
The new year is already bringing notable changes to Florida’s real estate contracts! Effective December 31, 2024, Florida Realtors and The Florida Bar introduced updates to the “AS IS” Residential Contract for Sale and Purchase and the standard Residential Contract for Sale and Purchase. These updates apply to both contracts and focus on three critical sections:
Section 9: Closing Costs, Fees, and Charges
Section 15(a): Buyer Default
Section 19: Addenda
Here’s a closer look at what these updates mean and how they’ll affect your transactions:
Section 9: Closing Costs, Fees, and Charges – Who Pays for What?
This section has been revised to clarify that buyers and sellers are now responsible for covering their respective “Closing Services” costs.
What Are Closing Services? These services include tasks performed by licensed title insurers, agents, or attorneys, such as:
Preparing documents needed to close the transaction.
Conducting the closing process.
Disbursing funds for real estate transactions involving a title insurance commitment or policy.
Before the Change: Traditionally, the party choosing the Closing Agent often paid for all closing services, which sometimes led to unexpected expenses.
Now: Each party will cover their own Closing Services costs. This update promotes greater transparency and ensures each side has more control over their expenses.
Section 15(a): Buyer Default – What’s Different?
Previously, if a buyer defaulted, the contract allowed part of the deposit to be split between the Listing Broker and the Cooperating Broker. This language has been removed.
What Does This Mean for Realtors?
The distribution of deposit funds in a default scenario will now rely on specific compensation agreements rather than being dictated by the contract.
Realtors should carefully review these agreements to understand how compensation will be handled in the event of a default.
Pro Tip: Whether you represent the buyer or seller, ensure you understand the terms of your compensation agreement. Clarifying these details upfront will help you avoid surprises if a deal falls through.
Section 19: Addenda – New Clauses for Buyer Broker Compensation
This section introduces two new addenda:
Addendum FF: Credit Related to Buyer Broker Compensation
Addendum GG: Seller’s Agreement with Respect to Buyer Broker Compensation
These additions allow parties to structure offers with clear terms for how Buyer Broker Compensation will be handled, particularly if the buyer doesn’t cover the full amount.
Key Takeaway: When using these addenda, be diligent about checking the appropriate boxes to ensure they are properly incorporated into the contract.
Staying Prepared for 2025 Contract Changes
While these updates may seem small, they are critical for streamlining transactions and protecting all parties involved. Realtors, buyers, and sellers should familiarize themselves with these changes to navigate the market confidently.
Have questions about these updates or need legal guidance? Reach out to your trusted real estate attorney today to ensure you’re fully prepared for the evolving landscape of Florida real estate.
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