well-structured joint venture, the hypothetical out-of-state contractor aiming to contribute to Florida’s green energy initiative can bring together diverse expertise, ensuring success and compliance with the state’s regulatory framework.

Deposit Restrictions for Florida Contractors

Like many states, Florida places limitations on the money received for deposits on construction projects in order to protect homeowners against unethical contractors. These limitations are codified in Section 489.236 of the Florida Statutes.

Importantly, a contractor who receives more than 10% of the contract price on deposit must:

Apply for permits necessary to do work within 30 days after the date payment is made (except where permitting is not required); and
Start the work within 90 days after the date all necessary permits for work, if any, are issued.

These requirements may be waived when there is “just cause” for failing to do so, or where the customer agreed to a longer period in writing.

If a contractor fails to comply with the requirements, the customer must make a written demand to the contractor to meet the requirements or to refund the payment. The demand must be made by certified mail. If the contractor fails to comply with the demand, it may be inferred that the contractor does not have “just cause” for failing to comply with the statute.

A contractor’s failure to comply with these deposit restrictions can result in both criminal and civil penalties, up to and including a first degree felony, depending on the circumstances and amount of money involved.

Who Has Construction Lien Rights in Florida?

Under Florida Statute 713.01, only certain types of individuals have the right to claim a construction lien for work or services on a construction project. Individuals outside of those classes have no right to claim a lien.

The following classes of persons may have the right to claim a lien:

Contractors

“Contractor” means a person (other than a materialman or laborer) who enters into a contract with the owner of property for improving it.
The term includes an architect, landscape architect, or engineer who improves real property pursuant to a design-build contract authorized by section 489.103(16).
The term also includes licensed general contractor or building contractor who provides construction management services, which include scheduling and coordinating preconstruction and construction phases for the construction project, or who provides program management services, which include schedule control, cost control, and coordinating the provision or procurement of planning, design, and construction for the construction project.

Subcontractors

“Subcontractor” means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of such contractor’s contract, including the removal of solid waste.
The term includes a temporary help firm as defined in Section 443.101.

Sub-subcontractors

“Sub-subcontractor” means a person other than a materialman or laborer who enters into a contract with a subcontractor for the performance of any part of such subcontractor’s contract, including the removal of solid waste from the real property.
The term includes a temporary help firm as defined in s. 443.101.

Laborers

“Laborer” means any person other than an architect, landscape architect, engineer, surveyor and mapper, and the like who, under properly authorized contract, personally performs on the site of the improvement labor or services for improving real property and does not furnish materials or labor service of others.

Materialmen (contracted with the owner, a contractor, a subcontractor, or a sub-sub)

“Materialman” means any person who furnishes materials under contract to the owner, contractor, subcontractor, or sub-subcontractor on the site of the improvement or for direct delivery to the site of the improvement or, for specially fabricated materials, off the site of the improvement for the particular improvement, and who performs no labor in the installation thereof.

Professional Lienors (under section 713.03)

Any person who performs services as architect, landscape architect, interior designer, engineer, or surveyor and mapper, subject to compliance with and the limitations imposed by this part, has a lien on the real property improved for any money that is owing to him or her for his or her services used in connection with improving the real property or for his or her services in supervising any portion of the work of improving the real property, rendered in accordance with his or her contract and with the direct contract.

Avoiding Injury Claims as a Florida Landlord

Owning and managing rental properties in Florida comes with its own set of challenges, and one significant concern for landlords is the potential for legal claims arising from injuries that occur on their properties. This is particularly challenging in the Sunshine State, which is known for its billboard lawyers and slip and fall commercials. In this article, we discuss a few ways landlords can mitigate risks from personal injury claims.

Hold the Property in a Corporate Entity, such as an LLC

One effective way for Florida landlords to protect themselves is by holding their rental property within a corporate entity, such as a Limited Liability Company (LLC). Establishing an LLC can provide legal separation between the landlord’s personal assets and the rental property. This separation is essential for safeguarding personal wealth in the event of a legal claim.

To maximize the protection offered by an LLC, landlords must adhere to corporate formalities. This includes maintaining accurate and up-to-date corporate records, maintaining separate bank accounts, and ensuring the LLC is adequately capitalized. Failure to do so may expose the landlord to the risk of “piercing the corporate veil,” by which, claimants may seek to hold the landlord personally responsible for injuries.

Maintain Adequate Insurance Coverage

Landlords should invest in comprehensive insurance coverage for their rental properties, including a policy that covers claims for bodily injury. Adequate insurance is a critical component to reducing risks and providing financial protection in the event of a personal injury lawsuit. General liability policies will usually provide some form of protection for bodily injuries.

Depending on their needs, landlords may also consider other forms of insurance, such as umbrella insurance, which offers additional coverage. This can be particularly beneficial in high-liability situations, such as a firework display gone wrong, or balcony collapse, where multiple persons are injured.

Perform and Document Timely Repairs for Dangerous Conditions

Active property maintenance is another important way that landlords can reduce legal risk. Speedy repairs and regular inspections can help prevent accidents and injuries before they result in a claim. By promptly addressing maintenance issues, landlords demonstrate that they have prioritized safety at the property.

Documentation is equally important. Landlords should keep detailed records of property inspections, repairs, and communications with tenants regarding maintenance concerns. In the event of a claim, this documentation can serve as valuable evidence, helping to establish that the landlord did not behave negligently.

Closing

Florida landlords must be proactive in implementing legal strategies to protect themselves from claims for injuries on their rental properties. Holding the property in a corporate entity, maintaining adequate insurance coverage, and prioritizing timely repairs and documentation are key components of a comprehensive risk management plan. By taking these steps, landlords can navigate the challenges of property ownership with greater confidence and security.