QUESTION: My husband and I are about to purchase our first home in Florida. We've been through this process before many years ago in a northern state but things are different here. Our Realtor, for example, has been talking about contingencies. I was embarrassed to say I had no idea what that meant. Are they important?
ANSWER: Contingencies are conditions that are listed in the purchase contract that must be met before the closing will take place. Contingencies may include your success in obtaining financing, the outcome of the property inspections, obtaining insurance and anything else that must occur before you close.
Contingencies are very important. They protect you if something unforeseen takes place, like your financing falling through unexpectedly. They protect you if the inspection discloses something dreadful, like a crumbling slab. Both you and the seller will want to be sure that contingencies are in the contract.
The contract will also include a certain amount of time, usually several weeks, between the signing and final closing of the deal. During this period, you and the seller should meet the requirements of the contract and remove the various contingencies. You, for example, should secure the loan and schedule inspections. Both of you should keep each other informed about progress through your Realtors.
Some contingencies are based upon a specific situation. The seller might make the sale contingent upon his obtaining new housing. Because homeowners living in states with a history of hurricanes and household toxic mold have been surprised to be declined for insurance, some buyers are adding an insurance contingency to their contracts.
Contingencies, especially those that are unusual, should be clearly stated in the contract. They are subject to negotiation before the contract is signed.
As with most important transactions involving property, consider obtaining the help of an attorney who is familiar with real property law, especially if the contingencies are unusual.
Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., in Cape Coral.
This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.