We often receive calls from buyers and sellers wanting to transfer their mobile home cooperative unit on just a “handshake deal”. Mobile home cooperatives consist of three pieces of property – the mobile home, the share in the cooperative association and a long-term leasehold interest in the lot on which the mobile sits.
In Florida, the leasehold interest is considered real property. Florida contract law requires that certain kinds of contracts be memorialized in a writing. One of those types of contracts is any contract for the transfer of an interest in real property. Before our office can complete any mobile home cooperative transfer, we must have a written contract setting forth the terms of the transaction between the buyer and seller. When it comes to Florida real property, the “handshake deal” is dead.
There are several options when it comes to preparation of the contract. If you have placed the property on the market with a realtor, the realtor will prepare the contract for you. Alternatively, if you do not have a realtor, our office can prepare the contract. Finally, the buyer and seller can prepare the contract themselves.
If the buyer and seller prepare the contract, at a minimum the contract should identify the buyer, the seller and the property (for a mobile home cooperative, this means listing all three pieces — the mobile home, the share and the lot), it should set forth the purchase price, the deposit amount and the closing date, it should explain who is to pay what closing costs and it should be signed and dated by all sellers and all buyers.
Although buyers and sellers can save money by preparing the contract themselves, it should be done with caution as sales contracts are legally binding documents. This means the parties are bound to the terms in the contract.
What happens, however, when certain terms are not addressed in a contract? For example, buyer and seller prepare a contract. The contract calls for buyer to give seller a $2,000.00 deposit upon signing the contract, which the buyer does. However, the contract does not specify what happens to the deposit should one of the parties back out. Seller then decides not to close and buyer demands the deposit back. Who is entitled to the deposit?
Since the contract is silent as to the return of the deposit, if the parties cannot come to an agreement, then if buyer wants his deposit back he or she may need to file a lawsuit to have a judge determine who is entitled to the deposit, the cost and legal fees of which could easily exceed the $2,000.00 deposit amount.