Indemnification Clauses in Florida Real Estate
Indemnification clauses in Florida real estate contracts allocate risk between buyer and seller for liabilities arising from the property before, during, and after closing. These clauses are among the most heavily negotiated provisions in commercial real estate transactions.
Common Indemnification Allocations
- Seller indemnifies buyer for: Pre-closing environmental contamination, undisclosed property defects, unpaid contractor or materialman liens, pre-closing tax liabilities, and false representations about property condition
- Buyer indemnifies seller for: Post-closing liabilities arising from buyer’s ownership and operation, and claims arising from buyer’s inspections during due diligence
Key Negotiation Points
- Covered losses: Should include attorney fees, remediation costs, and consequential damages
- Representations and warranties: Specific seller statements about property condition that trigger indemnification if false
- Survival period: 12-24 months for general representations; 3-5 years for environmental and title
- Escrow holdback: Portion of purchase price retained to secure seller’s obligations
- Liability caps: Maximum aggregate amount the seller must pay
- Baskets and deductibles: Minimum loss threshold before indemnification applies
Survival After Closing
Under Florida’s merger doctrine, contract provisions fully performed at closing cease to exist unless the contract expressly provides for survival. Without a survival clause, the buyer may lose the ability to make indemnification claims for pre-closing issues discovered after closing. Always include express survival language.
Related Terms
- Indemnification — General indemnification law
- Closing — Transaction completion
- Due Diligence — Pre-purchase investigation
- Representations and Warranties — Seller statements triggering indemnification
Barnes Walker Real Estate Transactions
Barnes Walker’s real estate attorneys negotiate indemnification provisions for property acquisitions, dispositions, and commercial leases throughout Southwest Florida. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC