Country Buying Guides - Florida, USA

The conveyancing process

• Independent Lawyer
It is essential to use an independent lawyer with a legal knowledge of both the English and Floridian legal systems, who are able to translate the documents and explain the terms to your full understanding.

• Due Diligence
It is important to carry out due diligence on the property you are purchasing in order to ensure there are no encumbrances on the property. Your independent lawyer will do this on your behalf.

• The Real Estate Agent
All properties for sale in Florida are listed in a central database, saving you having to search many different estate agent offices. Each property is represented by a vendor’s agent, they represent the sole interests of the vendor, commonly the purchaser also gets a purchasers agent. Vendor agents in the US act as a lawyer would in the UK so it is common during a purchase of a property in Florida for your lawyer to deal with an agent not an attorney.

• The Offer
Initially an oral offer on a property is submitted through your Agent who will then follow it up in writing, the vendor may counter your offer, beginning a negotiation process that, hopefully, will lead to an agreement on price, terms, and closing date. Once verbally agreed on the sale, it's the purchaser to make a small deposit to show goodwill.

• The Purchase Contract
Following your goodwill deposit, a purchase contract will be prepared for you and the vendor to sign; your lawyer should consider each contract before signing. These contracts are binding and will require you to pay a 10 % deposit into an Escrow Account (An account, where the balance is unable to be access until completion of the transaction). Dates and deadlines are a crucial element of the Floridian property purchasing process. If you fail to observe dates stipulated in the contract, you risk losing your deposit

• Title Insurance
Due to the many irregularities with the property titles in the Florida it has become mandatory for purchasers to take out Title Insurance. Once the purchase contract has been signed, your lawyer, after completing due diligence, will use a Title Insurance company to check the legal title of the property and insure it against any third-party claims protecting you from any future ownership disputes.

• Completion
Assuming there are no title issues with the property and your funding is in place, you should be able to complete, often only 4-6 weeks after you made an offer. Once your lawyer has checked the final contract of sale can be signed and the final balance can be transferred to the escrow account. Other fees are payable at completion.

• Costs
Fees payable on completion usually include: Documentary Stamps ($0.35 for every $100 of mortgage), Intangible Tax - 0.002% of your mortgage amount, Local Property Tax - paid to the county you are in, it's based on the assessed value of your property – similar to UK Council Tax, Title Insurance - usually about 1% of a property's cost, mandatory in Florida, Title company's fees - usually around $250.

• Taxation
As a non national first time purchaser of a property, you may be required to pay your first year's home insurance in advance, plus two or three months local taxes. The US taxation system is a complex one, and may involve payments to at least four different levels of government: local, regional, state and federal. A Double Taxation Treaty between the US and the UK prevents double payment of taxes

• Inheritance
Most foreign legal systems’ inheritance law is different to our system, hence it is extremely important to use your independent lawyer to help you make a will so that in the unfortunate event of your passing, your wishes and not the word of the law is followed.

• Residency
Florida’s immigration laws are strictly enforced. Those seeking a Florida Green Card, which entitles them to live and work in the state, face close scrutiny by the Immigration and Naturalization Service, particularly if they wish to start a business. Those not planning to work, including retirees must be able to demonstrate substantial means. This can be an obstacle to many people’s dream of retiring to Florida.

In Assocation With The International Property Law Centre LLP