Condo governance form now available
Beginning Jan. 1, 2009, condo sellers (who are not developers) must provide prospective buyers a disclosure from the Florida Department of Business and Professional Regulation (DBPR) which details the rights and responsibilities of condominium boards and unit owners, voting rights, meeting notices and other governance matters. This disclosure, known as the Condominium Governance Form, is now available in PDF form from the DBPR Web site. Check back to this site on Dec. 30, 2008 for updated versions of the FAR Residential Sale and Purchase Contract: Comprehensive Addendum (FARA-10) and the Comprehensive Rider to the FAR/BAR Contract for Sale and Purchase (FBCR-10) which reference the 2009 disclosure requirement.

Short Sale Q&A
The increase in the number of short sales throughout the state prompted two legal questions from Mike Richardson, Association Executive of the Naples Area Board of Realtors. FAR’s General Counsel Randy Schwartz responds:

Q: If a real estate licensee lists a property at a below market price he knows the seller probably won’t accept, is the licensee in violation of Florida real estate license law? 

A: Randy Schwartz: While a violation of the Florida real estate license law is a matter to be determined by the Florida Real Estate Commission, in my opinion, if a licensee lists a property for a price the licensee and the seller know is not acceptable, a case of misrepresentation and false advertisement can be made under Chapter 475.25(1)(c) Florida Statutes. It would not make any difference if the listing indicated that the selling price was subject to a third party lender or not; it is more a matter of advertising something that is known to not be acceptable. 

Q: Is the seller in violation of any law if he states he would sell a property at a certain price even though he knew it would not actually sell at that price?

A: Randy Schwartz: I do not believe the seller would be violating any license law because Chapter 475, Florida Statutes, does not regulate the public. However, Chapter 817, Florida Statutes, might come into play for the licensee and a member of the public. Whether the seller could be held accountable for civil damages, due to his or her misrepresentation, would be completely determined by the individual facts of the case. 

Short sales and the Foreclosure Rescue Fraud Prevention Act
Does Florida's new Foreclosure Rescue Fraud Prevention Act (F.S. 501.1377) prohibit real estate licensees from being involved in short sales? According to Florida Attorney General Bill McCollum, in a letter to Trey Goldman, FAR Legislative Counsel, the answer is no, provided the only compensation sought by the licensees is the commission on the sale. The new law, which took effect Oct. 1, 2008, seeks to protect homeowners who face the threat of foreclosure from individuals who would prey on them.

McCollum's interpretation is based on the following scenario: A licensee secures a listing agreement on a home for sale, ascertains that the fair market value of the home is less than the loan amount, and lists the property at the lower amount. If a buyer agrees to pay less than the loan amount, the licensee then asks the lender to accept the lesser amount in order to avoid foreclosure.

"As long as there is no upfront or other fee for the negotiating service other than the normal real estate fee charged for the sale of the property, that activity [participating in a short sale] would not appear to fall under the provisions of F.S. 501.1377," according to McCollum.

Questions? Contact FAR's Legal Hotline at (407) 438.1409.

Florida issues ruling on doc stamp taxes for short sales
The Florida Department of Revenue (DOR) issued its ruling stating that doc stamp taxes owed on a deed should be based on the sale price paid by the purchaser. The DOR ruling is effective immediately.

• Download the Technical Assistance Advisory statement
  

Contracts 101 – A meeting of the minds

Make sure your purchase and sales agreements address this list of basics.

In its simplest definition, the purchase and sales agreement (contract) is a printed version of the meeting of the minds. Thus, the purchase and sales agreement represents the desires of all parties to the transaction and becomes the instructions for the closing agent. Items agreed to may include the following:

• The buyers’ names as they want them to be reflected on the deed.
• The specific legal description of the property that is the subject of the transaction (found on the sellers’ deed or the tax bill).
• Any personal property that may be included in the transaction; be as specific as possible.
• The use of the property: verify the zoning and be sure that the purchaser’s intended use is legal.
• Purchase price: what the buyers are offering, not necessarily the listed price.
• Terms of the purchase, including initial and subsequent deposits and terms of any financing.
• Acceptance date, after which the offer is void.
• Closing date, when title will be transferred to the buyers.
• Repair limitation clause, outlining inspections and limiting expense of any repairs.
• Special clauses adding whatever the parties want that has not otherwise been addressed.
• The signatures of the parties and the commission agreement. Be certain that all parties listed as buyers sign the offer and that all owners of record accept the offer in writing.

Source: “Effective Purchase and Sales Contracts,” a course by Steven J. David

FREC Final Order

This Florida Real Estate Commission Final Order allows a sales associate to be paid a commission directly if the sales associate’s broker provides the closing agent with written authorization identifying the specific transaction, the sales associate to be paid and the specific amount to be disbursed.  

• FREC Final Order (PDF)

You should use the latest version of Adobe Acrobat Reader to view PDF documents. It's free and available for download here. You may also call FAR's Technology Helpline at 407.587.1450. Remember to uninstall older versions before downloading the newest one.