USA - FLORIDA Law and Practice Contributed by: Jeffrey R Margolis, Marc S Shuster, James L Berger and Evan Rosenberg, Berger Singerman LLP
eral types of deeds are used to transfer title, with the most common being a special warranty deed in which the transferor warrants title to the prop - erty from the time the transferor acquired title. 2.4 Real Estate Due Diligence Due diligence can be divided into various com - ponents, including site information, site con - straints, governmental approvals, development rights, and property condition. Clients are doing more of their own due diligence as opposed to outsourcing to third parties. 2.5 Typical Representations and Warranties Typical Representations and Warranties Requested of the Seller – Knowledge Qualifier A buyer will typically require the seller of real property to provide certain representations and warranties. To the extent that a seller will agree to property-related representations, the seller will typically limit representations concerning the operations, finances and property condition by
gate before a post-closing claim for breach of a representation or warranty may be raised by the buyer; • a maximum liability amount, which is typi - cally a maximum dollar amount of the seller’s liability for the breach of the representations and warranties of the seller; and • a time period for the survival of the repre - sentations and warranties given by the seller under the purchase and sale agreement. 2.6 Important Areas of Law for Investors Foreign investors must pay attention to the tax implications of the underlying structure, as well as the investment vehicle involved. With respect to tax matters, the form and tax classification of the legal entity(ies) within the ownership and organisational structure for the real property has a significant impact on US federal income tax and any applicable state income tax on operat - ing income and sales proceeds. There is also an impact on the federal and any applicable state transfer tax (eg, gift tax or estate tax) on the transfer of interests in the property during lifetime and/or at death. 2.7 Soil Pollution or Environmental Contamination The owner of real property in Florida is liable for soil pollution or environmental contamination regardless of whether such contamination has been caused by that owner. These laws relate to the protection of human health or the environ - ment, hazardous substances, and/or liability for or costs of other actual or threatened danger to human health or the environment. Some of the pertinent laws include the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Emergency Planning and Community Right-to-Know Act, and the Hazardous Substances Transportation Act, to name a few.
this type of knowledge-qualifier. Remedies of Buyer for Breach of Representations and Warranties
Subject to the terms of the purchase agreement, a buyer may bring an action for damages for the breach of a representation and warranty set forth
in the purchase and sale agreement. Limitations for Seller’s Breach of Representation and Warranty
Typically, counsel for the seller of commercial real property will negotiate three limitations to the seller’s liability arising from a breach of rep - resentations and warranties: • a basket amount, which is typically a dollar amount of claims that must exist in the aggre -
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