Florida – September 30, 2022
The Orlando real estate marketing is cooling down and more buyers are backing out of their contracts. Real estate analysts cite the cause as higher interest rates increasing the number of home sale cancellations nationwide and noting that 24.5% of pending sales were cancelled in the Orlando metro area in the past few months. The cancellations seem to be related to the concern over the higher monthly obligations with the increased interest rates and inflation and increase in gas prices. A Florida purchaser cannot back out of a deal after signing a home sale contract unless clauses within that document state otherwise and the contract must have a provision to allow cancellation for a purchaser. It is always prudent to hire a Florida real estate attorney to review documents for sale of a property before signing.
Contract rescission has complex viewpoints for buyers and sellers involved.
For example, buyers purchasing a residential condominium in Florida have a fifteen-day rescission period. As provided by Florida Statute §718.503(1), this period permits buyers to review all the documents involved in the transaction, double-check the contractual terms, and cancel the contract when applicable.
Sellers may have remorse after closing a real estate transaction, but they cannot back out and forfeit the earnest deposit money held in escrow. Consequently, if a seller decides to cancel a transaction when the property is under contract, he/she can be legally forced to close the deal or be served a lawsuit for monetary damages.
Canceling a Florida residential contract scenarios.
- A buyer who has an “AS IS” Residential Contract for Sale and Purchase has a strong right of cancellation during the inspection period. Most of these types of contracts state that the option to terminate resides in the buyer’s “sole discretion” and the buyer’s deposit is to be returned to him/her.
- Members of the military have special ability to terminate a contract if they get a permanent change of station order requiring them to move 35 miles or more from the contracted property location. The service member must provide a notice to the seller or the mortgagor along with either a copy of the official military orders or a written verification signed by his/her commanding officer. (Section 689.27(2)(a), Florida Statutes)
- After a seller has accepted a buyer’s offer on a property, the buyer does not automatically have a three-day right to cancel unless the contract includes that as a specific provision.
- A contract may have different contingencies that allow for either party to cancel. As with any contractual interpretation question, the language of the contract is paramount in determining the rights of the parties, so our advice is to always suggest to the parties that they seek legal advice from a licensed professional if they wish to gather further information about contract rights.
Home buyers who get cold feet regarding the purchase of an Orlando property should contact a Florida real estate lawyer with questions and concerns to help avoid any negative consequences that could involve monetary loss or unwanted litigation.
Seek legal counsel.
Experienced Florida real estate attorneys at Legal Counsel, P.A. can review purchase and sale agreements and identify the language that will support buyer/seller rights to cancel real estate purchase contracts in Orlando.
Legal Counsel, P.A.
189 S. Orange Ave., Ste. 1800
Orlando, Florida 32801
- Chapter 718 Section 503 – 2021 Florida Statutes – The Florida Senate (flsenate.gov)
- Chapter 475 – 2021 Florida Statutes – The Florida Senate (flsenate.gov)