New Construction, Review Before You Execute


New construction agreements can be extremely complicated and it is important that the buyer have a thorough understanding of the contract and terms prior to executing.  The construction agreements provided by developers are typically one sided and do very little to protect the buyer/owner in the event that an issue should arise.  It is important to note that every construction agreement is different and there is no standard new construction agreement out there.  The buyer should have a thorough understanding of what it is that the buyer is signing and the terms that they will be bound to.  Below are some of more common issues we discover when reviewing new construction agreements:

  1. Construction Timeframes. Does the contract provide for a definitive commencement date and completion schedule, and are there penalties if the builder misses those marks?
  2. Plans and Specifications. Are the plans and specifications of the new improvement adequately described in the Contract, and does the buyer have any recourse if the developer fails to construct the improvement in accordance with the plans and specs?
  3. Change Orders. Is the scope of the project very clear, and what is the written process (and price) for requested changes?
  4. Financing Contingency. Is the contract contingent on financing and is it a true financing contingency?
  5. Deposits. Does the contract require a substantial amount of upfront money be paid to the builder?
  6. Draw Schedule. Does the contract provide for a sufficient number of draws so that the money paid to the contractor is proportional to the work performed to date?
  7. Inspections. Does the contract permit inspections as a condition to each draw, and, more importantly, as a condition to final payment?
  8. Punch List. Does the contract address the manner in which punch list items are to be completed and by when? Does the contract require final payment prior to the completion of punch list items?
  9. Lien Waivers. Does the contract require lien waivers as a condition to each draw, and more importantly, as a condition to final payment?
  10. Holdbacks/Final Payment. Does the contract provide for an adequate holdback from each draw, as well as a reasonably sufficient final payment, to better insure that there will be sufficient funds to complete the project if the builder fails to perform?
  11. Closing Date. Does the contract provide for adequate notice to the Buyer prior to setting the Closing Date?

Often times the above issues are not adequately addressed in a manner that best protects the buyer’s interests, and there is very little any lawyer can do after the fact. Negotiating construction contracts can be extremely complex, and should not be done without consulting with an attorney.

Our firm represents buyers/owners as they enter into a new construction agreement by:

  • Reviewing contracts and related documentation on behalf of Buyer/Owner prior to contract execution
  • Thoroughly explaining contract terms, expectations and timelines
  • Drafting legal documents and addenda to contract to protect Buyer/Owner interest
  • Closing construction loans and reviewing loan documents
  • Ensuring lien releases are completed prior to payment
  • Attorney representation throughout the closing process with the builder’s Closing Agent and/or act as both Attorney representation and Closing Agent
  • Ordering and addressing any issues on the vacant lot survey and/or final survey
  • Ensuring Buyer/Owner receives marketable title

 Because of the substantial risks involved with hiring a company to build a home, we strongly encourage any person considering new construction to fully research the contractor and to obtain legal representation to review and negotiate the contracts.  If there are any questions as to the financial viability of the contractor, a title search can reveal all pending liens, foreclosures, lawsuits, judgments and many other public records which tend to indicate financial hardship.  Further, even if the landowner is obtaining financing (in which the lender will require very specific agreements from the builder for the construction process), we still strongly encourage having an attorney review all documents prior to commencement of construction.



Berlin Patten Ebling, PLLC

Article Authored by William C. McComb, Esq.,

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239 P (941) 954-9991 F (941) 954-9992

247 Tamiami Trail South, Suite 201, Venice, FL 34285 P (941) 955-9991 F (941) 484-9992

8433 Enterprise Circle, Suite 100, Lakewood Ranch, FL 34202 P (941) 907-9022 F (941) 907-9024

442 West Kennedy Boulevard, Suite 312, Tampa, FL 33606 P (813) 467-7500 F (813) 251-1662

Did you find this real estate law content useful, but need actual legal council?

Speak to a real estate attorney!

, , , , , , , ,

Standard Or “As Is?” That Is The Question

While Florida law requires no particular form of contract for a real estate transaction, the FR/BAR Contract forms are the most utilized and well-recognized residential contract forms in Florida.  The FR/BAR Contracts, created and approved by a collaboration between the Florida Association of Realtors and the Florida Bar, include two Contract forms: the Residential Contract…

Property Sharing: Yours, Mine and Ours

Many times property ends up having some form of shared ownership. Sometimes it is simply in the form of joint tenants or tenants in common, but sometimes more complex forms are involved such as life estates, ownership through entities or even by agreement (such as a co-habitation agreement). Over the years, statutes and common law…

It’s Not Over Until It’s Really Over…Selling Real Estate After A Divorce

As you all know, real estate professionals constantly wear an abundance of different “hats.” Working in the real estate world demands that real estate professionals have at least a minimal understanding of a variety of topics including, but not limited to, family law, wills, trusts and estates. Even with divorce rates slightly declining, it is…

When Is It Critical To Review Your Estate Plan, and Why?

Just like other important life tasks, your estate plan deserves your time and attention. It’s important that you work with us to review your estate plan at least once a year. Think of this as your estate plan’s annual physical exam, and remember-prevention is the best cure. An annual exam isn’t necessarily the only time…

Color Of Authority To Sign Listing Agreements & Contracts

A contract (which, for purposes of this Blog shall focus on Listing Agreements and Residential Contracts For Sale and Purchase), is only as good as the authority of the Seller and/or Buyer to sign them. Many times, I receive calls from agents asking who has authority to sign the Listing Agreement, and then the Contract…

Insurance Considerations as Hurricane Dorian Approaches

As Florida braces for the possible threat of Hurricane Dorian, we encourage you to take all necessary precautions to ready your loved ones and homes for potential impact. If you are purchasing property, or representing a buyer of a property, that is set to close in the near future, we urge you to contact your…

No Leaks, No Damages, No Problems!

  Congratulations!  Your client entered into a new Standard FARBAR Contract on the purchase of a single family home in Sarasota.  The only contingencies are inspections and marketable title. Your client immediately hires a professional home inspector to conduct their home inspection.  During the Inspection Period the home inspector provides a “clean” report only notating…

The Repair Escrow Agreement: Having Your Cake and Eating It Too

In Florida, more likely than not a buyer will identify his or her requests for repairs early in a real property transaction and prior to closing pursuant to the standard FAR/BAR contractual provisions with little fanfare. Nonetheless, as in life and in realty, there are unforeseen circumstances where a closing extension would be difficult and…

I See Dead People (On Title)!

There are endless reasons for property owners to make the decision to sell their property. Unfortunately, one of the most common motivating factors is the passing away of an owner of the property. On top of everything that goes along with the death of a loved one, the last thing a Seller needs or wants…

“Options? We All Got ‘Em, We All Want ‘Em, What Do We Do With Them?”

We see option contracts for real estate purchases frequently, and we run into problems with those contracts just as frequently. In this blog we’ll go over what option contracts are, what they require to be effective, and we’ll identify some common pitfalls. An option contract is a promise by the owner of property to sell…
Real Estate Firm

Your Condo Purchase-Treat It As An Investment

Condominium purchases by their nature involve property rights that are more complicated than typical single family lots or properties.  We have written several blog articles relating to investigations that buyers and their realtors should undertake prior to their purchase (links are included at the end of this blog). It is said that ownership of real…

Check Out My Title While BPE Resolves It!

One of the most frequent questions we receive from realtors involves the status of title to the property. The answer to the question “how is title” can be a source of great anxiety or a source of great relief. As a result, most people involved in any real estate transaction want the answer to that…

Not Quite Sure When A Contingency Ends? Read This!

We are fortunate to have holidays and weekends to provide us with time for relaxation, fun times with friends and family, and time away from work to recharge. Legal holidays and weekends follow a different rule for contract contingency deadlines. Throughout this week and into the weekend, while most of us will be celebrating the…

Balancing a Closing with Summer Vacation

During the summer when everyone is jet-setting on vacation, and year round as part time residents move in and out of Florida, we experience an increasing amount of closings where one or both parties cannot be physically present on the day of closing.  As this is a common occurrence, there are many ways to accomplish…

Breaking News! “RON” Remote Online Notarization is coming to Florida

  The much-anticipated remote online notarization (“RON”), is set to arrive in Florida as of January 1, 2020. Florida will join the ranks of twenty-three other states that have either passed or have pending bills that allow online notaries to perform notarizations anywhere in the world (Alabama, Florida, Idaho, Illinois, Indiana, Kentucky, Michigan, Minnesota, Mississippi,…

Hurricane Season: The Good, The Bad and Still Closing

Often, parties seeking to buy and sell real property only concern themselves with Florida’s Selling Season and do not take into consideration the other season – Hurricane Season.  Florida’s Hurricane Season is kicking off and now that Hurricane Irma is approximately two-years in the rearview mirror, Berlin Patten Ebling would like to remind our buyers…

Look Before You Leap…Into A New Listing!

Real estate transactions can often be quite complicated and confusing for even the most savvy of Sellers and their agents. You would think that the most basic and straightforward step in the process would be determining who are the owners and who has the authority to convey the property and sign related paperwork, such as…


While it may not happen often, on occasion we have experienced situations where one of the parties “walks” from the transaction.  In this instance, the buyer or seller is often left in a difficult position and wondering what remedies they may have against the breaching party, if any.  A well drafted contract will typically set-forth…

Foreign Buyers & Sellers-Speaking Their Language

In Florida we are fortunate to have many foreign buyers and sellers of real estate. Sometimes they show up on a realtor’s threshold and are ready to purchase a property to use as an investment, or a vacation home, or a reason to remove their money from their home country, or to house their children…

“Up a Stream without a Paddle-Closing without Title Insurance”

The immense value of title insurance has been well documented. Generally speaking, title insurance provides three somewhat distinct, yet significant coverage’s: Fatal title defects that could cause one to lose their property altogether, such as fraud, forgeries, inheritance issues, or execution/signing issues; Defects that could require the expenditure of significant amounts of money to cure…

Six Things You Need to Know about Buying Rental Properties (#2 will surprise you)

When a Buyer is purchasing a residential rental property such as a multi-unit building, they often have many questions about their rights as the new building owner and landlord.  The Buyer may also wonder whether the standard FR/BAR real estate contract is the appropriate contract for them and what protections it affords them.  Below is…

Getting Up Close and Personal (Property)

When real estate agents are out and about showing homes, those homes are usually staged, lived in, and/or full of furniture, appliances, etc. So when agents get the property under contract, what exactly is conveyed with it? The “As Is” and Standard Florida Realtors/Florida Bar contracts are useful tools and have been drafted by attorneys…


Have you ever represented a Buyer that literally waits to the last second to inform you, via email, that they want to terminate a contract?  As a Realtor, what are your obligations?  Generally speaking your obligation (as Selling Agent) is to deliver the written notice of termination (or signed Release and Termination) to the Listing…

The Importance of the Buyer Walk-through

The excitement of closing is near.  Your Buyer flies into town a day before closing with the moving van not too far behind.  They are so happy they request to conduct their walk-through the day they arrive.  Upon arriving at the home they discover that the Seller has not finished packing.  The Buyer immediately begins…

Flood Insurance Reform Act of 2012

In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (“Act”) which requires FEMA, as well as other agencies, to change the way the National Flood Insurance Programs (“NFIP”) is run. The Act was designed to reduce the NFIP’s growing debt. Key provisions of the legislation require the NFIP to raise rates to…

Don’t Forget the Open Permit Search!

For financial reasons most parties do not perform an Open Permit search (which would include expired permits) until after the inspection period has expired.  This is a common mistake that generally leads to the buyers inability to object to an open permit issue at a later date.  The new FARBAR-2 Residential Contract for Purchase and…

Tips on Inspection Periods for Short Sale Transactions

As most of you have likely seen, the demand in today’s market for short sale properties is very high, with decreasing inventory and a large pool of buyers.  In fact, property prices are increasing in many areas because of this high demand, and short sale sellers are often receiving many offers – some possibly even…

Issues to Consider Before Signing a Construction Contract

With the recent issues involving high profile builder/contractor financial challenges, and with the proliferation of buyers who are considering new home construction, we have received a number of inquiries lately about adequately negotiating construction contracts to best protect anyone who wants to build a new home. While there is no substitute for engaging a qualified…

CRSP-12 and CRSP-12 Addendums Debut

Originally Published: 8/10/2012 Effective August 20, 2012, the FAR-9 Contract will be replaced with the Contract for Residential Sale and Purchase (CRSP-12). In addition, the Comprehensive Addendum (FARA-10) will be replaced with the CRSP-12 addenda. Please see the attached link to the summary list of the changes between the FAR-9 Contract and the CRSP-12 Contract.…


Originally Published: 6/8/2012 The following are excerpts of a more comprehensive article previously published by Julie A. Horstkamp, Esquire, Berlin Patten, PLLC, Member of Sarasota Association of Realtors/Sarasota County Bar Association Joint Committee, and Chair of the Florida Realtors/Florida Bar Joint Committee. We receive a number of questions regarding the survey provision under the Florida…