1. A NON-RESIDENT'S GUIDE TO BUYING PROPERTY IN FLORIDA
By: JAMES R. LAVIGNE, ESQ.,
Juris Doctor, University of Florida,
L.L.M., International Law, London
Copyright 2013, James R. Lavigne, reprinted with permission
One of the world's fastest-growing tourist destinations,
Florida, has also emerged as one of the most desirable areas
for international investments. A major reason is that the
area offers a unique combination of climate, weather and
dollar value for land and housing.
The area has a host of very professional property
developers, brokers and builders. But, in common with any
fast-growing areas, investors should be inquisitive about the
people they are dealing with.
Our suggestion is to always investigate a home seller's
background and their business reputation. Another point is
that resales of properties simply don't get the same value
and protection or security as original purchases of homes.
Original homes sellers can give extended homeowners
warranties and guaranties that you often cannot get with a
resale.
Buying and investing in Florida can be both exciting and
profitable. But, buyers should exercise the same careful
planning here that they know is necessary elsewhere.
Many of the British investors who retain our firm find
that the immigration laws allow them to stay in Florida for
up to six months out of each year, giving them plenty of time
to thoroughly investigate their investments.
For other British investors who want to both live and
work in Florida, U.S. immigration laws allow this to be done
in several ways. One approach is to obtain the E-1 visa as a
treaty trader. This is for someone engaged in substantial
trade in goods or services between the U.S. and the U.K.
Another way to live and work in Florida is to obtain an
E-2 visa, which is available to investors or executives and
managers with specialized knowledge who have made a
substantial investment in an ongoing commercial enterprise
which is not marginal in nature. Both E-1 and E-2 visas can
be renewed indefinitely so long as the business continues.
Serious investors who want a green card find that an
investment of at least $1,000,000 is required. The
investment must also create employment for ten U.S. citizens
or permanent residents. Investments for as little as
$500,000 can be done for enterprises located in high
unemployment and rural areas.
Knowing the law is often important in buying Florida

2. property. This is an area where a law firm such as South
Milhausen, P.A. can contribute. Here are seven other major
steps to successfully buy all types of property in Florida.
(1) Know the property. Visit the property. Never sign
your contract until after you have actually seen what you are
buying. Remember, this is a good way to avoid any unpleasant
surprises.
(2) Know your contract terms before you sign any
contract to purchase real estate. Your lawyer can help
answer any questions you have about any aspect of these
terms. You'll want to be sure you understand all the
implications of what you are signing.
(3) Know the total cost. The reason this is important
is financing fees, documentary tax stamps and recording fees.
Before making a decision on spending your money, you
obviously want to know exactly what a property is going to
cost you.
(4) Find out how your property can be used.
Investigate the zoning. You may find a property can be used
for short-term rental, for example, a factor giving it added
value. Conversely, you might find zoning limitations that
could make your property less valuable.
(5) Get the best financing available at the lowest and
best rate. Shop around for financing. You'll find that both
interest rates and deposit requirements vary. Shopping
around is always good advise but in this case it is even more
important because there are many choices and you will want to
find the best one possible for your situation.
(6) Know your legal rights before you buy anything.
Taxes, possible uses of a property and immigration laws in
conjunction with buying property in Florida are all key
issues for your successful land acquisition. Your lawyer can
acquaint you with details on all these issues.
(7) Consult with and obtain the advice of
professionals, such as your lawyer, your accountant and your
banker. This might be the most important advice you will
receive.
BUYING A HOME IN FLORIDA
The first legal step in purchasing a home if Florida is
generally the preparation of the real estate contract by the
real estate broker and the signing of the same by the
prospective buyer with a deposit, usually paid by the buyer
and held by the real estate broker or lawyer in an escrow
account. This is the most important step in purchasing a
home in Florida. The details of the real estate contract
will determine what you can buy and how you buy it. Before
you read the contract, you should discuss it carefully with

3. your attorney. In Florida, the Florida Association of
Realtors and the Florida Bar have prepared a standard
contract for the sale and purchase of houses. Beware if the
broker or seller does not use this contract!
This contract for sale and purchase sets forth the legal
description of the property and sets forth the time that it
must be accepted by the seller and the terms for financing.
The contract will also provide that the seller shall prove
that he owns title to the property and then sets forth a date
when the buyer and the seller exchange deeds and monies.
This is called the closing date.
The contract also sets forth any restrictions for the
use of the house and any other types of special clauses.
In Florida, title is usually given as fee simple. If a
husband and wife purchase the property together, they own it
as joint tenants and upon the death of one, it automatically
goes to the other without need for probate. There can be tax
consequences, however.
The contract for sale and purchase of homes in Florida
also contains what obligations are those of the seller and
what obligations are those of the buyer, with respect to
surveying, termite inspection, repairs, proof of title,
expenses, taxes, inspection repair and maintenance and risk
of loss. The contract also sets forth the closing procedures
and the requirements for escrow and the duties and
obligations for failure to perform.
Once signed, the Florida contract for sale and purchase
is binding upon both seller and buyer. The seller is not
allowed to sell the property to someone else while the
contract is in force.
Before signing the purchase agreement, you should
discuss with your lawyer questions such as:
(1) What land and buildings and furnishings are
included in the contract. For example, are the stove,
refrigerator, automatic dishwasher, drapes and carpet
included?
(2) Who pays for examination of the title and the
inspections?
(3) Have all utilities been installed? Who pays for
the deposits on the utilities?
(4) Who pays for the surveyor? Who is responsible for
obtaining the surveyor?
(5) If a mortgage is to be given, who will pay the tax
on the mortgage and the other costs of the closing?
(6) If a loan is to be obtained from a lender, who will
pay the cost of obtaining the loan?
(7) Who will pay the cost to repair if there is termite

4. damage?
(8) What are the zoning regulations or restrictions on
the use of the property?
(9) What are the remedies if the buyer or the seller
defaults?
(10) Should the purchase be contingent on any other
matters, such as, the sale of your current home?
These are questions that you and your lawyer should
answer before signing the contract.
TAKING TITLE TO PROPERTY
In Florida, a standard warranty deed is the general
means of conveyance of title. The usual guaranties or
warranties by the seller are good title and freedom from
encumbrance is against all other persons. A deed is not a
substitute for title examination. Generally speaking, quit-
claim deeds, special warranty deeds and agreements for deeds
should be avoided. Attorneys are authorized to do title
transfers and may be title agents. Your attorney should be a
title agent with a well known title insurance company.
CONVEYANCING
Most conveyancing in Florida is done through what is
called a title company. Under Florida law, a title company
examines the public records to insure that the seller owns
the property. Once the examinations are made, the title
company will issue a commitment which is its agreement to
insure the property against all others who may make a claim
to it with the exceptions stated in the title policy.
Some lawyers are also title insurance agents and can
examine the abstract or can do a title examination to ensure
that the seller owns the property as claimed so that a title
policy can be issued. South Milhausen has a title company,
Alliance Title, which does both residential and commercial
closings.
Your lawyer, representing your interest, can advise the
extent of protection given to you by your owner's policy.
There is usually a separate charge for a title insurance
policy.
COST DISCLOSURE
U.S. law allows the buyer to request a disclosure of all
costs of purchasing a house or real property. You can obtain
this from the real estate broker at the time that he prepares
the contract for the sale and purchase. Sample costs include
attorneys fees, required escrow account balances, hazard
insurance, recertification of abstract survey expense, title
insurance, the transfer fee on existing mortgages, appraisal
fees, termite inspections fees, credit report fees,
documentary stamps on a promissory note, intangible tax on

5. new mortgage, attorneys fees from the mortgage company, pre-
payment of taxes and insurance for an escrow account, service
fees and recording fees. Who pays the types of fees is
negotiable.
JOINT OWNERSHIPS
Florida allows buyers to purchase property in joint
ownership. When a husband and wife buys together this is
known as a joint tenancy by the entireties. You and your
lawyer should determine the income, gift and death tax
consequences before having your home placed in joint
ownership. If joint ownership is held other than as husband
and wife, it becomes a tenancy in common which may have other
complicating legal concerns.
PURCHASING A HOME UNDER CONSTRUCTION
If you are buying a home which is under construction, or
has been completed recently, special care should be taken to
be sure that all the costs of construction have been paid by
the sellers and that you are protected. Florida has a law
which protects those who have not been paid in the
construction of homes. Failure to comply with the law could
result in paying twice for the house! You should consult
your lawyer for full information as to your rights and
responsibilities under this law.
If you are entering into an agreement to construct the
house, this will be a totally different contract than a
contract to purchase an existing home. Again, you will need
to see your attorney to be sure that the contract is properly
prepared.
FINANCING YOUR HOME
Many financing arrangements are available to nonresident
aliens in Florida. Generally, a deposit of approximately 30%
will enable the nonresident alien to purchase homes in
Florida and to obtain a mortgage and financing. Your
attorney can help you determine the most advantageous plan
and types of financing based on your needs and your
capabilities to repay. Your attorney can also discuss with
you certain tax advantages appropriate to your personal
financial situation.
Regardless of the type of mortgage you obtain, you
should be aware of prepayment penalties, the limitation of
your right to sell without the lender's consent, the required
maintenance of insurance for the mortgage company, tax and
insurance escrow payments required, collateral rights to
borrow from another source, limitations on the use of your
property, and your lender's right to change interest rates if
you assume an existing mortgage or if you obtain an
adjustable rate mortgage.

6. CLOSING YOUR PURCHASE
Closing a real estate sale is a technical and complex
operation which requires careful and detailed preparation.
As a careful buyer, you should insist that your lawyer
conduct the closing or be present at the closing, checking
each and every detail. He or she knows which points are
significant in making the purchase so that you will have a
trouble-free ownership to which you are entitled.
PURCHASING THE CONDOMINIUM
A condominium is a special legal concept allowed by the
State of Florida that enables a group of persons to
individually own a house or an apartment or flat outright
while owning the land upon which the homes or apartments are
built in common as a group. The expenses associated with
common ownership are shared on a prorated basis. Usually the
land and all the common facilities in the condominium, such
as swimming pools, tennis courts, lobby's, plumbing and
wiring are owned and operated by the owners through their
condominium association. The joint ownership and operation
means that no individual owner has control over common areas.
When you are purchasing a condominium, Florida law
requires that you be given various documents called a
disclosure statement or prospectus before you are obligated
to purchase.
Florida law also provides for a cooling off period.
Before purchasing your condominium you should know
whether you can rent it out on a short-term basis which is
usually any period less than six months. You should also
determine if the condominium restricts the number of visitors
or pets you may have and other types of furnishings you are
allowed in your apartment. You should also determine if
there are any other mandatory membership fees and maintenance
fees or other restrictions on use or ownership.
South Milhausen also has lawyers involved in condominium law
and community association(homeowners associations)law to help
you in buying your condominium.
PURCHASING A TIME SHARE OR INTERVAL OWNERSHIP
Purchasing a time share or interval ownership can also
be a rewarding experience or one fraught with perils. Even
though the amount of money generally spent for a time sere or
interval is substantially less, if does have many legal
pitfalls of which you should be aware. Again, your attorney
can advise you of your legal rights when purchasing a time
share or interval ownership in Florida, including your rights
to have disclosure statements, and other documents provided
to you as required by law, as well as advising you of your
legal obligations if you default in your payments and your

7. legal rights to resell the same.
FLORIDA PROPERTY TAX CONSIDERATIONS
All land and buildings in Florida are generally taxed on
an annual basis. This type of tax is called an ad valorem
tax. The tax statements are generally sent out on November 1
of each year. The tax is computed as a rate based n the
value of the property on the preceding January 1. The tax
bill for the prior year is generally disclosed prior to or at
the time of closing.
Florida does not have a personal income tax as many
other states do, but does have a corporation income tax.
A nonresident who owns and leases real estate in the
U.S. is subject to U.S. taxes and normally is a calendar year
tax payor. Nonresident aliens who sell their properties in
Florida will be subject to tax on their profits. United
States tax laws requires that the person who purchases from a
nonresident alien withhold 10% of the gross sales tax and
submit it to the Internal Revenue Service unless a smaller
amount is showed to be due. Nonresident aliens are not
permitted to file a joint tax declaration and must file
separate income tax returns.
Florida has also a tangible personal property tax on
tangible property, which is used in the rental home or used
in the business.
If you engage in short-term rentals of your Florida
properties, you may be required to register the same with the
State of Florida and to collect sales, use and tourist
development taxes. You should consult your attorney before
deciding to purchase a property for use as a short-term
rental.
Estate taxes are assessed against nonresident aliens who
live in the State. Careful estate and tax planning is
usually required before deciding to purchase or reside in
Florida. Again, your U.S. attorney should work carefully
with your English solicitor for pre-residency estate and tax
planning.
There is, however, a tax treaty between the United
States and the United Kingdom which was designed for the
purpose of avoiding double taxation. The Treaty sets out
various rules to determine in which country the individual is
considered domiciled so as to avoid double estate taxes.
There are complicated legal rules for making these
determinations. Planning for investments in Florida should
be done between your U.S. lawyer and your U.K. solicitor.
There are ways, however, in which ownership can be put in
various off-shore trusts to avoid necessary taxes. Again,

8. discuss this with your solicitor and your U.S. lawyer and
your U.S. and British accountant.
BENEFITS OF FLORIDA RESIDENCY
An individual may qualify as a resident of Florida
without obtaining U.S. citizenship. An appropriate U.S. visa
is required for this. Once the appropriate visa category
status is obtained, an international resident can file a
declaration of domicile. Florida residents have a number of
advantages and benefits given to them by law, including
preference in state or county employment, a $25,000 homestead
exemption in calculating an assessment for ad valorem taxes,
free education through the 12th grade, lower tuition at State
universities for children, qualification for various fishing
and hunting licenses and no personal State income tax, and
generally speaking, no estate and probate tax.
Buying property from abroad is a long-standing tradition
in the U.S. The U.S. encourages foreign ownership and does
not prohibit foreign currency exchanges. The British pound
sterling still remains very strong against the U.S. dollar.
Many buyers have been highly successful in it. But there are
pitfalls and there can be problems. By abiding by the above
rules, you will go a long way toward ensuring that your
Florida property purchase is prudent and profitable.
Mr. Lavigne is a partner with the Florida based law firm
of South Milhausen, P.A. The firm has represented many
British buyers of Florida homes and businesses. The firm is
a full-service law firm handling all aspects of international
business, property law, business law, foreign investments,
tax law, contract law, probate, estates, trusts, company law
and immigration law. The firm issues title policies through
its company, Alliance Title. One of Mr. LaVigne’s areas of
specialization has been in the area of compliance with U.S.
immigration laws for those who want to live and work in the
U.S. The firm is a long-standing established member of the
Orlando business and legal community.

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