Question 1

How is a kick-out clause structured in a Florida purchase contract?

Accepted Answer

Structure: the clause is inserted into the purchase agreement (typically in the addendum section or as a special condition). Key elements: the triggering event (the seller receives a bona fide offer from a third party that the seller wishes to accept), the notice requirement (the seller must provide written notice to the original buyer within a specified timeframe), the response period (the original buyer has 24-72 hours to respond), the buyer’s options (remove the contingency and proceed, or release the property), the consequences of removing the contingency (the buyer commits to close regardless of whether their home sells), and the consequences of release (the seller is free to accept the replacement offer and the original buyer’s earnest money is returned). The FAR/BAR "As Is" and standard contracts in Florida have specific addendum forms for kick-out clauses.

Question 2

What contingencies typically trigger a kick-out clause in Florida?

Accepted Answer

The most common contingency triggering a kick-out clause is the home-sale contingency (the buyer’s purchase depends on selling their current home). Other contingencies that may trigger kick-out clauses include: financing contingencies (the buyer needs to obtain a mortgage), inspection contingencies (the buyer has not completed their inspections), and appraisal contingencies (the property must appraise at or above the purchase price). Some sellers include kick-out clauses even without a specific contingency as a way to keep the property on the market. The kick-out clause should clearly identify which contingency or contingencies trigger the kick-out right.

Question 3

Can a Florida buyer negotiate around a kick-out clause?

Accepted Answer

Yes, through several strategies: offer a shorter contingency period (30 days instead of 60 for the home sale), offer a larger earnest money deposit (demonstrating financial commitment), provide evidence of financial ability to close without selling the current home (bank statements, pre-approval letters), offer a higher purchase price to compensate the seller for the risk, propose a "right of first refusal" instead of a kick-out (the buyer has the right to match any competing offer), or offer to remove the contingency within a specified period (regardless of whether the home sells). The strongest strategy is to reduce the seller’s risk by demonstrating the ability to close even if the contingency is not met.

Kick-Out Clause: in Purchase Contracts

Kick-Out Clauses in Florida Purchase Contracts

Clause Structure

Triggering Contingencies

Buyer Negotiation Strategies

Related Terms

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