Get Real about Property! Travels through Real Estate Law by Tom Brodersen, Esq.
Most real estate contract forms in common use in Florida use special clauses known as “contingency clauses” to protect one party or the other from certain risks.
Chief among these risks (at least for prospective buyers) is the risk of losing their deposit if they don’t go all the way to closing. There are justifications for refusing to close under certain, limited circumstances.
But, understand first, there are NO “get out of jail free” cards!
That being said, the mortgage contingency and property inspection clauses are written into most contracts to buy and sell real estate. BUT, there are special steps to take to make sure you are protected under each.
Most mortgage clauses basically provide that you can be excused from closing if you can’t get a mortgage, but there is a time limit for taking advantage of the clause, there are very specific requirements for what buyers must do to make sure they are protected, and there are mechanical or procedural steps that must be taken to stay “in the safe zone.” You really need to read the clause very closely. It may be 2 or 3 paragraphs long, with a lot of fine print!
Property inspection clauses give the buyer time to have their people closely examine a property, to make sure they won’t have expensive problems in the future. There are a few things to keep in mind, though. The time for inspections is limited (usually 15 days or so). During that time, you can pretty much get out of the deal for any reason, if you describe it in terms of some condition of the property.
But those clauses put the buyer in something of a “box.” If you want out of the deal, you must cancel, in writing, and prior to the expiration of the deadline. If you are looking to negotiate a change to the terms based on that issue, you have to start the process early, so you can fully resolve it before that deadline occurs, or you will end up without a way out other than to cancel.
My favorite law professor used to say that, when he said some question was “procedural,” that was code for EXTRAORDINARILY IMPORTANT! This is no different. It doesn’t matter what rights you may have, if you don’t observe the procedure (and deadlines) for enforcing them, you might as well not have those rights.
Unless you are unusually practiced in working on these contract issues, you should talk to a real estate lawyer about protecting yourself in those situations.
ANDERSON & BRODERSEN, P.A., 350 Corey Avenue, St. Pete Beach, FL 33706 (727) 363-6100 www.PropertyLawGroup.com