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New Law Welcome Change for Brokers and CRE Lease Holders

Monday, October 12, 2020 4:56 PM | Anonymous

To all landlords with interest in Florida real estate, a small but very welcome change in real estate conveyances becomes law on July 1, 2020. After June 30, 2020, it is no longer required to have witnesses join in a real property lease – whether commercial or residential – for it to be valid.

The new law took effect this summer that eliminates a previous requirement that commercial and residential leases be signed by an “in-person” witness. As more and more transactions occur digitally — pandemic or no — the requirement that someone sign a document personally has become increasingly antiquated, explains Paul P. Partyka, 2020 President of the Central Florida Commercial Association of Realtors.

“In the post COVID-19 world, this will streamline the process. Regardless of the pandemic, this just makes good business sense, period,” shares Partyka, CCIM, MICP, President of The Partyka Group, Inc. at NAI Realvest in Orlando.

Florida House Bill 469 (HB 469), filed on Oct. 28, 2019, and co-sponsored by Reps. Juan Alfonso Fernandez-Barquin and Wyman Duggan, received unanimous support in both the House and the Senate, with a 117-0 vote in the House and 40-0 vote in the Senate.

Florida Gov. Ron DeSantis signed HB 469 on June 27, 2020. A change welcomed by Florida landlords; it removes the requirement under Section 689.01 of the Florida Statutes that a landlord must have two witnesses when signing a lease for a term of more than one year. HB 469 provides that no subscribing witnesses are required for a lease of real property, eliminating the requirement that two subscribing witnesses be present when the lessor signs a lease with a term of more than one year.

Until House Bill 469 took effect on July 1, Florida was one of just seven states that continued to require such in-person witnesses to leases.

It has long been a question of landlords to their lawyers over the years if witnesses are really necessary when a lease is executed. Because Florida now allows electronic signatures on leases, the burden of having a lease witnessed had become even a larger problem, adding many hours of delay in securing a lease commencement date to make sure the required number of witnesses are available at the same time as both the landlord and tenant to execute the lease. The new law will save landlords a considerable amount of time because now a lease needs just two parties signing it instead of up to six (the landlord, tenant and two witnesses for each side).

The statewide chapter of NAIOP, formerly the National Association of Industrial and Office Parks; Florida Realtors, Central Florida Commercial Association of Realtors, the Florida Apartment Association and the Florida Bar’s Real Property, Probate and Trust Law section all endorsed the change, which was first introduced into the Florida Legislature in 2019.

Electronic signatures, or “e-signatures,” have been allowed on purchase contracts for commercial and residential property sales for many years, Partyka adds.

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