Florida Real Estate Title Explained
A Guide to the FR/Bar ASIS-7 Contract
1. Title Evidence & Insurance
The Seller initiates by providing proof of clear title, usually via a title insurance commitment, safeguarding the Buyer.
- What: Seller delivers a Title Insurance Commitment. Post-closing, Buyer gets an Owner's Policy of Title Insurance.
- Purpose: Insures Buyer's "Marketable Title" against undiscovered past defects.
- Who Pays & Selects Agent (Determined by Para 9(c) selection):
- 9(c)(i): Seller designates Agent & pays for Owner's Policy. Buyer pays Lender's Policy.
- 9(c)(ii): Buyer designates Agent & pays for Owner's Policy & Lender's Policy.
- 9(c)(iii) (Regional): Buyer designates Agent & pays Owner's/Lender's premiums. Seller pays for title search (capped), etc.
- Title Evidence Deadline: At least 15 days before Closing (or 5 if cash deal). Critical timing! (Para 9(c))
- Seller's Existing Evidence: If Seller has a prior policy, it's shared within 5 days of Effective Date.
2. Title Examination (Buyer's Review)
Upon receiving the Title Commitment, the Buyer (or their attorney) meticulously reviews it for potential issues.
- Buyer's Role: Scrutinize Title Commitment for defects. (Standard A(ii))
- Deadline to Notify Seller of Defects: 5 days after receiving Title Commitment.
- "Defects": Issues rendering title unmarketable (e.g., unexpected liens) beyond "Permitted Exceptions" (Standard A(i)).
- Permitted Exceptions: Typically zoning, plat restrictions, utility easements, current year taxes. Must NOT prevent residential use.
3. Survey (Optional but Recommended)
A survey maps property boundaries and improvements, revealing physical details not in public records.
- Buyer's Option: May obtain a survey at their expense. (Para 9(d))
- Purpose: Identify encroachments, boundary issues, unrecorded easements.
- Seller's Existing Survey: If available, shared within 5 days of Effective Date.
- Survey Defect Notification Deadline: Within 5 days of Buyer receiving survey (no later than Closing). (Standard B)
- Properly identified survey issues become Title Defects, subject to cure.
4. Title Cure Process
If defects are found and reported, the Seller has an opportunity to resolve them.
Seller's Obligation (Standard A(ii))
Seller has 30 days ("Cure Period") after Buyer's notice to use "reasonable diligent efforts" to fix defects.
If Seller Cures Defects:
Seller provides written notice (with proof). Parties proceed to Closing.
If Seller CANNOT Cure Defects:
Buyer has 5 days post-Cure Period to:
- Extend Cure Period (up to 120 days).
- Accept title with defects and close.
- Terminate Contract & get Deposit refund.
Note on Additional Terms:
Specific contracts might include additional clauses (e.g., in Para 20) requiring Seller to clear all liens/permits. Always review the full document.
Key Takeaways & Realtor Tips
- Deadlines are Paramount: Track dates for Title Evidence, Examination, Survey objections, and Cure Periods.
- Owner's Title Insurance: Crucial Buyer protection. Clearly explain its benefits.
- Advise Survey: Strongly recommend Buyers obtain a survey to identify physical property issues.
- "Permitted Exceptions": Ensure Buyer understands these and their impact (must not hinder residential use).
- FIRPTA Compliance: Verify Seller's foreign/non-foreign status for withholding (Para 10(i), Standard V).
- Review Full Contract: Always check for addenda or additional terms (like Para 20) modifying standard duties.
- Seek Legal Counsel: Advise clients to consult a Florida real estate attorney for specific legal advice.