The South Florida real estate market continues to experience record breaking sales, with rates of single family homes climbing more than 40% compared to last year. With low inventory and high demand among buyers, flocking in from all parts of the country, sellers are finding themselves in a bidding war. However, anxious to sell quickly, they may experience delays when faced with code enforcement liens, judgments, or other encumbrances against their title that impedes a quick sale.
Rather than stopping or cancelling the sale, many sellers are not aware that there exists a clause in the “As Is” Residential Contract for Sale and Purchase that permits sellers to invoke an “automatic” extension of time in order to clear or “cure” title issues such as these. This language in the contract requires notifying the buyer side in order for the contract closing date to be extended. It is important for sellers to know however, that not all liens or judgments have to be paid in full, sometimes even paid at all! Florida permits judgments to attach to title and be forced to be paid at the time of sale only if they meet certain requirements, including being certified by the court, containing certain language and be recorded. If the statutory rules are not followed, the title company performing the closing can ignore the judgment. Similar rules apply for liens which can be ignored.
Liens Can Be Negotiated and Removed
Even if recorded correctly and collectible, liens and judgments can be negotiated. Even code enforcement liens. Often million dollar liens can be mitigated to pennies on the dollar when we are able to show compliance to the City and efforts by the homeowner to correct the problem complained of. Not all code enforcement and violations have to be cured either and can be negotiated with the buyer for the buyer to assume such matters. This often saves the seller thousands of dollars at the time of sale. The most important step in the sale or purchase of any real estate in Florida is to hire a knowledgeable and experienced real estate attorney. By having significant experience in both mitigating fines, liens and judgments, and being a full service title company, we make sure to protect our clients, whether seller or buyer, ensuring that all these issues, and anything else that comes up at closing, is addressed and our clients’ interests are protected. After closing, it may prove impossible to correct.
