The Florida Legislature passed legislation relating to residential loan alternative agreements, specifying restrictions on these agreements and prohibiting courts from enforcing them. The bill, SB 770, awaits the governor’s signature.
The bill defines a residential loan alternative agreement as “a signed writing or a signed and written legal instrument or contract between a person and a seller or an owner of residential real property which:
- “Grants an exclusive right to a person to act as a broker for the disposition of the property;
- “Has an effective duration, inclusive of renewals, of more than 2 years; and
- “Requires the person to pay monetary compensation to the seller or owner.”
Residential loan alternative agreements could not authorize a person to place a lien or otherwise encumber any residential real property. It could not constitute a lien, an encumbrance, or a security interest in the residential real property. A court would not be able to enforce a residential loan alternative agreement by a lien or constructive trust in the residential real property or upon the proceeds of the disposition of the residential real property.
The agreement could not be assigned and would be void if the listing services do not begin within 90 days after the execution of the agreement by both parties. It could not be recorded by the clerk of the circuit court.
A residential loan alternative agreement would have to meet all of the requirements of the bill’s provisions or it would be unenforceable in law or equity.
A violation of the bill would be deemed an unfair or deceptive trade practice within the meaning of part II of chapter 501, and a person who violates the bill’s provisions would be subject to the penalties and remedies provided therein.
If signed by the governor, the bill would take effect July 1.