The Old Switcheroo!

 

You have a Seller ready to list the residence for sale, you’ve confirmed that the Estate of the original owner who passed away has been opened, and a Personal Representative has been appointed by the Court. Your Buyer is an investor who works with a Limited Liability Company (LLC) who wants to buy the property to develop the land. So, the parties to the Sale and Purchase Agreement are pretty clear, the Personal Representative of the Estate is the Seller and the LLC is the Buyer.

But, what happens when the Person Representative dies or is replaced before closing, or the LLC wants to assign the contract to a different business entity? The parties who entered the contract may not always be the same ones you have at closing. Failure to make sure that Buyer and the Seller are still the actual parties to the Contract could result in a surprise lawsuit from an actual party asking for monetary damages or specific performance under claims of negligence, breach of contract, or even fraud. Here are some suggestions when confronted with circumstances like these.

Before closing, make sure that the Estate is still open, the Letters of Administration you were provided when the contract was entered into are still valid, and that there has not been a substitution of parties or a proceeding to remove the Personal Representative. Getting the proper documentation from the heirs or beneficiaries of the Estate can also be necessary for a title insurance company so you can close. What may seem like a simple procedural step on the surface can be a real morass when family members are fighting over an Estate and your Seller, eager to get the house sold and the money in the Estate account, fails to tell you all that is going on behind the scenes.

The same holds true with a corporate client. You must make sure that the business entity is still an active corporation or LLC, that there has not been any name change, or that there has not been a change in entity structure that would affect the original Buyer’s authority to close on the sale. And if the Buyer is assigning the contract to another business entity, don’t cut corners. Do the same due diligence you did when you first confirmed that the Buyer was legitimate and had the authority of the corporation or LLC to enter into the contract.

In addition, you must get a copy of the assignment to confirm that this “new” Buyer was properly assigned this contract. Of course, make sure you review the Contract itself to ensure that the parties agreed to allow assignments. That one simple provision may delay closing, or worse, blow up the entire sale.

Of course, these are just two examples of parties changing after entering a contract. Other examples are trustees of a trust, guardian of the property in a guardianship, a seller entity changes structure or ownership, and even a single individual could get married before closing which could create issue at closing if not brought to your attention as early as possible.

To do your best to reduce the likelihood of possible litigation because a new party has substituted in to the Contract, remember these two important things: 1. Be diligent every step of the way from the moment you list the property or bring a Buyer to the table to the recording of the deed and the disbursement of funds at closing; AND 2. If there is ever a question as to who the proper party to the contract is, consult with a qualified real estate attorney for some sound legal advice.

Sincerely,

Mark C Mann, Esq.
Berlin Patten Ebling, PLLC

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.

www.berlinpatten.com

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

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

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

TAMPA * New Location
324 S. Hyde Park Ave., Suite 325, Tampa, FL 33606
P (813) 467-7500 F (813) 251-1662

ST. PETERSBURG
3179 4th Street North, St. Petersburg, FL 33704
P (727) 822-2505 F (727) 822-2909

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

Speak to a real estate attorney!

, , , , , , , , , , , , ,

“Save Our Homes” And Portability

  On Election Day a couple weeks ago, Florida Amendment 5 was approved with strong support. This amendment extends the period during which property owners in Florida may transfer their accrued “Save Our Homes” benefit to a new homestead from two to three years. Beginning January 1, 2021, an owner of homestead property will now…

Jump On The Refi Train, But Don’t Leave Your Estate Plan at the Station

  The mortgage business is booming in many parts of the country with historically low interest rates. However, one often overlooked consideration is the impact that refinancing your home could have on your estate plan. Most of the effect of a refinance on an estate plan will depend on the following factors: 1. How the…

Almost to the Finish Line…

Closing day is almost here! The loan is approved, the final wire has been sent, and Buyers cannot contain their excitement! Both the AS-IS Contract and the Standard FAR/BAR Contract provide the Buyers with the opportunity to conduct a walk-through inspection on the day of Closing or the day before Closing, to confirm that 1)…

Don’t let your Coach turn into a Pumpkin!

Here we are on All-Hallow’s Eve, so I witch you a Happy Howl-o-ween. If you work in the real estate industry, you have come to accept, warts and all, the current practice requiring buyers to wire the balance due at or before Closing. The need for this requirement arises out of the “I need it…

Fill in the Blank

One of the most important parts of any real estate contract where your buyer is relying on financing to purchase the property is the financing contingency. Since most buyers will need to borrow money to purchase that dream home, a financing contingency protects those buyers by allowing them to back out of the contract and…

The Perfect Date

Although you may not have signed up for a dating website, the key to a perfect end to a real estate transaction involves selecting the perfect date! Whether you are putting an offer together for your buyer, or reviewing an offer with your seller, it is important to consider the practical implications of the selected…

The Eviction Moratorium Impact On Your Next Residential Contract

  As a new investor, Stephen is purchasing his first investment property. He reviews the contract and notes Provision 6(b) is checked, indicating the property is currently occupied by tenants. Great! He thinks I can collect instant rental income. Stephen does not realize, however, that the Federal eviction moratorium is still in effect, and his…

My Cousin “Minny”

Your Cousin Minny dies in Florida leaving you Florida real property. Now you are tasked with how do you get clear title to the real estate to sell the property? A full blown probate or ancillary probate is costly and time consuming, but it may be the only way to clear title. However, you should…

Hurry, We Need to Sign…

When discussing a potential purchase with a client, you may hear, “It does not make a difference to us what type of contract we sign, we love the house and just want to make sure that we don’t lose it”. Stop! There are two standard forms, the FAR/BAR “AS IS” Contract and the FAR/BAR Standard…

Home Inspection Reports: A Life Isn’t Fair Teaching Moment

Mel and Dani are your typical first-time homebuyers. They have scrapped and saved for years to accumulate their earnest money escrow deposit and mortgage down payment. To keep down costs, Dani convinced Mel a home inspection was not necessary because the lender was performing a 4 point inspection. As a result, their contractual due diligence…

No Pets Allowed!

Stop me if you’ve heard this one before: After months of searching for the perfect Florida condo for your picky buyers, you have finally found the perfect unit that checks all of your buyer’s boxes. There is just one problem: NO PETS ALLOWED! As anyone who has ever had a beloved pet knows, pets are…

This Is Not A Bill

  Believe it or not, September is here and the football season is upon us!…. well maybe…hopefully? I am more excited than ever for the toe to touch the leather, as it will mean that things are that much closer to getting back to normal, or the new normal. However, all that glitters is not…

Prepare Your Buyer/Borrower for the Closing

  With the volume of closings that we have, we handle a lot of different personalities, situations, and behaviors when we go through our closing process. Being aware of these in advance, and perhaps trying to get ahead of the issues, can sometimes make the difference between a happy closing and a dramatic one. 1.…

My soon to-be-ex Needs to Sign What?

  Your friend of a friend from Michigan, Mr. Buyer, tells you he is newly retired, single, and ready to start the next chapter of his life in the Sunshine State, so he reaches out to you as his real estate agent to begin the property hunt. Two weeks later, he has found his dream…

Congratulations On Your Loan Approval… Now What?

Paragraph 8 FINANCING in both the “AS IS” and the “Standard” FR/BAR Contract* is the section of the Contract dealing with financing of a purchase by a Buyer. The purpose of seeking financing is to obtain approval for a loan, thereby permitting the Buyer to close on the Contract. This is defined under the Contract…

Survey Says…

    So what exactly is a survey? A survey is a drawing made by a surveyor which outlines the boundaries and features of your property, including the house and other improvements. It shows things like where the house sits in relation to the property line, where your driveway starts and ends, if your fence is actually on…

Permitted To Close

Open permits, expired permits and code enforcement violations can wreak havoc on a closing when not properly addressed. Picture this scenario… contract negotiations were a breeze, the inspection results were perfect, title came back clean, and closing is looking oh so smooth. Then, out of seemingly nowhere, the municipal lien and permit search results reveal…

Making a Listing, and Checking it Twice

So you just finalized a listing agreement for an exciting property that you can’t wait to advertise to the world for your customer. Like any good listing, you really want this one to stand out among the other similar listings in the area. After spending time at the property and with the owners it is…

Runaway Buyers: Seller’s Options When Left Alone at the Closing Table

What happens when a buyer leaves a seller at the closing table and it is not related to unforeseeable circumstances? In Florida, the FAR/BAR contracts are the mainstream residential transactional sale agreements and they generally provide the parties with a reasonable expectation of their rights and remedies upon a buyer or seller default. When Johnny…

1 Step Forward, 2 Steps Back…

Florida law allows a residential property owner the ability to pull a permit and serve as an Owner-Contractor so long as the residence is for occupancy of such owner and NOT offered for sale or lease (Note: the owner is also required to sign a disclosure statement confirming the same at the time the permit…

Time (Of The Essence) Is On My Side, Yes It Is…

Contracts are full of language that may seem unimportant, boilerplate, confusing, or just plain useless. Real estate contracts are no different. The standard FAR/Bar forms for sale and purchase of residential property, “AS IS” contracts, and even vacant land contracts all contain provisions that you see all the time, but rarely have to really address.…

When In Doubt, Write It Out…

We have been asked recently whether an agent’s email containing a counteroffer is binding. That’s an interesting question in itself, but it also opens up broader questions: what are the legal implications of acting as someone’s agent, and are there any “best practices” that can help keep an agent out of trouble? Generally, an agent…

When Estates Become Part Of Your Closing

We routinely get the frantic call from a realtor or closing party to address a title issue or incident involving a deceased buyer or seller, or even a prior party further back in the chain of title. Those inquiries come with the urgent questions: Can you fix it? Can it be done before closing? How…

Lending a Hand on Loan Approval

During these uncertain times, providing buyers with the confidence and security to move forward with a transaction is paramount. A well-drafted offer can lead to a smooth closing process while protecting the buyer’s interest in the event of unforeseen issues. Section 8 of the Residential Contract for Sale and Purchase (the “Standard Contract”) and the…

E-Sign Me Up

  Where would we be without technology? The current pandemic has demonstrated how integral technology is to thrive in the real estate business. Such a vast array of tasks can be done electronically: sending wires, signing closing documents, remote online notarization, virtual open houses, signing contracts, etc. When a buyer and/or seller signs a real…

All That Glitters Is Not Gold

The COVID-19 pandemic (a/k/a the “coronavirus”), has hit very close to home when it comes to homeowners being able to make their mortgage payments on time (or at all). Where many Floridians are being furloughed or laid off from their employment, there is increasing anxiety over how that 1st of the month mortgage payment is…

Commercial Leases & the COVID-19 Pandemic

Many of you have asked us about acquaintances, friends, or family members who cannot pay rent due to COVID-19. Some have been forced to shut down, others who remain in business simply cannot pay their bills. What is a tenant supposed to do? Consider the following: Some tenants may want to just stop paying rent.…

Da do Ron Ron Ron, Da do Ron Ron

By now you have probably heard of Remote Online Notarizations, commonly referred to as “RON.” RON is being hailed as a tool that will revolutionize the closing process, and some day it will. But for now, the process of conducting closings using RON is going through some growing pains as we all race to understand…

COVID-19 Closing Conundrum…

The impact of the coronavirus (COVID-19) on business relationships is still a huge unknown, and we are all aware of how much uncertainty it has injected into our daily lives. Fortunately, the good people at the Florida Bar and the Florida Association of Realtors had the foresight to consider an event like this when drafting…

Your COVID-19 Closing Related Questions, answered by Berlin Patten Ebling

We know you are all tired of receiving COVID-19 related bulletins, but due to the flood of questions we have received on the topic, we felt that this would be a useful and timely topic. This Q&A will answer some of the most common questions we have received over the last few days. We will…

Coronavirus (COVID-19): Is your closing at risk?

The team at Berlin Patten Ebling, PLLC is extremely sensitive to the impacts of the coronavirus (COVID-19). The effects of COVID-19 have prevented or delayed performance across virtually all sectors. Fortunately, we have yet to see very little impact to the local real estate industry and we are still seeing robust market activity, great attendance…

Lien Back…

  Did you know that Florida law allows municipalities to put a lien against property without actually recording the lien until they feel like it? And if these liens are not recorded at the time a buyer purchases the property, they will not show up in a standard title search. That means a buyer may…

Homestead Exemption Revocation: Welcome to Florida, Now Pay the Tax Man!

  Knock, knock, BOOM…this is the sound you hear when opening a notice of tax lien from your local property appraiser. The property appraiser’s letter states that you have 30 days to pay taxes, penalties, and interest, or there will be a tax lien filed on your home. There must be some mistake…how did this…

I Love You…Now Sign This!

  It’s that time of year again. Love is in the air, and spouses all over the state of Florida are scrambling to come up with the perfect way to show their significant other that they love and appreciate them. For far too long, spouses have stuck to the same unimaginative and uninspiring routine of…
selby lights in bloom

Stealing Home

So the contract is signed, the earnest money deposit is in escrow, the lender has approved the loan, the survey is clean, the home inspection reveals no issue, and the closing date is set. What could possibly go wrong? You show up to closing only to find out that the Seller never owned the property! This scenario has…

Relocation to Florida: Looking to your Future, Leaving your Past

We all know about the snowbird, the retiree, the investor, the tourist who asks the question: how do I relocate to Florida, how do I become a resident? Beyond the weather and lifestyle, there are obvious reasons why people want to make that move, including the lack of Florida income and estate taxes, exemptions for property…

Do You Have 2020 Vision for Your Closing?

On behalf of the entire BPE family, we want to wish everyone a Happy New Year. Its times like this where it can be helpful to reflect on the prior year, and since this year is 2020 (presumably the year of “perfect vision”), let’s take a step back and reflect on those instances where the…
sarasota ski a rees

Caregivers, You’re Not Planning Just For Yourself

As a caregiver, you spend much of your time, money, and energy taking care of the needs of others. Those who have taken on the role of caregivers for ill or disabled spouses, aging parents, children, or other loved ones with special needs are typically selfless and giving individuals who may not stop to consider…

Don’t Get Burned By Solar Panels (Or Other Leased Items)

More and more homes are running off the power of the sun these days. Renewable energy has become a trending topic and solar panels are beginning to become prevalent in the state of Florida due to positive environmental impacts and the potential to reduce large A/C bills. Selling a house with solar panels comes with…

What Impact Does the Citizenship of My Spouse Have On My Estate?

According to the Pew Research Center, in 2017, there were 44.4 million foreign-born people living in the United States, 55% of whom were non-citizens. As a result, there are many occasions when a non-citizen may be the beneficiary of the estate of a U.S. citizen, for example, if the non-citizen immigrant married a U.S. citizen.…

Be Thankful You Don’t Receive a Fowl Title Objection Notice

It seems almost obvious, only a plucked turkey would buy property without having a title search conducted to determine if a Thanksgiving feast is in the making, that is to say “title is clear”, or if there are title defects that would render the property unmarketable. This right is provided under the terms and provisions…

Florida’s Will Be Done: When a Decedent Dies Without a Will in Florida

When a person dies with a valid last will and testament (“Will”) their Will is authenticated by a court through a process called probate, and the decedent’s assets are transferred in accordance with their Will and Florida law. But what happens when a person dies without a valid Will? The answer is Florida’s “Will Be Done” – that is, the laws of the state of Florida…

Movers and Breakers

Moving day can be an exciting time for many!  However, the thought of moving always causes angst, frustration, and physical/emotional exhaustion.  To avoid most of these emotional and physical moving issues, Sellers and Buyers should research said issues and then eventually hire vetted and reputable moving companies. Moving companies come in all sizes (i.e., National to local) and shapes (i.e., service and costs). …

Survey What, Survey Who?:

A buyer of real property normally is required to procure a survey due to a lender’s requirements. This is not so when a buyer is purchasing real property using cash or private financing. We often see the preceding buyers attempt to reduce their costs by forgoing the cost of a new survey and rely on…

I just noticed something…

Real estate sellers and buyers are often required to provide contractual notices to their counterparties relative to all kinds of different issues.  For instance: cancelling a contract requires timely notice, objecting to title issues requires notice, and financing issues require notice, to name just a few. How does one party provide notice to another?  The…

Estate Planning, What’s That?

The third week of October is National Estate Planning Awareness Week, a week to highlight one of the most overlooked areas of personal finance management – estate planning. Truth is, everyone has an estate; however, it is estimated that over 50% of Americans do not have an updated estate plan or a plan the reflects their…

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…

Modern Uses For Life Insurance Trusts

Since the enactment of the Tax Cut and Jobs Act of 2017, the utility of the irrevocable life insurance trust (ILIT) has been in question. The substantial increase in the federal estate tax exemption–$11.4 million for an individual and $22.8 million for a married couple in 2019-greatly reduced the need for estate planning aimed at…

Can I Get A Pre-Nup (Or A Post-Nup)?!?

  With respect to real property transactions, understanding contracts is a daily challenge.  Whether it is a listing agreement, an “As Is” agreement, or even a warranty deed, contracts are at the heart of what real estate agents deal with (outside of the actual clients.)  On occasion, non-real estate contracts will creep into a transaction…

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…

Show Me The Money!

Disbursement instructions to closing agents come in all shapes and sizes, but they all have one thing in common. Each involves a specific direction to the closing agent to disburse the funds entrusted to the closing agent precisely as instructed. The most common form of disbursement instructions involve the settlement statement itself (which is executed…

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…

“Trim Notices & Property Taxes-What to Expect”

At the end of August every year, while most of us are gearing up for football season, County property appraisers across the state are sending out TRIM notices. The TRIM (Truth in Millage) notice or Notice of Proposed Property Taxes is the document that provides a home owner with the updated assessed value (the taxable…

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…

“RLT-Easy As 1,2,3…” Revocable Living Trust: Top 3 Benefits to Having One in Your Estate Plan

A revocable living trust (RLT), is a document that is created by an individual, called a grantor (or settlor), during the grantor’s lifetime, that instructs a trustee on how to manage the grantor’s assets during the grantor’s lifetime and how to manage or distribute the assets upon the grantor’s incapacity and death. Diverse assets such…

“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…

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…
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…
Niche Trusts

Niche Trusts: As Unique As You Are

You’re not a carbon copy of your neighbor. Likewise, your estate plan shouldn’t be a carbon copy of theirs. Your estate planning team’s approach to counseling should be tailored to your specific needs. As your team works together to produce, tailor, or edit your estate plan, one key tool to consider is a niche trust.…

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…

Unleashing the Power of the ‘Lady Bird’ Deed: Enhanced Life Estate Deeds, One of Florida’s Best Tools for Estate Planning

The state of Florida is well known for its beautiful sunny skies, impressive real estate, and favorable estate planning laws; however, there is one estate planning tool that Florida offers that is extremely powerful, saves thousands of dollars by avoiding probate, and is surprisingly underutilized by many property owners, and that is the enhanced life…

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…

LOOK BOTH WAYS BEFORE YOU WALK AWAY FROM A DEAL

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…

DON’T BE CAUGHT WITH YOUR PANTS DOWN

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…

Helpful Closing Tips for Commercial Real Estate Sellers

Here are some tips to ensure that your commercial real estate closing is a smooth one. Commercial real estate closings are often much more complicated than your regular residential closing, there are usually multiple business entities, often with layers, leased property where there is a tenant or tenants in the property, elaborate surveys, environmental due…
Overlap between Real Estate and Estate Planning

Overlap between Real Estate and Estate Planning (other than the word “Estate”)

Anyone involved in real estate needs to be aware of estate planning issues that will likely apply to their real estate ownership and transactions. As you can see from the following list, there is a lot of crossover between estate planning and real estate, along with tax issues, and asset protection, among others. We have…
Giving Thanks and Leaving a Legacy Through Your Estate Plan

Giving Thanks and Leaving a Legacy Through Your Estate Plan

Many people use their estate plan to pass along wealth to their loved ones, to pass along their values, and to give thanks. There are several ways to give thanks by using your estate plan. One way to do this is by designating charitable giving or specific gifts that will help ensure your legacy. It…
death creates uncertainty

The Uncertainty of Death

When we receive title search results from our title underwriter for property that is owned by someone who is deceased, we are always somewhat surprised to see the requirements imposed for the clearing of title before a contract can close. Simply, “death creates uncertainty” which needs to be resolved before closing. There are over 15…

What Happens During My Real Estate Transaction?

Indispensable Components to a Real Estate Transaction The Contract is signed; the earnest money paid; and the title agent selected. What do we do now?  Well of course we start the due diligence, which begins with procuring a title search of the property. Seems like simple stuff, right?  Not so fast, however. The purpose of…
Do We Have a Deal

Do We Have a Deal?

Question:  When is a contract not a contract, even if supposedly “everyone” has signed? Answer: When the wrong people sign. With all the different ways one can own property these days, a common issue that often is overlooked is identifying the proper parties to sign a contract.  To be bound by a contract, the signing…
Ensure You Know Who Holds the Keys

Before You List, Ensure You Know Who Holds the Keys

A recent situation we encountered underscores the importance of having a general understanding of the documents/information your closing agent will need to successfully and timely complete your transaction. In that instance, a gentleman claimed to be the owner of certain property. Upon further inquiry, it turned out that the gentleman was really the son of…

How Does One Define the “Procuring Cause”?

In light of a flurry of recent inquiries about commissions, we decided to take a look at the current state of the law as it pertains to how one defines the term “procuring cause.” We started with the National Association of Realtor’s definition, which defines the procuring cause as follows: “is … the interplay of…

New! Access Your Files on Berlin Patten Live!

BERLIN PATTEN LIVE: NEW ONLINE COMMUNICATIONS SYSTEM After more than a year of planning, development, and implementation, Berlin Patten is proud to announce the launch of our new electronic communications system, Berlin Patten Live.  Berlin Patten Live is intended to virtually eliminate any communication barriers and ensure that parties to transactions handled by Berlin Patten…

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…

Major Differences Between the As Is Contract and the Regular FAR/BAR Form

The As Is Contract and Regular Florida Realtors/Florida Bar Contract forms are essentially the same with the following exceptions: 1. Heading. Of course, the inclusion of “As Is” in the heading sometimes draws concern and can create minor angst for Sellers since they don’t want Buyers to get the impression that the Property is substandard.…

Addressing Exchange Rates for Foreign Buyers/Sellers

ADDRESSING EXCHANGE RATES FOR FOREIGN BUYERS/SELLERS When the opportunity arises to represent an international clientele, a factor that is not always considered in the transaction is the cost of exchanging their native currency to USD, or vice versa. When money is sent from one country to another, the funds have to be converted to the…

House Bill 87 And The Impact Of Florida Mortgage Foreclosures

As you may have read, House Bill 87 (H.B. 87) was recently passed by the Florida legislature and proposes to make significant changes with respect to the Florida Statutes regarding mortgage foreclosure actions.  As of now, H.B. 87 will become new law unless Governor Rick Scott decides to exercise his veto power, which seems unlikely…

Marketable Vs. Insurable Title

In response to our blog last week, most of the feedback we received involved questions pertaining to the quality of title that one might get if they acquire REO Property. The answer to this question is not simple. In a non-REO setting, the requirement is generally for the seller to deliver marketable title (i.e. title…

Should I use An Attorney Rather Than A Title Company For Closing?

In Florida, both, attorneys and title companies, may issue title insurance.  In contrast, in some states, like Delaware, only attorneys may issue title insurance.  The title insurance rates are promulgated by the Department of Insurance so title insurance obtained through an attorney is priced the same as from a title company.  In addition, closing costs…

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…

The AS-IS Contract And Disclosure

When a transaction is an AS-IS sale, the seller often insists that the property is in “AS-IS” condition in an attempt to reduce repair limits/credits and possibly shift the responsibility for determining the true condition of the property to the buyer.  It is well known that the buyer is typically given a specified period of…

Should I Order A New Survey Or Rely On A Prior Survey?

Our clients often ask this question when they are purchasing residential property. You can only rely on the prior survey if the Seller has an existing survey accurately depicting the property and the Seller can sign an affidavit at closing that there have been no changes to the property since the date of the survey.…

What About The Flat Screen TV?

There is no question that home-technology has improved tremendously in recent years. As a result of this improvement, we have received a steady increase in questions and disputes regarding whether an item should be considered a fixture or personal property with respect to residential sales. For example, flat screen TVs and built in speaker units…

Substituting Contract Pages

We have noticed an increase in a practice, that if not done with full and proper disclosure, could lead to substantial trouble for the parties involved, including civil liability, license forfeiture, or worse yet, criminal sanctions.  The practice involves changing and/or substituting pages to a fully executed contract.   While we recognize the reality that…

Preventing Post Closing Issues

Many clients, their agents, and unfortunately some closing/title agents believe that the end of a real estate transaction occurs when it closes and funds.  Too many times we have seen post-closing glitches, oversight, or lack of follow-up lead to problems with the future sale of a property.  Over the last few weeks we have run…

Counting Time Periods When Using The FR/BAR Contract Form

Under the FR/BAR Contract calendar days are used when calculating time periods versus the CRSP-12 Contract form, in which business days are used. Consequently, it is much easier to count time periods using the FR/BAR since you don’t have to worry about excluding national legal holidays when counting your time periods.  You don’t count the…

Dealing With Entities As Buyers In Investment Properties

As most of you are aware, more and more investors are coming to this area to invest in distressed properties. The result is an increasing number of short sale contracts in which the buyers are entities (such as LLCs) rather than individuals. Typically, short sale lenders require the seller to provide a slew of documentation,…

How to Effectively Use an Attorney From a Realtor’s Perspective

We have found with our experience that most real estate professionals are not aware of how they can most effectively utilize an attorney throughout a real estate transaction to not only protect themselves, but to better serve their clients. Many real estate professionals (and/or even their clients) are under the assumption that they will receive…

Addressing Financing Contingencies

Under the Financing Contingency paragraph of the FloridaRealtors/FloridaBar-1 Contract and As-Is Contract (hereinafter collectively referred to as “Contract”), when can the Buyer or Seller terminate the Contract and is the deposit returned to Buyer? Prior to Loan Commitment Date, Buyer notifies Seller in writing that Buyer can’t obtain financing after using diligence and good faith,…

Berlin Patten Raises Funds for the American Cancer Society

Originally Published: 9/14/2012 Berlin Patten would like to thank our donors, sponsors, and guests for supporting our charity bartending event for the American Cancer Society on September 10, 2012.  Together, we almost doubled our fundraising contributions from last year!  We would like to give special thanks to Shane Rawley, owner of Shaner’s Pizzeria.  He and…

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.…

IMPORTANCE OF OBTAINING NEW SURVEYS AND HAVING THEM REVIEWED IN ACCORDANCE WITH THE FLORIDA REALTORS/FLORIDA BAR 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…

And the Survey Says?

Originally Published: 5/12/2012 Survey review is a prevalent part of our practice whether we do so for purposes of property due diligence, removing or confirming title issues, etc. More often than not Buyers are unclear as to the necessary requirement that a survey must include to be used for purposes of removing title exceptions and…

Foreclosure Update

As most are painfully aware, Florida foreclosures suffered tremendously last year after the discovery of apparent rampant fraud by both lenders and foreclosure attorneys in prosecuting foreclosure actions. Many existing foreclosure lawsuits came to a sudden halt, and new filings dropped significantly. As a result of this, along with the poor foreclosure practices of many…

Response to Anonymous Blog Entry: Title Agents should still not be conducting short sale negotiations

On or about September 30, 2011, an anonymous reader provided a response to a blog Berlin Patten had sent to its readers regarding who can or should be engaged in the negotiation of short sales. While we debated whether or not to further comment on the subject (as the blog response did not really specifically…

Short Sale “Pre-Approvals”

We are frequently asked about listings being marketed as “pre-approved” in the MLS. We suspect this designation is intended to imply or suggest that there can be a quick closing.  We feel that the use of the term “pre-approved” can be misleading and lead to unrealistic or false expectations. Other than a pre-approval under HAFA,…

Short Sale Negotiations

We have been asked by several real estate agents to investigate whether or not a title company or title agent can conduct short sale negotiations. One of Berlin Patten’s contacts at the Florida Department of Financial Services, Bureau of Investigation, Title Services, responded to our inquiry as follows: “The license for a title insurance agent does not…

Fraud Investigation – A Top Priority for Freddie Mac

In previous blogs, we have discussed our concerns about short sale fraud and the warning signals to watch for.  According to Freddie Mac’s Mortgage Fraud Officer, Short sale fraud has also become the top priority for Freddie Mac’s fraud investigation unit as well. Per the attached article, recent trends that Freddie has been alerting Real…

Assignable Contracts & Specific Buyers

Please be advised that short sale lenders are getting very strict about approving the specific buyer identified on the contract. As such, lenders are carefully scrutinizing assignment provisions in contracts. Short sale lenders who are reviewing contracts (that permit the contract to be assigned) are kicking back the contracts more and more frequently.) Lenders are…

Berlin Patten’s Short Sale and Bankruptcy Services

Real Estate professionals are frequently confronted with listing a short sale property encumbered by two or more mortgages and a seller who is strongly considering bankruptcy as its “exit strategy.” We have struggled with that same scenario… working on a short sale for months, and then the seller decides to file for bankruptcy. At that…

HAFA Policy Changes for Servicers

Lenders’ inconsistent eligibility requirements seem to be the most consistent thing we have seen with respect to the Federal Government’s HAFA (Home Affordable Foreclosure Alternatives) Program.  The Federal Government seems to have taken notice. On August 9, 2011, the Home Affordable Foreclosure Alternatives Program adopted certain policy guideline changes.  The changes, we presume, are in…

The Importance of a Municipal Lien Search

Performing a municipal lien search is crucial when purchasing property in this day and age. In many cases there are unknown or undisclosed fees, costs or other issues that will impact a buyer post-closing. In addition a municipal lien search generally will assist a seller in complying with contractual terms to avoid a default. Examples…

Short Sales – Working with Second Lenders

Anyone who works with short sales knows that it can be very difficult to get short sales approved when there is a second (or even third lender). To successfully complete a short sale, ALL lenders (among others) must agree. The problem is that in many instances, they do not. In fact, we have seen situations…

A New Buyer Can Be Substituted for One Who Walked

We have learned of a very interesting development with respect to Bank of America. Bank of America has advised that it will permit a new buyer to step into the shoes of a buyer who has walked away from a transaction.  Furthermore, Bank of America has advised that the process will not have to begin…

Deficiencies and Deficiency Judgements

We spend a great deal of time counseling prospective short sale sellers regarding the advantages of attempting to pursue a short sale rather than allowing their property to go through the foreclosure process. Many people do not realize that the foreclosure process is a two step process. The first step is the sale of the…

Bank of America Realtor/Broker Listing Agent Certification – Questions and Answers

The new Bank of America Realtor/Broker Listing Agent Certification (the “Certification”) has fostered some significant concern among real estate agents. The most common questions and our comments/responses are as follows: 1. Question: Does paragraph 1 of the Certification mean that Bank of America will not pay a commission. Answer: No! Bank of America never paid…

Bank of America Document Warning

Please be advised that Bank of America is now requiring the parties to a short sale transaction to execute certain form documents before they will consider your short sale for approval. The buyer and seller will be required to execute a new addendum, and somewhat interestingly, the agents involved in the transaction will also need…

Nonlawyer Assisting the Short Sale Seller: Ministerial Acts or UPL?

As you know, short sale negotiations (and negotiators) are coming under great scrutiny by local and federal authorities. There are significant new disclosures for non-attorneys, and now the Florida Bar is weighing in on the subject. In essence, various proposals under consideration by the Florida Bar suggest that a great deal of the short sale…

FTC Issues New Rules for MARS

The Federal Trade Commission (FTC) has issued new rules that might impact real estate practitioners who represent clients involved in short sale transactions. The Mortgage Assistance Relief Services (“MARS”) regulations define anyone providing services which assist or attempt to assist the consumer in negotiating a short sale as a “MARS” provider. Depending on certain factors,…
Menu