Legal Basics of Buying and Selling a Home in Florida

A residential sale in Florida involves a written contract, several required disclosures, a title search, and a closing handled by a title company or attorney. None of it is mysterious, but each piece has rules that affect your money and your timeline. Whether you’re buying or selling in Lake County, here’s an overview of the legal framework so you know what you’re signing and why.

Your relationship with your real estate licensee

Before you share confidential information with an agent, it helps to know what kind of relationship you have. Under Fla. Stat. 475.278, a Florida licensee may work with you as a transaction broker or as a single agent, or have no brokerage relationship with you. Florida licensees may not act as dual agents.

• Transaction broker. Florida presumes all licensees are transaction brokers unless a single agent or no brokerage relationship is established in writing. A transaction broker provides limited representation. Duties include dealing honestly and fairly, accounting for all funds, using skill, care and diligence, disclosing known facts that materially affect value of residential property and aren’t readily observable to the buyer, presenting all offers, and limited confidentiality.
• Single agent. A single agent owes fiduciary duties, including loyalty, confidentiality, obedience and full disclosure.

The statute spells out what can and can’t be shared under limited confidentiality, such as whether a seller will take less than the list price. Ask your licensee which relationship you have and read the disclosure form.

The purchase contract

Most residential sales in Florida use standard contract forms published by Florida Realtors and The Florida Bar. The contract is where nearly everything that matters gets decided:

• Price, deposit amounts and deadlines for each deposit
• Financing terms and the deadline for loan approval
• The inspection period and what happens if the buyer isn’t satisfied
• Who pays for title insurance, the survey, and other closing costs
• How property taxes and HOA dues are prorated
• The closing date and what happens if a deadline is missed

Deadlines in these contracts are strict. A buyer who misses the end of the inspection period, for example, may lose the right to cancel for inspection reasons. Put every deadline on your calendar the day the contract is signed. If you have questions about your rights under a contract, a Florida real estate attorney can review it.

Required disclosures

Florida sellers have a disclosure duty from the Florida Supreme Court case Johnson v. Davis, 480 So. 2d 625 (Fla. 1985): disclose known facts that materially affect the value of the property and aren’t readily observable or known to the buyer. Several statutes add specific written disclosures:

• Flood disclosure under Fla. Stat. 689.302, given at or before contract signing.
• Property tax disclosure under Fla. Stat. 689.261.
• Radon notice under Fla. Stat. 404.056.
• HOA disclosure summary under Fla. Stat. 720.401, if there’s a mandatory homeowners’ association.
• Lead-based paint disclosure for homes built before 1978, under federal law (see the EPA’s page).

Florida also says, in Fla. Stat. 689.25, that a death on the property, or an occupant’s HIV/AIDS status, isn’t a material fact that must be disclosed. Our seller disclosure guide covers all of this in more detail.

Title and title insurance

Before closing, a title company or attorney searches the public records for the property’s ownership history, mortgages, liens and judgments, and issues a title commitment. The commitment lists what has to be resolved before closing and what exceptions the policy won’t cover.

The buyer’s lender will require a lender’s title policy. An owner’s policy protects the buyer. The contract states who pays for the owner’s policy and who chooses the title agent. If there’s a problem with the title, see our guide to selling with a cloudy title.

Survey and boundaries

A survey shows the property lines, improvements, easements and any encroachments. Lenders and title insurers may rely on it. On rural land, acreage, lakefront and older lots, a current survey is especially worth having, because fences and driveways don’t always line up with the legal description.

Closing

At closing, the seller signs the deed, the buyer signs loan documents if financing, funds are disbursed and the deed is recorded with the Clerk of Court. Florida collects documentary stamp tax on deeds under Fla. Stat. 201.02, and on notes and mortgages under Fla. Stat. 201.08, as well as nonrecurring intangible tax on mortgages under Fla. Stat. 199.133. The contract decides who pays which.

Wire fraud is a real risk around closing. Always confirm wiring instructions by calling the title company at a number you already know, never one from an email.

Property taxes and homestead

After a sale, the property is reassessed as of the next January 1, under Fla. Stat. 193.155. Buyers who make the home their permanent residence can apply for the homestead exemption under Fla. Stat. 196.031 with the Lake County Property Appraiser; the application is due by March 1 under Fla. Stat. 196.011. Sellers moving to a new Florida homestead may be able to carry over part of their Save Our Homes benefit (“portability”). Ask the property appraiser’s office how it applies to you.

Questions to ask before you sign

• What brokerage relationship do I have with my licensee?
• What are all the deadlines in this contract?
• Which disclosures have I received or given?
• Who is the title agent, and who pays for the owner’s title policy?
• Do I need a new survey?
• How will my property taxes change after the sale?

We’re happy to explain the process

RLW Realty has been helping buyers and sellers in North Lake County since 2014. We can explain how each step works and help you know when it’s time to bring in an attorney. Call or stop by our office at 55 N. Central Avenue in Umatilla.

This guide is general information, not legal or tax advice.