WILLIAM J. DECKER AND MARY DECKER, APPELLANTS,
v.
STROM & STROM REALTORS, INC., A FLORIDA CORPORATION, AND THOMAS O. SISTRUNK AND PATRICIA H. SISTRUNK, APPELLEES
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Florida appellate court affirmed forfeiture of escrow deposit where buyers refused to close due to higher-than-anticipated mortgage payments, holding that the mortgage contingency clause in the local standard contract lacked interest rate specifications unlike the state bar standard form.
Buyers who refuse to close a real estate transaction due to higher mortgage payments than anticipated breach the contract and forfeit their escrow deposit when the mortgage contingency clause does not specify an interest rate cap.
[1] A buyer's refusal to close a residential real estate transaction due to higher mortgage payments than anticipated constitutes breach of contract where the mortgage contin…
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Join FLexlaw to unlock all legal intelligenceThe Deckers signed a contract to purchase a $300,000 home from the Sistrunks using a Sarasota Board of Realtors standard contract with a mortgage cont…
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ALTENBERND, Judge.
We reluctantly affirm the trial court’s judgment requiring Mr. and Mrs. Decker to forfeit their $28,900 escrow deposit in a residential real estate transaction. They signed a real estate contract to purchase a $300,000 home from the Sistrunks, but then refused to close when they learned that the mortgage payments would be higher than they had anticipated. We write only to observe that the mortgage contingency clause in the Sarasota Board of Realtors and Sarasota County Bar Association standard real estate contract is the source of this unfortunate result. Unlike the Florida Association of Realtors/Florida Bar Association standard contract, this contract does not specify the interest rate or other terms of the intended financing. See J. Richard Harris, Basic Agreement, Florida Real Property Sales Transactions § 3.53 (2d ed. 1994). The parties used a disclosed dual agent who eventually located financing at an interest rate that was significantly above the current market rate, but reasonable in light of the Deckers’ credit history. The trial court concluded that the Deckers breached this contract when they refused to close. If the parties had used the Florida Bar standard contract, the Deckers could have specified a maximum interest rate and avoided this litigation.
Affirmed.
THREADGILL, C.J., and DANAHY, J., concur.
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Waksman Enters., Inc. v. Or. Props., Inc., 862 So. 2d 35 (Fla. 2d DCA 2003)…able agreement that deposits paid by the buyer will be forfeited to the seller under specified circumstances. Indeed, such deposit forfeiture provisions are standard and customary in real estate contracts. See Decker v. Strom & Strom Realtors, Inc., 695 So. 2d 803, 803 (Fla. 2d DCA 1997) (affirming trial court order requiring buyers to forfeit their deposit in a residential real estate transaction where buyers breached contract by “refusing] to close when they learned that the mortgage payments would be highe…