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The Florida Senate

2014 Florida Statutes

Title XXXII REGULATION OF PROFESSIONS AND OCCUPATIONS
Chapter 475 REAL ESTATE BROKERS, SALES ASSOCIATES, SCHOOLS, AND APPRAISERS Entire Chapter
SECTION 709
Duties of closing agent; reservation of owner’s net proceeds.
F.S. 475.709
475.709 Duties of closing agent; reservation of owner’s net proceeds.—
(1)(a) The closing agent shall reserve from the owner’s net proceeds an amount equal to the commission claimed by the broker in the commission notice if, before the closing agent disburses the owner’s net proceeds from the closing of a disposition of commercial real estate:
1. A commission notice pertaining to the commercial real estate is delivered to the closing agent in accordance with s. 475.705;
2. A commission notice pertaining to the commercial real estate has been recorded for at least 60 days pursuant to s. 475.707 and has not expired or been released or canceled as provided in this part; or
3. The closing agent has actual knowledge of a commission notice pertaining to the commercial real estate that has been recorded pursuant to s. 475.707 and has not expired or been released or canceled as provided in this part.
(b) If the owner’s net proceeds are insufficient to pay the full amount of the claimed commission, the closing agent shall reserve the entire amount of the owner’s net proceeds. The closing agent shall release the reserved proceeds only in accordance with the provisions of this part.
(2)(a) The closing agent designated to close a transaction for the disposition of commercial real estate may require the owner of the commercial real estate to deliver a sworn affidavit identifying the commercial real estate and disclosing to the closing agent:
1. Whether the owner is a party to any brokerage agreement under which any broker or brokers may have a right to claim a commission from the disposition of the commercial real estate.
2. The name, mailing address, and telephone number of any brokers who may have a right to claim a commission, if known to the owner.
3. The amount of any and all commissions that may be claimed under any brokerage agreement disclosed in the owner’s affidavit, to the best of the owner’s knowledge and belief.
4. Whether the owner confirms or disputes the amount of any commission claimed from the disposition of the commercial real estate as disclosed in the owner’s affidavit.
(b) If the closing agent receives an affidavit from the owner under this subsection disclosing that any commission may be claimed from the disposition of the commercial real estate, regardless of whether the owner confirms or disputes the commission, the closing agent shall reserve from the owner’s net proceeds an amount equal to the total commission amount disclosed by the owner in the affidavit. Upon request by a broker who has a brokerage agreement with the owner covering the commercial real estate identified in the owner’s affidavit, the closing agent shall deliver a copy of the affidavit to the broker. If the owner’s net proceeds are insufficient to pay the full amount of the commission so disclosed, the closing agent shall reserve the entire amount of the owner’s net proceeds. If the owner’s affidavit discloses a commission amount that is different from the commission amount required to be reserved under subsection (1), the closing agent shall reserve the greater of the two commission amounts. The closing agent shall release the reserved proceeds only in accordance with the provisions of this part.
(3) If the provisions of subsection (1) do not require the closing agent to reserve against the owner’s net proceeds on account of a commission notice pertaining to the commercial real estate, and if the closing agent receives an owner’s affidavit pursuant to subsection (2) stating that the owner is not a party to any brokerage agreement under which any commission may be claimed from the disposition of the commercial real estate, the closing agent has no duty under this part to reserve any money or property for a commission from the owner’s net proceeds from the disposition of the commercial real estate.
(4) If the closing agent determines that the owner’s net proceeds from a disposition of commercial real estate are insufficient to pay the full amount of the commission claimed in a commission notice or disclosed in an owner’s affidavit, the closing agent shall, within 3 days after making that determination but no later than the closing of the disposition, notify the owner and the broker of the determination. The closing agent’s determination that the owner’s net proceeds are insufficient under this part, however, does not relieve the owner from the owner’s contractual obligations under the brokerage agreement to pay the full commission owing to the broker.
(5) If the owner confirms that a commission is payable to the broker, at the closing of the disposition of the commercial real estate the closing agent shall release to the broker the confirmed amount of the commission from the reserved proceeds. A settlement statement executed by the owner and showing the payment of a commission to the broker is confirmation by the owner of the commission amount shown on the settlement statement. If the owner disputes the broker’s right to receive all or any portion of the claimed commission, the closing agent shall release to the broker from the reserved proceeds only the undisputed portion of the commission, if any. Until the rights of the owner and the broker with respect to the disputed reserved proceeds are determined pursuant to s. 475.711 or s. 475.713 or the owner and the broker otherwise agree in writing, the closing agent shall not release the disputed reserved proceeds to any person other than to deposit the same in the registry of the court having jurisdiction of the dispute.
(6) The commission claimed in the commission notice shall be deemed confirmed by the owner, and the closing agent shall release the reserved proceeds to the broker, if the closing agent is required pursuant to subsection (1) to reserve any or all of the owner’s net proceeds and if all of the following conditions have been met:
(a) Five days have passed after the closing.
(b) The owner has neither confirmed nor disputed the claimed commission to the closing agent.
(c) The closing agent receives reasonably satisfactory evidence that the broker delivered a copy of the commission notice to the owner in accordance with s. 475.705.
(7) If the owner’s net proceeds consist in whole or in part of a purchase-money note, and if the money portion of the owner’s net proceeds is insufficient to pay the full amount of the commission claimed, the broker’s lien under this part for the portion of the commission not paid from the money proceeds shall attach to the purchase-money note and any security therefor, and the closing agent shall reserve and release the purchase-money note in accordance with this part in the same manner as the money portion of the reserved proceeds. If the owner and the broker are unable to agree within 5 days after the closing regarding the closing agent’s release of the purchase-money note, the closing agent shall interplead the purchase-money note along with any money reserved proceeds in accordance with s. 475.711.
(8) If the disposition of the commercial real estate is part of a like-kind exchange by the owner which is deferred from federal income tax under s. 1031 of the Internal Revenue Code of 1986, as amended, and if all of the owner’s net proceeds in excess of undisputed commissions shall be delivered to a third party in order to qualify the disposition for such tax deferral treatment, the owner may substitute other cash, a surety bond, an unconditional letter of credit, or other liquid security acceptable to the broker in lieu of any disputed reserved proceeds held by the closing agent under this section or deposited in the court registry in accordance with s. 475.711.
(9) Upon request of the closing agent or the owner, any broker who has recorded a commission notice under s. 475.707 shall submit a satisfaction or release of the commission notice in recordable form to the closing agent to be held in escrow pending the closing and the closing agent’s release to the broker of the portion of the owner’s net proceeds reserved by the closing agent under this section. The closing agent is authorized to deduct from the reserved proceeds payable to the broker the cost of recording the satisfaction or release of the commission notice.
(10) Neither the closing agent’s requirement for an owner’s affidavit pursuant to subsection (2), nor the closing agent’s reservation of any portion of an owner’s net proceeds pursuant to subsection (1) or subsection (2), shall relieve the owner of the owner’s obligation to close the transaction for the disposition of the commercial real estate, including, without limitation, any obligation of the owner to the buyer under the purchase and sale contract to discharge mortgages, liens, or encumbrances against the commercial real estate that were recorded after the commission notice and, therefore, are not subtracted from gross sales proceeds when computing the owner’s net proceeds under s. 475.719.
(11) A closing agent is not liable to the owner, the broker, or any other person in any civil action for any action taken by the closing agent to comply with the provisions of this part.
(12) No provision of this part shall require a closing agent to serve involuntarily more than 5 days after a closing as an escrow agent or stakeholder for any moneys or other property that are disputed by the owner and the broker under the provisions of this part.
History.—s. 1, ch. 2005-275; s. 11, ch. 2006-210.