Check carefully for inspection periods that include open permit and code violation searches on your contract
Many of the newer versions of the Florida real estate contracts include code violation, municipal lien and open permit searches as part of the INSPECTION period. Since many municipalities (City of Coral Gables, City of Hollywood, City of Doral) have turnaround times as long 14-21 days for these type of searches, your buyer can find themselves outside of inspection periods with permit or code violation problems that are no longer the seller’s obligation to resolve. These can easily amount to thousands, if not tens of thousands of dollars. Here is a sample of current contract versions that work this way:
Version: FAR/BAR As is 2
Version: CRSP13
Here are a few simple ways to prepare your contracts to avoid this problem:
- Use the CRSP13 contract which is a business day contract and allows more time for all deadlines
- Set the inspection period at 15 + days to allow sufficient time for all the reports to be completed
- Include in the additional terms of the contract the following sentence: “Seller will close out any open permits or code violations before closing”
- Confirm the title company you are using has ordered lien/code/open permit search in writing and ask for turnaround time to establish completion date. Ask for inspection period extension, if needed.
For more information or a complimentary contract review, please call us at 305-271-0100×701 or [email protected]
Disclaimer: The Closing Company, Inc. and blog post is not a law firm and is not providing legal or tax advice. For legal advice, please consult with a licensed Attorney. For tax advice, consult with a Certified Public Accountant.
