The Definitive Guide to Florida Real Estate Law

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Exploring the Intricacies of Real Estate in the Sunshine State

Florida is one of the fastest-growing economies in the country. This growth attracts first-time homebuyers, seasoned investors, and real estate professionals looking to capitalize on Florida’s thriving market. 

Navigating real estate in Florida requires a firm understanding of state-specific laws. In a constantly shifting marketplace, it is easy to get confused by different types of property rights, contracts, zoning regulations, and more. This is particularly true if you’re buying, selling, or investing in an area like Florida.

Vo Law provides the legal guidance you need to navigate Florida’s real estate laws with confidence.  

Disclaimer: The following information is intended to provide insights into Florida real estate, but should not be considered legal advice. If you have any questions please contact the offices of Vo Law at (904) 815-0001. 

Property Rights in Florida

Types of Vesting

Florida recognizes several types of property ownership, each offering different rights and implications for titleholders. The most common types include:

- Joint Tenancy: Ownership is shared by two or more people, with rights of survivorship. If one owner passes away, their interest automatically transfers to the surviving owner(s). This structure helps avoid probate, as ownership automatically passes to the surviving owners.

- Tenancy by the Entirety: Reserved for married couples, offering unique protections, such as shielding the property from certain creditors of one spouse.

- Tenants in Common: Ownership is shared by two or more people, but without rights of survivorship. Each owner holds a distinct, transferable interest, which can be sold, gifted, or inherited. If one owner passes away, their share is distributed according to their will or state intestacy laws rather than automatically transferring to the other owners. This structure allows for unequal ownership percentages. 

Homestead Protections and Exemptions

Florida’s homestead laws offer unique protections for primary residences. Properties declared as a homestead are protected from certain creditors and receive tax benefits. One key tax benefit is the Save Our Homes (SOH) cap, which limits increases in assessed value to the lower of 3% or the change in the Consumer Price Index (CPI) per year, helping homeowners save on property taxes over time. Additionally, Florida’s homestead exemption provides up to a $50,000 reduction in taxable value. The first $25,000 applies to all property taxes, while the second $25,000 applies only to non-school taxes for properties assessed over $50,000. Homestead laws also limit the forced sale of a primary residence under certain conditions, offering homeowners additional financial security.

Community Property vs. Separate Property

Florida is not a community property state. Instead, it follows common law property rules, meaning that assets acquired before marriage, as well as gifts and inheritances received individually during marriage, are typically considered separate property unless they are commingled with marital assets. Understanding these distinctions is essential for married couples considering property investments or estate planning.

Nine states recognize community property laws by default, including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Additionally, Alaska allows couples to opt into a community property system.

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Contracts and Agreements

Purchase and Sale Agreements

A Purchase and Sale Agreement outlines the terms of a real estate transaction between buyer and seller. In Florida, while no specific contract form is legally required, the agreement must include essential elements such as offer, acceptance, consideration, and a clear property description to be legally binding. 

Key clauses typically include:

- Offer and Acceptance: Both parties must agree to the terms, and there must be a clear exchange of consideration for a valid contract.

- Purchase Price and Payment Terms: Specifies the total purchase price, deposit amount, and how the balance will be paid (financing or cash).

- Closing Date and Conditions: Establishes the date, location, and any conditions that must be met before ownership transfers.

- Title and Survey Requirements: Details who is responsible for the title search, title insurance, and whether a survey is required.

- Contingencies: Many contracts include contingencies for financing, inspections and due diligence, and appraisal, allowing buyers to withdraw if specific conditions are not met.

- Prorations and Closing Costs: Outlines how expenses like property taxes and HOA fees will be divided at closing.

Real Estate Contract Laws

In Florida, real estate contracts are governed by the Statute of Frauds (Fla. Stat. § 725.01), which requires most real estate agreements to be in writing to be legally enforceable. This includes:

• Contracts for the sale of real property

• Leases longer than one year

• Real estate commission agreements (for sales transactions)

• Certain loan agreements (such as mortgages and guarantees)

Oral contracts for the sale of real estate are generally NOT enforceable in Florida due to the Statute of Frauds. 

Lease Agreements

Florida differentiates between residential and commercial lease agreements, each with unique legal requirements and tenant protections.

Residential leases (governed by Florida’s Landlord-Tenant Act) provide stronger tenant protections, including habitability standards, security deposit regulations, and strict eviction procedures. Landlords must also comply with certain disclosure requirements, such as rules for handling security deposits.

Commercial leases operate under general contract law and offer fewer tenant protections since businesses are presumed to negotiate terms fairly. Florida law does not require commercial landlords to maintain premises or provide security deposit regulations unless stated in the lease.

Key lease terms to clarify include rent amount, maintenance responsibilities, lease duration, permitted use clauses, renewal terms, and assignment rights.

Title Verification, Types of Deeds, and Escrow

Title Search and Insurance

A title search is a crucial step in a real estate transaction. It verifies ownership history and identifies any liens, encumbrances, or legal issues that may affect the property. Title searches include reviewing public records, deeds, tax documents, and court filings to ensure clear title before a sale. Title insurance provides financial protection against undiscovered claims or defects in the property’s title history, such as unpaid liens, ownership disputes, or recording errors.  

Types of Deeds in Florida

Florida recognizes several types of deeds for property transfer. Some types of deeds that are commonly seen in Florida are:

- Warranty Deed: Offers the highest protection, guaranteeing that the title is clear of encumbrances and defending against all past claims, even those before the seller’s ownership.

- Special Warranty Deed: Guarantees only against claims or defects arising during the seller’s ownership, not before.

- Quitclaim Deed: Transfers whatever interest the guarantor may have without guaranteeing clear title.

- Lady Bird Deed (Enhanced Life Estate Deed): Allows property owners to retain control during their lifetime while automatically transferring ownership to beneficiaries upon death, avoiding probate. 

These deeds can easily be accessed via the county Clerk of Courts. If you are looking for records in St. John’s County, where Vo Law is based, you can perform online research here.

Escrow Requirements

Escrow accounts protect buyers, sellers, and lenders by securely holding funds until all conditions of the sale are met. In Florida, law firms, title companies, and certain real estate brokerages may hold escrow funds. As a law firm, Vo Law holds escrow funds in a trust account governed by the Florida Bar, ensuring compliance with strict fiduciary and ethical standards. Florida Bar rules regulate the handling of trust accounts to protect all parties involved in the transaction. By using a Florida Bar regulated trust account, buyers and sellers benefit from an added layer of security and professional oversight, ensuring that funds are managed with the highest level of accountability. 

Mortgages in Florida Real Estate Transactions 

Mortgage Agreements

In Florida, real estate purchases often involve financing. Mortgage agreements must be in writing and clearly outline loan terms, interest rates, and repayment schedules.

Judicial Foreclosure

Florida is a judicial foreclosure state, requiring lenders to go through the court to foreclose. Buyers should understand mortgage obligations and the risk of default.

Financing Protections

Florida law includes consumer protections against unfair lending practices, but buyers should always review loan terms carefully and work with reputable, licensed lenders.

1031 Exchanges 

Investors may defer (but not eliminate) capital gains taxes through a 1031 exchange, named for Section 1031 of the Internal Revenue Code. This tax-deferral strategy allows investors to reinvest proceeds from the sale of one "like-kind" investment property into another without immediately incurring capital gains taxes. Strict rules apply, including a 45-day property identification period and a 180-day deadline to complete the exchange.

Kathryn Pope and Amy Vo of Vo Law

Florida-Specific Legal Considerations for Real Estate Investors

Foreign Investment in Real Property Tax Act (FIRPTA)

Non-U.S. residents selling property in Florida must comply with the Foreign Investment in Real Property Tax Act (FIRPTA), which requires the buyer to withhold and remit a percentage of the sale price (typically 15%) to the IRS to cover potential capital gains taxes. Certain exemptions or reductions may apply based on the sale amount and the buyer’s intended use of the property. 

Vo Law has extensive experience working with international investors across Florida, assisting in acquisition, development, management, and leasing of multimillion dollar properties, including office buildings, retail centers and apartment complexes. If you are looking for assistance in this area, please contact our St. Augustine-based offices at (904) 815-0001.

Vacation Rental Laws

Short-term vacation rentals are popular in Florida but are regulated at both the state and local levels. While Florida allows vacation rentals, local governments may impose zoning, licensing, and tax requirements. Additionally, HOAs and condominium associations may enforce rental restrictions that limit or prohibit short-term leasing. 

Investment Entities

Many investors hold Florida properties in Limited Liability Companies (LLCs) to limit liability. LLCs offer liability protection and flexible ownership structures. 

Working with Real Estate Professionals

Real estate attorneys, like those at Vo Law, play a critical role in Florida transactions, particularly for complex deals, title issues, or if legal disputes arise. They ensure contracts comply with state law, address title issues, and protect client interests throughout the transaction. At Vo Law, we assist buyers and sellers in transactions throughout the State of Florida, ensuring contracts are legally sound and any title or ownership issues are resolved before closing. 

Vo Law is Ready to Assist on Your Real Estate Journey

Understanding Florida’s real estate laws is essential for anyone involved in the state’s dynamic property market. By familiarizing yourself with these legal requirements, you’ll be better prepared to navigate transactions and protect your interests. When in doubt, consult with licensed real estate professionals and legal experts to ensure a smooth, legally sound process. 

Contact Vo Law today to protect your interests in Florida’s real estate market and receive expert guidance tailored to your needs in Florida.