The world of real estate is governed by laws and agreements designed to protect both property owners and real estate professionals. One such agreement that plays a pivotal role in the selling process is the right-to-list agreement. However, a recent development in Florida law, specifically Florida Statute 475.29, has introduced new restrictions and requirements for these agreements.
Right-to-list agreements are contracts between property owners and real estate agents or brokers. In essence, they grant an exclusive right to a particular agent or broker to represent the property owner in the sale of their property. This exclusivity often comes with a specified duration, during which the property owner agrees not to work with other agents or sell the property independently.
Florida Statute 475.29
The recent enactment of Florida Statute 475.29 introduces a set of definitions and criteria aimed at refining and regulating these agreements. The statute defines key terms, such as “residential loan alternative agreement”, “disposition”, and “residential real property”, setting the stage for a more precise understanding of the law’s application. Here are the provisions and restrictions of the statute:
- Encumbrance Prohibition: The statute explicitly prohibits any authorization for a person to place a lien on or otherwise encumber any residential real property. This safeguard ensures that the property remains free from additional financial burdens related to the agreement.
- Non-Assignable: Florida Statute 475.29 makes it clear that a residential loan alternative agreement may not be assigned. This restriction maintains the intended exclusivity between the property owner and the chosen real estate professional.
- Void if Services Delayed: To prevent indefinite agreements, the law declares a residential loan alternative agreement void if listing services do not commence within 90 days after execution by both parties. This provision encourages prompt and efficient action.
- Non-Recordable: The statute expressly states that a residential loan alternative agreement may not be recorded by the clerk of the circuit court. This ensures that the agreement doesn’t create a public record that could impact the property’s title.
- Enforceability Criteria: To be valid, a residential loan alternative agreement must meet all the specified requirements outlined in the statute. Failure to comply renders the agreement unenforceable in law or equity.
- Consumer Protection: Violation of the statute is deemed an unfair or deceptive trade practice, subjecting the offender to penalties and remedies as provided in part II of chapter 501. This reinforces consumer protection measures within the real estate industry.
While right-to-list agreements provide a level of commitment between property owners and real estate professionals, Florida’s new regulations under Florida Statute 475.29 aim to strike a balance. By introducing clear definitions, restrictions, and consequences, the law ensures that these agreements serve their intended purpose while safeguarding the rights of property owners. It’s a step toward a more transparent and accountable real estate landscape in Florida. Property owners and real estate professionals alike should familiarize themselves with these changes to navigate the real estate market effectively.
Interested in learning more about the reason behind this new law and what to do if you are stuck in a right-to-list agreement? Listen to our recent podcast episode!
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