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7 Common Closing Issues with Florida Real Estate Deals

7 Common Closing Issues with Florida Real Estate Deals

Navigating the world of real estate transactions in Florida can be a thrilling yet challenging experience. Buyers and sellers alike often find themselves facing obstacles that, if not addressed promptly, can delay or even derail a closing. The real estate closing process involves numerous steps and potential legal pitfalls, from title issues to unresolved debts, that can prevent a smooth transfer of ownership. In this blog post, we will delve into seven common closing issues that arise during a real estate closing in Boca Raton and offer advice on how to overcome them.

Key Real Estate Closing Issues and Solutions

Key Real Estate Closing Issues and Solutions

Closing IssueResolution
Unresolved Liens and EncumbrancesPay off debts or resolve liens before closing.
Forgery and FraudReport to authorities and seek legal counsel.
Heir and Probate IssuesEnsure proper probate completion and their consent.
Boundary Disputes and Survey ErrorsRequest a new survey and resolve disputes.
Unpaid Homeowners Association FeesSettle fees before closing.
Errors in the Legal DescriptionCorrect and re-record the deed with accurate info.
Unpaid Property TaxesPay unpaid taxes before or during closing.

1. Unresolved Liens and Encumbrances

One of the most frequent issues that arise during the closing process in Florida is the discovery of unresolved liens or encumbrances on the property. These could be anything from unpaid taxes, judgments, or contractor liens, known as mechanic’s liens, which are placed on the property due to unpaid work by a professional.

A property cannot be sold with outstanding liens without settling the debt or removing the lien through legal processes. Buyers should perform a thorough title search before closing to ensure no encumbrances are attached to the property. Title insurance can protect buyers in the event that a lien is discovered after closing.

How to Resolve:

To resolve any liens, the current owner must pay off the debt or negotiate with the lienholder to release the lien. In some cases, litigation may be necessary to clear the title.

2. Forged Documents and Fraudulent Activity

Forgery is a serious issue in Florida real estate. It typically involves forged deeds or fraudulent alterations to documents, rendering them invalid. A buyer might unwittingly purchase property from someone who does not legally own it or holds an invalid title.

Since Florida law treats a forged deed as void, and it’s a felony to create such documents, any real estate deal involving forgery will not proceed to closing. In such cases, legal action may be necessary to resolve the situation.

How to Resolve:

If fraud or forgery is suspected, it’s crucial to notify the authorities immediately and seek legal counsel. Collecting all documents and communicating with the relevant legal and law enforcement authorities will be necessary to resolve the situation and protect the buyer’s interests.

Heir and Probate Issues

3. Heir and Probate Issues

In Florida, when a property owner passes away, their property becomes part of their estate and is subject to probate. This can create complications for buyers, especially if the property is sold without proper authority from the heirs or probate court.

In some cases, multiple heirs may inherit the property, and disputes can arise regarding whether to sell or keep the home. If one heir tries to sell without the approval of others, it could result in a defective title. Buyers should ensure that the estate has gone through probate and that all heirs have agreed to the sale.

How to Resolve:

To avoid heir and probate issues, buyers should verify that the probate process is complete and that the property has been legally transferred to the seller. All necessary permissions and legal documentation should be obtained before moving forward with the purchase.

4. Boundary Disputes and Survey Errors

Boundary disputes are a common issue in Florida real estate transactions. Around 20% of property transactions involve some form of boundary dispute or survey error. These arise when there is confusion over property lines due to incorrect surveys or conflicting information in public records. 

This can be especially problematic if part of the property being sold is encroaching on a neighbor’s land or if an easement restricts the buyer’s ability to use the property as intended. A new survey can help clarify the property’s boundaries, but any existing disputes with neighbors should be addressed before closing.

How to Resolve:

Buyers should always request a new property survey before closing to ensure the boundaries are clear. If a dispute arises, it may require negotiations with neighboring property owners or legal action to resolve.

5. Unpaid Homeowners Association (HOA) Fees

In Florida, many homes are part of a homeowners association (HOA), which imposes rules and fees on property owners. Unpaid HOA dues can result in a lien being placed on the property. Even if the seller is in arrears on these fees, the buyer may be responsible for them after closing if the issue is not resolved beforehand.

Buyers should verify that all HOA dues have been paid and request documentation from the HOA to confirm the status of the account before completing the transaction.

How to Resolve:

Ensure that the seller has settled any outstanding fees with the HOA before closing. The seller should provide proof of payment, and the buyer’s title company can confirm that no HOA liens are present.

Errors in the Legal Description of the Property

6. Errors in the Legal Description of the Property

Errors in the legal description of the property can cause significant delays in the closing process. These errors can range from minor typos to major inaccuracies in the boundaries or features of the property, such as incorrect lot sizes, misspelled names, or even incorrect property addresses.

These types of errors can make it impossible to transfer a clean title, as the description must match the public records exactly.

How to Resolve:

In cases where errors are found in the legal description, a corrective deed must be prepared and filed. The deed must be reviewed by all parties and re-recorded with the correct information to ensure the transaction can proceed.

7. Unpaid Property Taxes

Unpaid property taxes are another common issue that can delay a real estate closing in Florida. Approximately 15% of real estate deals in Florida are delayed due to unpaid property taxes. Before a property can be sold, all outstanding property taxes must be paid. 

If the seller owes back taxes, the county may place a lien on the property, preventing the sale from going through. Buyers should request a tax certificate to verify that all property taxes have been paid. In some cases, the buyer and seller may negotiate who will pay the outstanding taxes at closing.

How to Resolve:

To clear the title, all unpaid property taxes must be paid in full before or at the time of closing. Buyers should ensure that any outstanding taxes are accounted for in the closing statement.

Title Insurance and Legal Assistance

Given the variety of issues that can arise during a real estate closing in Florida, it is essential for buyers to protect themselves. One of the most effective ways to do this is by obtaining title insurance. 

Title insurance provides coverage in the event that title defects, encumbrances, or other issues are discovered after the closing has been completed. It is typically a one-time purchase that protects the buyer as long as they own the property.

Additionally, hiring an experienced real estate attorney is vital to ensuring a smooth transaction. An attorney can help buyers navigate the complexities of Florida real estate law, perform thorough title searches, and address any issues that arise during the closing process.

Why Should You Hire a Real Estate Closing Attorney

Why Should You Hire a Real Estate Closing Attorney

Hiring a real estate attorney is one of the most important steps you can take when buying or selling property in Boca Raton. While it may be tempting to handle the process without legal assistance, having an experienced attorney by your side offers numerous advantages. Here are some of the key benefits of working with a real estate closing attorney in Boca Raton:

1. Expert Knowledge of Florida Real Estate Law

Real estate transactions in Florida are governed by a complex set of state-specific laws and regulations. An experienced real estate attorney in Boca Raton, like Jeffrey A. Rosenberg, can provide valuable insights into local and state legal requirements that may impact your transaction. From ensuring proper documentation to addressing potential title defects, an attorney’s expertise can prevent costly mistakes.

2. Thorough Review of Contracts

Real estate contracts are legally binding documents, and even a small oversight can result in significant financial or legal consequences. A real estate closing attorney will carefully review all contracts involved in the transaction, including the purchase agreement, title commitments, and closing documents, to ensure that your interests are protected. They can also negotiate on your behalf to address any unfavorable terms or contingencies.

3. Comprehensive Title Search

One of the most critical aspects of a real estate transaction is verifying the title to the property. A title search ensures that the seller has the legal right to transfer ownership and that there are no outstanding liens, encumbrances, or title defects. 

While title companies can perform this service, a real estate attorney can go beyond just identifying potential issues—they can provide legal solutions to resolve them and ensure a clear title before closing.

4. Assistance with Title Insurance

Title insurance protects buyers from unexpected claims or defects that could arise after closing. Your attorney can help you understand the terms of your title insurance policy and ensure that it provides adequate coverage. They can also assist in negotiating the terms and securing a policy that protects your investment for the long term.

5. Addressing Legal Complexities

Real estate transactions can involve a wide range of legal complexities, from probate and estate issues to zoning and land-use disputes. An experienced attorney can identify potential legal challenges early in the process and provide strategic advice to address them. 

Whether it’s resolving a boundary dispute, handling a foreclosure, or dealing with a complicated estate, having legal counsel ensures that these issues don’t disrupt your closing.

Real Estate Closing Attorney

6. Problem Resolution at Closing

Unexpected issues can arise during the closing process that require immediate attention, such as last-minute title defects, financing delays, or discrepancies in closing documents. A real estate attorney is equipped to handle these problems quickly and efficiently, ensuring that the closing proceeds smoothly. If necessary, your attorney can also represent you in court or mediation to resolve disputes.

7. Protecting Your Financial Interests

Real estate transactions often involve significant financial commitments. By working with a real estate closing attorney, you can have peace of mind knowing that your financial interests are being protected. 

Your attorney will review all financial aspects of the transaction, including closing costs, prorations, and mortgage terms, to ensure accuracy and fairness. This level of oversight can prevent unexpected costs and ensure that you’re not overpaying for the property.

8. Personalized Legal Advice

Every real estate transaction is unique, and a one-size-fits-all approach doesn’t work when it comes to navigating the complexities of buying or selling property. A real estate attorney in Boca Raton can offer personalized legal advice tailored to your specific situation. 

Whether you’re purchasing a primary residence, investment property, or commercial real estate, your attorney will guide you through the process with a focus on your individual needs and goals.

Conclusion

Closing on a property in Florida can be a complex and challenging process, but with the right knowledge and preparation, buyers can avoid the most common pitfalls. By understanding potential issues like liens, forgery, probate complications, and unpaid taxes, buyers can take proactive steps to ensure a smooth closing.
At the Law Offices of Jeffrey A. Rosenberg, PLLC, we specialize in helping clients successfully navigate their real estate transactions. Whether you’re buying or selling property, our team is here to provide expert guidance and legal support to ensure a seamless and stress-free closing process. Contact us today to learn more about how we can assist you with your real estate needs.

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