Eric P. Feichthaler

Dear Mr. Feichthaler:

I have a question that must be also in the minds of others who own homes in the upcoming Utility Expansion North 1 for your Breeze commentary. That would be with regard to the SPECIAL ASSESSMENTS section of the FAR-BAR AS IS purchase agreement. It is for certain some are fearful and will want to sell. So the question for many including myself is:

Does the Special Assessments: 9 (f) (a) Seller shall pay installments due prior to Closing and Buyer shall pay installments due after Closing.

Installments prepaid or due for the year of Closing shall be prorated. CHECK BOX absolve the cost of Utility Expansion North 1 Assessment from the seller after the closing. Assuming the assessment is not reached an effective date as the contract states? Or should other language be added to the contract?

– Terry Lee P.

Dear Terry Lee:

This is a great question that impacts thousand of homeowners. Utilities expansion has been a controversial topic in our city, most notably because of the costs. Properly addressing utility assessments in the contract is vital to avoid disputes and clarify responsibilities.

As you note, Paragraph 9(f) in the standard contract does a relatively good job in addressing the issue, but not fully. It covers assessments “certified, confirmed, and ratified before closing”. Con-versely, this paragraph does not address assessments that everyone knows are coming, but have not been voted upon yet. For assessments already in place, most residents pay them through their tax bill in annual installments. In most cases, the buyer assumes these assessments and continues to make the payments in future years. However, there is a box that can be checked that requires the seller to pay off the entire assessment balance at closing.

For the clients I represent, this section is one that always receives close attention. If you, as seller, check the box to pay them off in full, this could result in the transfer of value of tens of thousands of dollars to your buyer, which may not have been intended through negotiations.

When I draft a contract, I include additional language whenever assessments have not been certified. Typically, the language would disclose the potential for utility expansion, and make clear that the seller has no responsibility for it into the future. Although leaving this language out may not create a responsibility for the seller in the future, it is best to clarify this sort of detail. Sure, you may not be “responsible” legally, but do you want pay a lawyer someday to defend you on that point? If there is any doubt on how standard language in a contract impacts your transaction, address the issue through addenda or the additional terms section in the contract.

Although most parties do not obtain legal counsel prior to signing the contract, it is highly recommended. This is especially true in our city, where assessments, plat errors and other unique issues can complicate real estate transactions. Although the Realtors involved may have experience and skill, it is not their role to know the intricacies of Florida law. Their primary role is to find sellers a buyer, and to assist buyers in finding their property, and negotiate price. I can’t emphasize enough the importance of knowing exactly what you are signing before committing to a sale or purchase. I wish everyone in the new utility areas a quick and relatively quiet expansion!

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.