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Understanding a Florida kick-out clause

On Behalf of | Jul 19, 2023 | Tampa Real Estate Attorney

A home for sale in Florida might contain a kick-out clause in its real estate contract. The clause is for when a potential buyer makes an offer, but that offer is dependent on something else. With a kick-out clause, the seller can continue showing the home and accept a better offer should it arise.

Why include a kick-out clause?

A kick-out clause can possibly help avoid real estate contract disputes. Without the clause, a seller has to meet the contingent demands of the potential buyer. The seller could find themselves back at square one if the buyer backs out of the deal.

If a seller accepts a contingent offer without a kick-out clause, the seller must remove the home from the market. Although the buyer hasn’t officially made the purchase, the seller can no longer consider other offers.

The kick-out clause is an effort to make things better for the seller. Although there’s a contingent offer, the home remains on the market. The seller is free to consider non-contingent offers from other people. But this is only possible if a kick-out clause is in the contract.

How does the clause work?

The seller must notify the original buyer of the new non-contingent offer. The original buyer can amend their offer and make the purchase or cancel the deal. If the original buyer cancels the deal, their deposit is returned and it is officially done. The seller can now move on with the new buyer.

A kick-out clause must benefit the seller and the buyer. For example, a buyer is unlikely to accept a clause that says the seller can kick them out for wanting to inspect or appraise the home.