Buying and selling real estate in Florida is a detailed process. With multiple parties and documents involved, there is a high potential for issues to arise. Working with a real estate attorney can help avoid these common closing nightmares.
1. Encumbrances
Property ownership and use aren’t always clear-cut. There could be liens on the title. These are claims of owed payments by the property owner to a creditor. Failure to pay puts the property at risk of foreclosure. Another common encumbrance is an easement. This grants someone other than the property owner the use of the property. The buyer may be required to honor this easement agreement. Finally, there could be restrictive covenants. These are restrictions on property use, typically from an HOA or municipality. A real estate attorney can help eliminate or accept these encumbrances before the closing.
2. Probate
There are two situations where a probate issue could arise. The first is that the owner of the property is already deceased. The second is where the owner dies during the sale process but before the closing.
Once the property is a part of the estate, it can get caught up in the legal confusion of probate. One heir could be willing to sell, while another may refuse. Without the approval of all potential heirs, it creates a cloud over the title that can create title problems in the future. A real estate attorney can help navigate the sale process during probate if you buy a property with an already deceased owner.
To prevent potential problems, a real estate attorney can write a contingency term into your sale contract. For example, the contract could state that the sale obligation passes to the heirs should the owner pass away prior to closing.
3. Title Issues
A title search is a standard part of a real estate sale in Florida. During this search, the title’s history gets researched to ensure the current claimed owner is the valid owner and has the right to sell the property. A real estate attorney can provide these title research services. In addition, if a title issue is uncovered, your attorney can represent your best interests in correcting the issue. Doing your due diligence before the closing can help prevent an unpleasant title ownership claim from arising later.
4. Closing Disclosure Problems
A Closing Disclosure is a five-page form that includes the final details of the mortgage loan obtained by the buyer. The lender must provide this form at least three days before closing. As the borrower, it is crucial to review this document. If there are errors, it could become impossible to know what your financial liabilities are. A real estate attorney can help you review this document for accuracy and help explain what your total financial liability is.
5. Document Inconsistencies
This may seem like a silly problem to have. However, documents are prepared by humans, who make mistakes. Entering the wrong information or having spelling errors can create problems during closing. A real estate attorney can assist with document review to ensure everything is completed correctly.
6. Natural Disaster
The Atlantic hurricane season runs from June 1 to November 30. The 2023 hurricane prediction is that we will see 12 to 17 hurricanes, with 1 to 4 being major hurricanes. This presents a real risk that a natural disaster could hit a home before closing completes. Typically, property sale contracts include a natural disaster property damage clause. It generally is down to the buyer to decide whether they want to proceed with the sale. This may not be one of the more common closing nightmares. However, when it happens, it can quickly become a complicated nightmare. A real estate attorney can advise on contractual liability and legal rights.
Speak With a Real Estate Attorney
If you plan to buy or sell real estate in Florida, consider speaking with a real estate attorney. This legal professional can help you avoid or address these closing nightmares. An experienced real estate attorney will have represented clients in similar situations. So, while every case is different, they have the experience and knowledge to effectively represent clients during a closing.
Request a consultation with one of our real estate attorneys to speak about your planned closing.
