Learn the Florida Contract for Sale and Purchase
Avoid this Sections at All Costs if You Can!!! But well....you can't forever
⚖️ Section 16 – Dispute Resolution: The Contract Fight Club
This is where things go when deals break down and everyone starts lawyering up.
Section 16 sets the rules for what happens if there’s a fight about:
Who gets the deposit
Whether someone breached the contract
Or whether the broker’s about to get sued
It breaks down into three parts—and each one matters more than most agents realize.
💰 (a) Deposit Disputes
If both sides claim the deposit—or one won’t release it—here’s what happens:
The buyer and seller have 30 days to work it out through mediation
If they can’t? The Escrow Agent decides what happens next
That could mean:Filing interpleader
Going to court
Going to arbitration
Or filing with FREC (if a broker’s holding funds)
Key point: If the escrow is held by a title company or attorney, they are not subject to FREC rules. Brokers are. Don’t confuse the two.
🥊 (b) Everything Else: Mediation First, Then Arbitration
Dispute about contract breach, inspection games, financing games, or anything beyond deposits?
Everyone—including the broker—has 30 days to mediate
If that fails, it goes to binding arbitration in the county where the property is located
BUT: A broker is only dragged into arbitration if they agree in writing
No court. No jury. No drama. Just a neutral arbitrator deciding your fate.
Oh—and the arbitrator:
Can’t make up new rules
Can’t give remedies that aren’t allowed in the contract
Must base the ruling on the actual weight of evidence
Will write out findings of fact and cite the contract terms it’s based on
That ruling is binding. No appeal. No do-over.
💸 (c) Who Pays?
Mediation: Everyone splits the mediator’s fee
Arbitration: Each side pays their own legal costs and splits the arbitrator’s fee
So if you want to make a $10,000 claim for a bad repair—and spend $7,500 to do it—just be aware: you’re on your own financially.
🧠 Strategy Perspective
This isn’t just about knowing the rules. It’s about managing expectations before it ever gets here.
Agents should not promise “we’ll get your deposit back” unless they’re ready to back that up with arbitration.
Make sure your escrow holder is capable and willing to file interpleader if it comes to that
Warn buyers: Filing arbitration isn’t cheap—especially when the claim is smaller than the legal fees to fight it
And remember: there is no automatic win. You either settle… or you fight by the contract’s rules. This clause survives closing—meaning you can still fight it out after the keys change hands.
👇 Common Pitfalls Agents Cause Here:
Promising a deposit will be refunded when the other side contests it
Forgetting that title companies are not subject to FREC
Not tracking the 30-day window for dispute resolution
Not explaining the costs of arbitration to their clients
Forgetting that this section binds the parties post-closing
Coming Up Next in This Series:
Section 17 – Escrow Agent Mechanics (And who really controls the cash)
Section 18 – Broker Liability (Spoiler: they’re not your legal safety net)
The Addendum Deep Dive — Assignability, “As Is,” Kick-Outs, Appraisal Riders, and more
This isn’t just boilerplate.
If you're in the deal trenches, Section 16 is your battleground map.
Know where the landmines are. Know when to mediate. And know when it's time to get legal muscle on the field.
And oh yes……don’t follow those folks on instagram with loose lips sinking ships……follow the rules, follow the contract, talk to your team’s retained attorney and keep your mouth closed. You do not negotiate for your client…you help them understand strategy and convey their thoughts based on your counsel and advice on strategy. When you hear an agent disclosing things they should not! no matter what you think….they are violating ethics all day long! Loose Lips sink ships.
