Enforceability Status
Daily closing penalty provisions in Florida new construction contracts are generally enforceable when structured as liquidated damages. Florida courts apply a reasonableness test, and per-diem amounts that reflect actual builder carrying costs are typically upheld. Florida's consumer protection statutes may provide recourse when penalty terms are not clearly disclosed.
Legal Analysis
Florida courts evaluate daily closing penalties under the state's well-developed liquidated damages framework. A per-diem charge is enforceable if the amount was a reasonable pre-estimate of damages at the time of contracting and actual damages would be difficult to calculate. Florida courts have consistently applied this two-part test in real estate disputes.
In new construction, builders typically justify per-diem closing penalties by citing carrying costs including property taxes, insurance, HOA dues, construction loan interest, and maintenance expenses incurred while the home sits unsold after completion. Florida courts have generally accepted these as legitimate cost categories for liquidated damages calculations.
The Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. Section 501.204) may provide relief when builders fail to clearly disclose per-diem penalty provisions during the sales process or when sales representatives make misleading statements about closing date flexibility. Buyers should document all representations made before contract execution.
Florida does not cap per-diem penalty amounts by statute. In practice, daily rates in Florida new construction contracts typically range from $100 to $250 per day. Buyers should examine whether the contract allows the builder to extend the closing date at will while simultaneously penalizing buyers for any buyer-side delay.
Relevant Florida Law
Prohibits unfair or deceptive acts in trade and commerce. Relevant when builders misrepresent or fail to disclose daily closing penalty provisions during the sales process.
Provides that liquidated damages are enforceable when reasonable in light of anticipated or actual harm. Per-diem closing penalties are evaluated under this standard.
Establishes building standards for residential construction. Relevant when closing delays result from code compliance issues or failed inspections attributable to the builder.
Builders in Florida Using This Clause
What Florida Buyers Should Know
- Review the per-diem rate against actual carrying costs. Ask the builder to itemize the costs that justify the daily penalty amount. Florida builders should be able to demonstrate that the per-diem rate reflects real expenses such as property taxes, insurance, and loan interest rather than an arbitrary profit-generating charge.
- Negotiate a grace period before penalties begin. Request that the contract include a grace period of 7 to 14 days after the scheduled closing date before per-diem charges begin accruing. Short delays caused by lender processing are common and a brief grace period can prevent unnecessary financial pressure.
- Confirm whether the penalty applies to builder-caused delays. Many Florida builder contracts impose penalties only on buyers while giving the builder broad discretion to extend the closing date. Request mutual accountability so that the builder is equally penalized for delays in completing construction or obtaining certificates of occupancy.
- Document all closing timeline communications. Keep written records of all communications from the builder regarding the expected closing date. If the builder repeatedly changes the target date, this documentation may be relevant to a defense against per-diem charges or a claim under the Florida Deceptive and Unfair Trade Practices Act.