Florida’s New Real Estate Laws for 2025
Big changes are coming to Florida’s real estate laws in 2025. Understanding these updates can help you manage your estate more effectively and take informed steps for a seamless transfer of assets. The new amendments introduce updates that can affect property owners, investors, and real estate lawyers. This article explores the most significant changes and how to navigate them effectively.
Overview of the Changing Real Estate Landscape in Florida
Florida’s real estate market has grown significantly over the past five years. Previously, the state saw a rapid increase in home prices that greatly favored the property sellers. However, this trend will change in 2025. This year, there are more houses for sale, and inventory levels have increased greatly. Sellers will have more choices for buyers and may reduce the property rates to attract more buyers.
Mortgage rates in 2025 are also showing signs of stability. These trends can enhance the buyer’s activity and lead to a more balanced environment for both sellers and buyers. Moreover, investors may see more opportunities in the real estate market if the prices drop further.
Key Changes in Florida Real Estate Laws 2025
Florida’s real estate laws bring significant changes in 2025. The new property regulations in 2025 have set clear housing safety guidelines. Lawmakers have proposed amendments to condo and homeowner association laws. Moreover, bills passed in the latter half of previous years have amended zoning and land use regulations, real estate contracts, and landlord-tenant laws.
Florida Condo Law Changes 2025
Florida Building Safety Laws in 2025 require mandatory milestone structural inspections for condominiums three stories or taller. Buildings 25 years or older within three miles of the coastline and 30 years or older further inland must undergo these inspections. Follow-up inspections are required every 10 years. Licensed engineers or architects will examine crucial structural elements to ensure safety and stability. The buildings should also maintain fire protection systems for added security.
The inspections cover key components such as foundations, balconies, and load-bearing walls. The changes require the submission of reports to local authorities and their sharing with residents. Florida Senate Bill 4-D outlines the inspection requirements and sets clear guidelines and timelines for complying with the new laws. Moreover, associations must conduct reserve studies every 10 years and maintain fully funded reserves based on the results.
Reforms in Homeowners Association (HOA) Laws
Under Florida HOA law updates 2025, HOAs with 100 or more parcels must maintain a website for key association records. These records include articles of incorporation, CC&Rs, bylaws, rules, and insurance policies. This homeowners associations’ requirement aligns with similar obligations previously imposed on condominium associations and is proposed in House Bill 1203. The Bill explicitly aligns HOA standards with condominium association requirements. This ensures consistent governance across all housing types.
Florida Real Estate Disclosure Laws 2025
House Bill 1049, effective October 1, 2024, created Section 689.302 in the Florida legislature. This section requires sellers of residential properties to provide a Flood Disclosure form before signing a contract. The form informs buyers that standard homeowners insurance does not cover flood damage and recommends purchasing separate flood insurance.
Sellers must also disclose any past flood claims or federal assistance received, such as payments from FEMA or the National Flood Insurance Program (NFIP). This information helps buyers evaluate risks associated with the building’s structure and financial matters, which can affect property value and insurance costs.
2025 Florida Zoning Law Changes
Section 166.04151 (7) of the Florida Statutes introduces amendments to the Live Local Act and contributes to the new 2025 Florida affordable housing laws. The Amended Live Local Act requires local governments to approve multifamily or mixed-use projects if at least 40% of the units are affordable. This applies to people earning up to 120% of the area median income and requires maintaining affordability for 30 years. People can build these projects in mixed-use, commercial, or industrial zones.
Under 2025 Florida land use regulations, there are no limits on floor area ratio (FAR), building height, or density, providing greater land use flexibility. Local governments must also allow at least 150% of the highest permitted FAR and a minimum building height of three stories. For qualifying developments near major transportation hubs, parking requirements must be reduced by at least 20%. However, stricter approval rules apply to projects near military installations.
Amendments to Florida Landlord-Tenant Laws
2025 Florida landlord-tenant laws introduce reusable tenants’ screening reports by passing House Bill 43. This amendment allows landlords to accept these reports and must include a required statement. The reports must contain specific information. Moreover, landlords cannot charge certain fees to applicants who use them. The law is still under review and will take effect on July 1, 2025.
Florida Real Estate Contract Laws 2025
The updated Florida real estate contracts for 2025 took effect on December 31, 2024. They bring essential changes to the “AS IS” Residential Contract and the Residential Contract for Sale and Purchase. Under Section 9, buyers and sellers must now pay closing service costs. Before, the person choosing the service paid all the expenses.
Section 15(a) removes the automatic deposit splitting rule. Instead, payment depends on specific agreements. Realtors should check these agreements to avoid issues if a deal falls through. Section 19 adds two new addenda. These cover how buyer-broker compensation works and allow contingent offers. Under these new rules, payment terms can change or transfer to sellers.
Adoption of the Florida Uniform Fiduciary Income and Principal Act (FUFIPA)
The Florida Uniform Fiduciary Income and Principal Act (FUFIPA), effective on January 1, 2025, constitutes the revised chapter 738 of the Florida Statutes. The new act updates the rules for managing estates, trusts, legal life estates, and similar arrangements. Although the 2018 Uniform Fiduciary Income and Principal Act (UFIPA) strengthens the new act, it brings more consistency to trust management. Key provisions included are as follows.
Power to Adjust Income and Principal Allocation
The fiduciary’s power to adjust allows a disinterested trustee to shift funds between income and principal to balance beneficiary interests. Under the 2002 Act, fiduciaries could only use this power if they were otherwise unable to comply with their responsibility of impartiality. They had to evaluate nine statutory factors before making adjustments, which often limited their use of the power.
The Uniform Fiduciary Income and Principal Act (UFIPA), as outlined in Fla. Stat. § 738.203, 2024, removed these limitations. It replaced the impossibility standard with a more flexible assistance standard. This allows adjustments without a court order. However, adjustments that could cause adverse tax consequences remain prohibited. These include losing the marital deduction, unitrust treatment, or generation-skipping transfer tax exemption.
Flexibility in Managing Longer-Term Trusts
Under Florida Law, the duration of private trusts created on or after July 1, 2022, is extended to 1,000 years. This allows the trusts to last for generations. However, trust purposes, asset mixes, and tax profiles can change significantly over such a prolonged duration. UFIPA helps trustees adjust to changes to meet the evolving needs of beneficiaries.
UFIPA also allows fiduciaries to manage principle and income distributions more cautiously. Modern trusts often allow fiduciaries to decide how much to distribute to different beneficiaries, unlike older trusts that require mandatory income distributions. The act reduces the strict distinctions between principal and income beneficiaries. It makes it easier for fiduciaries to distribute resources wisely. These changes help balance the growth of the trust’s assets over time while meeting the current needs of beneficiaries.
Unitrusts in FUFIPA
Florida introduced unitrusts in 2002 under FPIA, Fla. Stat. § 738.1041. This allowed income trusts to convert into unitrusts and treat unitrust amounts as income for distribution. The structure calculates income using a fixed percentage of the trust’s asset value. It is typically 3-5% based on Fla. Stat. § 738.306 and falls within a federal tax safe harbor. This rate can change. However, it may lead to risks like gains on appreciated assets or loss of GST tax exemptions.
In 2024, FIPA reorganized these laws under §§ 738.301-738.310 to align with the 2018 Uniform Act. FIPA introduces more transparent and flexible rules. For instance, trustees can convert trusts without court approval for a simpler administration process. New regulations also clarify tax-ordering sequences and prioritize ordinary income over capital gains.
Receipts and Disbursements
Fla. Stat. § 738.401 explains how to divide money received from entities into income and principal. Cash distributions from entities are considered income. An exception is when they come from non-operational events like redemptions, which the law treats as principal. The limit for capital distributions is 20% of the entity’s gross assets. Income allocation includes a 3% cumulative return or flow-through income taxes. This uses a 3-year lookback period for increased transparency.
Additionally, disbursement rules cover situations where income cannot cover expenses. This allows reimbursements between income and principal. A new provision ensures that tax reimbursements for grantor trusts follow the Florida Statute §736.08145.
Amendments to the Probate Rules in Florida Real Estate Laws 2025
In 2024, the Florida Bar’s Probate Rules Committee proposed amendments to Rules 5.095, 5.320, 5.550, and 5.697. However, after receiving feedback, the committee withdrew the filing for revisions for rules 5.095 and 5.697. The proposed changes are intended to align the regulations with Florida Rule of Civil Procedure 1.490. As a result, the Florida Supreme Court approved only the changes to rules 5.320 and 5.550.
Specific Amendments to Florida Probate Rules
The revised probate rules 5.320 and 5.550 became effective on January 1st, 2025. Here is a look at the original proposed changes to these two Florida probate rules.
- Rule 5.320 – Oath of Personal Representative:
The amendment introduced separate oath requirements for individuals and entities. The changes required entities to confirm their qualifications under section 733.305 of Florida Statutes. Individuals must be aware of their statutory qualifications and duty to report any events that may cause disqualification.
- Rule 5.550 – Petition to Determine the Incapacity:
The amendment aligns the rule with Fla. Stat. § 744.331(1). It ensures that the court-appointed official must read the notice and the petition to the incapacitated person. It also added rules about how to serve the notices and the role of the examining committee.
Implications for Estate Planning and Administration in Florida Real Estate Laws 2025
Estate Planning involves preparation for the management and distribution of assets after death or incapacity. It includes creating wills and trusts as well as the powers of attorney. The key to effective planning lies in reducing taxes and fulfilling the deceased person’s wishes in the will.
The updated Florida real estate laws in 2025 affect estate planning documents and may require updates. For instance, wills and trusts should reflect the new income and principle allocation guidelines. Moreover, the flexible guidelines for fiduciaries may require updates for long-term trusts. Revisiting the estate planning documents will protect beneficiary rights and avoid future probate complications.
Professional Help to Effectively Navigate the Florida Real Estate Laws in 2025
The amended real estate laws and probate rules demand careful planning for a smooth estate administration. With legal assistance from estate planning professionals, you can apply the updated requirements to your estate planning documents. These legal experts can help with following the law and avoid future disputes in the estate administration.
Legal help can also help you make timely updates to your estate plans to avoid challenges with outdated provisions. Moreover, personal representatives can better understand their responsibilities under the new reporting and transparency standards.
Florida’s New Real Estate Laws 2025 FAQs
Key Takeaways From the 2025 Real Estate Laws in Florida
Florida real estate laws in 2025 will significantly change for property owners, tenants, and real estate professionals. Some of the significant legal updates include more strict safety inspections of the building, revised zoning laws, and the adoption of the Uniform Fiduciary Income and Principal Act. Understanding these regulations can help make an informed decision. You can manage your estate more effectively and prepare for a smooth transfer to the rightful beneficiaries.
