florida assignment of contract form

Can a Buyer Assign or Transfer Rights in Florida Real Property to Third Person Before Closing?

by Larry Tolchinsky | Closings , Florida Law , Florida Real Estate , Real Estate Title | 1 comment

In Florida, the closing process normally begins with a written sales contract where a seller commits to sell his or her home and a buyer commits to buying the property. That document creates an equitable interest in the property for the buyer.

What some buyers and sellers may not realize is that after the parties sign the contract, the parties can change (most standard residential contracts for the sale and purchase of Florida real estate contain a provision related to the buyer’s right to assign the contract). Under Florida law, the buyer can legally transfer his or her rights in the pending sale to an independent third party.

Which means, the deal may go through with a buyer who is different from the one who signed the contract (the assignment provision in most standard contracts also contemplate whether or not the original buyer will be released from any liability under the contract).

Florida Condos Are Still a Popular Real Estate Purchase

Purchasers, Executors, Heirs and Assigns

For many years, it has been generally accepted in Florida law that a land sale contract can be assigned. Sometimes, this is easily determined because either the section for assignment is checked or the language of the contract identifies the buyer as the “ purchaser and/or assigns ” when describing the person who is buying the property. Either one of these options places a seller on notice that he or she may be seeing a different face at the closing table.

Other language that may be used in the sales contract: “ heirs, executors, or assigns .” This language is also notice to the seller that the buyer may opt to assign the deal before it closes. (See – Shirley v. Lake Butler Corp., 123 So. 2d 267  – These words, heirs, executors, or assigns, do not require the seller to approve the assignment in order to make the assignment effective.)

When Can’t a Sales Contract Be Assigned by the Buyer?

The key here is that the sales contract is not personal to the buyer under its terms or by its nature; if it is, then there can be no assignment by the purchaser.

As explained by the Florida Supreme Court, real estate buyers will be allowed to assign (sell) their contracts to someone else whenever they choose to do so — unless (1) there is language in the contract that prohibits it in that particular deal; (2) if the assignment would violate public policy in some way; or (3) if it would violate some state or federal law or statute.

One other possible limitation on assigning a real estate sales contract (assuming the contract is silent on the issue of it being assignable): it may not be assigned if the seller has agreed to sell to this particular buyer because of an explicit reliance upon that buyer’s personal credit to cover the transaction. Walton Land & Timber Co. v. Long, 135 Fla. 843, 185 So. 839 (1939).

What Are the Assignee’s Duties?

If the buyer enters into an assignment with a third party, the deal to sell the property as described in the original sales contract does not change. The buyer is subject to a legally enforceable agreement when he or she signs the sales contract to buy that home or condo.

If the buyer wants to transfer the contract to an assignee, that first contract is not changed insofar as the rights and duties of the original parties (unless the seller agrees, in writing, to allow the buyer to be released from liability).  The assignee needs to make sure that all the duties required by the buyer under the sales contract are performed in order to close the deal.

The assignee takes on the legal responsibility of tendering to the seller the purchase price at the time stated in the sales contract. He or she will need to perform as the buyer would have been required to perform under the agreement.

If the assignee doesn’t fulfill his or her duties, then the seller can argue that the sales contract has been breached (thereby allowing the seller to retain the buyers deposits and seek any other remedies set forth in the contract).

As long as the seller is ready, willing and able to provide the deed to the original buyer, the seller should win this argument.

What Are the Assignee’s Rights?

Once there is a legally binding assignment in place, the assignee has rights under the sales contract. However, the terms of the deal do not change just because there is an assignee involved now.

The assignee does not have any more rights than the buyer had at the get-go. The buyer cannot transfer something to the assignee that he or she didn’t have!

Furthermore, the assignee will be subject to the rights of the seller in the original sales contract. If the seller expects something to be done by the buyer in the contract, then the seller can legally expect that the assignee will perform that task.

If the seller has defenses against the buyer under the sales agreement, then those defenses will be able to be asserted against the assignee, too.

Bottom line, if a buyer and a third party decide to enter into their own agreement where the buyer assigns his interest in a pending sales contract to buy a home or condo in Florida to the third party, great. But that assignee will not stand in a more favorable legal position than the buyer just because he’s a third party who’s come into the deal under an assignment.

Note: that third party will also get the right to end the deal, if the buyer had a legal right to do so. As the assignee, if the buyer has a right to seek recession of that sales contract, then the third party assignee will as well. For instance, if the seller cannot provide clear legal title, then the assignee has a right to rescind the deal just as the original buyer could have done.

What Are the Seller’s Duties After the Buyer’s Assignment?

When a buyer assigns his rights to a third party, what does the seller have to do? Well, the seller is not usually a party to the assignment (unless the contract requires the seller to approve the assignment). The assignment is an agreement usually between the buyer (the ”assignor”) and a third party (the ”assignee”).

Accordingly, the seller has no responsibility to determine who the assignee is in order to close the deal. All the seller has to do is meet the terms of the sales agreement. It’s up to the buyer and his or her assignee to work out the details of getting to the closing table at the time and date set forth in the sales contract. See,  Pierce & Stevenson v. Jones, 109 Fla. 517, 147 So. 842, 88 A.L.R. 192 (1933).

Buyer Needs to Make Sure There’s an Effective Assignment

For some buyers who enter into an assignment the seller may allow the buyer to be free of the obligations set forth in the sales contract. If not, the buyer will remain responsible under the real estate contract to fulfill the obligations that he or she agreed upon at the time the contract was first signed.

Any release of the buyer’s obligations by the seller has to be specifically stated and in writing.

For example, if a buyer signs a real estate purchase agreement and inserts language that he or she will be taking title to the property in the name of his or her wholly owned corporation, that’s not creating any kind of assignment from the buyer to the corporation. That’s creating a condition in the sales contract, but it’s not an assignment by the buyer to a third party (it doesn’t relieve the buyer from liability under the contract).

The buyer needs to have something in writing stating that the seller is relieving the buyer of his or her obligations under the sales contract and the buyer’s wholly-owned corporation will be liable in order for there to be an effective release of liability of the buyer. See, Greater New York Corp. v. Cenvill Miami Beach Corp ., 620 So. 2d 1068 (Fla. 3d DCA 1993).

Having a Florida Real Estate Lawyer Can Help Your Residential Closing

Whether you are a seller, a buyer, or an assignee in a deal to sell a Florida home or condo, things can get complicated very fast and parties can end up confused and upset. Closings can be delayed. Some may never happen.

Having the advice of an experienced Florida real estate lawyer can be of great help here. Moreover, having an attorney review the situation before the deal is finalized at closing isn’t as expensive as some assume it to be.

See: 19 Reasons to Hire a Real Estate Lawyer When Buying or Selling Florida Real Estate

A good piece of advice if you are faced with an assignment issue, is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.  

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What is impossible to locate anywhere online is how you are legally able to market a property that you are trying to assign. I understand no MLS, but FB, Craiglist, Zillow, Signage? Help.

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Florida Realtors Updates FR/Bar Contracts and Riders

The AS IS contract, Residential contract and seven Riders were updated, and three new Riders were created. Members will have time to study the changes before it replaces current forms on Nov. 1.

ORLANDO, Fla. – Revisions to the Florida Realtors/Florida Bar Contract for Sale and Purchase (FR/Bar) – both the AS IS and the Residential – have recently been approved and contain numerous changes. In addition, seven Riders have been updated and three new Riders were created. The update gives members time familiarize themselves with the changes and goes into effect on Nov. 1, 2021.

New Residential Contracts — What You Need to Know

“Laws, technology practice and society change over time, and Florida Realtors® updates its forms every few years to respond to those changes,” says Juana Watkins, Florida Realtors vice president of law and policy and general counsel. “A great deal of time and energy went into these updates. The Realtor and attorney members of the Joint Statewide Realtor Attorney Committee dedicated hours and hours of their time, and they deserve our gratitude.”

Watkins says no contract can ever be perfect as long as the world keeps changing, but the FR/Bar contract has been tested over the years, and many of the new updates originated as suggestions from Realtor members.

Major FR/Bar updates

Paragraph 8, which addresses how the purchase will be paid for, contains many updates. Spend time familiarizing yourself with the changes, so that you  understand buyers’ and sellers’ responsibilities when the new contract goes into everyday use.

• 8(b) – Two tasks are to be completed during the “Loan Approval Period.” As before, the buyer must obtain  approval for financing as described in Paragraph 8b. New to the contract, however, is that the buyer’s lender must receive a satisfactory appraisal before the “Loan Approval Period” expires – the first time a FR/Bar contract specified this. (Note: The word “appraisal” includes appraisals and alternative valuations.) Why the change? The change was made to expedite receipt of the appraisal if required by the buyer’s lender. Under the current contract, a low appraisal could derail a transaction as late as the closing, if that’s when the appraisal was completed. Although a low appraisal can still derail a transaction, if it is received before expiration of the Loan Approval Period, the property can be returned to the market sooner and a new buyer found.
• 8(b)(i) – This subsection redefines “Loan Approval.” This term now includes two components: that a buyer is approved for the financing described in the contract, and that the lender received a satisfactory appraisal if one is required. Consequently, if a buyer is approved for financing but the approval is conditioned upon an appraisal to be completed in the future, this will not be considered “Loan Approval.” Unlike the current contract, per the revision, an approval that contains a condition that the buyer must sell another property is considered “Loan Approval,” providing Rider V is made part of the contract. Why the change? If the seller agrees to a buyer’s offer that includes Rider V, the seller is now aware that the buyer’s offer is contingent on the buyer selling another property.
• 18, Standard O – Delivery notice methods changed. In addition to current options – mail or personal delivery – notices may also be delivered by fax or email. However, certain electronic media delivery previously provided for in the contract was deleted. This is noteworthy because it means texts cannot be used to provide notice for these contracts. The change was made because texts can disappear over time, making them unreliable as evidence to prove that a notice was delivered.

Examples of other FR/Bar changes

“This article provides an overview of major forms changes but should not be considered a substitute for reading the new contracts and understanding how even small changes might impact some of your transactions,” says Watkins. “As always, Florida Realtors Legal Hotline is available as a free member benefit, and our staff lawyers will be happy to offer further education on the changes.”

• “Personal Property” now includes thermostats, doorbells, television wall mounts and television mounting hardware, mailbox keys, and storm protection items and hardware – and intercoms were deleted.
• A critical component of closing – that all funds required for closing are received by the closing agent and collected pursuant to STANDARD S” – has now been included in the paragraph that defines closing.  
• An extension of the closing date based on CFPB (Consumer Finance Protection Bureau) delivery requirements was reduced from up to 10 days to 7 days, and it was clarified that this extension is automatic only if the loan was approved and through underwriting prior to the originally agreed upon closing date.
• The occupancy clause now covers disclosure of existing seasonal or short-term vacation rentals – or if such rentals are intended if the occupancy would take place after closing.
• A buyer has an obligation to keep the seller informed of the status of a loan application, appraisal, loan approval and property-related conditions, if the seller requests this information in writing.
• The buyer can now wait until the end of the “Loan Approval Period” to inform the seller, in writing, that the loan was approved. In the current version, the buyer had to “promptly advise” the seller.
• One item was added to costs paid by the seller: FIRPTA withholding and reporting (FIRPTA applies to transactions with foreign sellers).
• Special assessments imposed by special districts will be prorated and not negotiated in Paragraph 9f.
• Watercraft lifts and related equipment are now items subject to the buyer’s inspection that should be in working condition (Residential Contract only); also, a change allows sellers to complete repairs without estimates if the seller desires.
• Time calculations: The new contract states that a calendar day will be based on where the property is located and clarifies calculations if a date or time period ends on a Saturday or Sunday, a day that is a national legal holiday, or on a day a national legal public holiday is observed.
• Force Majeure: The definition of Force Majeure has been expanded and now also includes “governmental actions and mandates, government shutdowns, epidemics or pandemics.”
• Counteroffer language was simplified and the rejection option eliminated.
• New riders include Mold Inspection, Seasonal/Vacation Rentals/Pace Disclosure.

The new contracts – including redline versions that show the changes – are posted on Florida Realtors’ website .

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Legal Templates

Home Business Assignment Agreement

Assignment Agreement Template

Use our assignment agreement to transfer contractual obligations.

Updated February 1, 2024 Reviewed by Brooke Davis

An assignment agreement is a legal document that transfers rights, responsibilities, and benefits from one party (the “assignor”) to another (the “assignee”). You can use it to reassign debt, real estate, intellectual property, leases, insurance policies, and government contracts.

What Is an Assignment Agreement?

What to include in an assignment agreement, how to assign a contract, how to write an assignment agreement, assignment agreement sample.

Partnership Interest

An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits.

It’s often a requirement to let the other party in the original deal know the contract is being transferred. It’s essential to create this form thoughtfully, as a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.

The most common use of an assignment agreement occurs when the assignor no longer can or wants to continue with a contract. Instead of leaving the initial party or breaking the agreement, the assignor can transfer the contract to another individual or entity.

For example, imagine a small residential trash collection service plans to close its operations. Before it closes, the business brokers a deal to send its accounts to a curbside pickup company providing similar services. After notifying account holders, the latter company continues the service while receiving payment.

Create a thorough assignment agreement by including the following information:

• Effective Date:  The document must indicate when the transfer of rights and obligations occurs.
• Parties:  Include the full name and address of the assignor, assignee, and obligor (if required).
• Assignment:  Provide details that identify the original contract being assigned.
• Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
• Signatures:  Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.

Review the Contract Terms

Carefully review the terms of the existing contract. Some contracts may have specific provisions regarding assignment. Check for any restrictions or requirements related to assigning the contract.

Check for Anti-Assignment Clauses

Some contracts include anti-assignment clauses that prohibit or restrict the ability to assign the contract without the consent of the other party. If there’s such a clause, you may need the consent of the original parties to proceed.

Determine Assignability

Ensure that the contract is assignable. Some contracts, especially those involving personal services or unique skills, may not be assignable without the other party’s agreement.

Get Consent from the Other Party (if Required)

If the contract includes an anti-assignment clause or requires consent for assignment, seek written consent from the other party. This can often be done through a formal amendment to the contract.

Prepare an Assignment Agreement

Draft an assignment agreement that clearly outlines the transfer of rights and obligations from the assignor (the party assigning the contract) to the assignee (the party receiving the assignment). Include details such as the names of the parties, the effective date of the assignment, and the specific rights and obligations being transferred.

Include Original Contract Information

Attach a copy of the original contract or reference its key terms in the assignment agreement. This helps in clearly identifying the contract being assigned.

Execution of the Assignment Agreement

Both the assignor and assignee should sign the assignment agreement. Signatures should be notarized if required by the contract or local laws.

Notice to the Other Party

Provide notice of the assignment to the non-assigning party. This can be done formally through a letter or as specified in the contract.

File the Assignment

File the assignment agreement with the appropriate parties or entities as required. This may include filing with the original contracting party or relevant government authorities.

Communicate with Third Parties

Inform any relevant third parties, such as suppliers, customers, or service providers, about the assignment to ensure a smooth transition.

Keep Copies for Records

Keep copies of the assignment agreement, original contract, and any related communications for your records.

Here’s a list of steps on how to write an assignment agreement:

Step 1 – List the Assignor’s and Assignee’s Details

List all of the pertinent information regarding the parties involved in the transfer. This information includes their full names, addresses, phone numbers, and other relevant contact information.

This step clarifies who’s transferring the initial contract and who will take on its responsibilities.

Step 2 – Provide Original Contract Information

Describing and identifying the contract that is effectively being reassigned is essential. This step avoids any confusion after the transfer has been completed.

Step 3 – State the Consideration

Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the assignee will pay the consideration over a period, indicate the method and installments.

Step 4 – Provide Any Terms and Conditions

The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, obligor approval, and any relevant clauses.

Step 5 – Obtain Signatures

Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.

Related Documents

• Purchase Agreement : Outlines the terms and conditions of an item sale.
• Business Contract : An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
• Lease/Rental Agreement : A lease agreement is a written document that officially recognizes a legally binding relationship between two parties -- a landlord and a tenant.
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The document above is a sample. Please note that the language you see here may change depending on your answers to the document questionnaire.

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The Florida Contractor’s Guide to AOBs: Laws, Requirements, and FAQs

In Florida, the use of an assignment of benefits (AOB) has become increasingly popular as a means of streamlining property insurance claims. They also have come under fire from insurance carriers, and as part of the recent sweeping property insurance reforms in Florida, the Florida legislature banned the future use of AOBs in property claims. But they’re not gone yet — at least for insurance policies issued before 2023.

But even for those pre-2023 policies, Florida law extensively regulates the use of AOBs. Whether you’re a roofer, restoration pro, or general contractor, you need to know about these rules and regulations if you want to legally use an AOB in Florida. The cost of violating these rules is high, often meaning the AOB is void and entirely unenforceable! So read on to make sure you comply with Florida AOB law.

Table of Contents

How Recent Property Insurance Reforms in Florida Affect AOBs

In December 2022, the Florida legislature enacted Senate Bill 2-A, a game-changing law that transformed the property insurance landscape in Florida. Among other major changes to Florida property insurance and claims, SB 2-A effectively outlawed the future use of assignment of benefits in property insurance claims. Under the new reforms, any homeowner’s insurance policy or commercial property insurance policy that issued on or after January 1, 2023 is not eligible for an AOB.

In other words, due to the 2022 Florida property insurance reforms, neither homeowners nor business property owners can enter an AOB if their insurance policy issued on or after January 1, 2023 .

Is an Assignment of Benefits Enforceable under Florida Law?

Maybe. The answer depends on whether the underlying policy issued before January 1, 2023, and whether the assignment of benefits complies with all the requirements of Section 627.7152, Florida Statues. If the answer to either of those questions is no, then the AOB is not enforceable for property claims in Florida.

Requirements for an Enforceable AOB in Florida

The issue of whether an AOB in Florida is enforceable is complicated. To make the issue more understandable, we’ve broken it down in the sections below.

The Underlying Policy Must Have Issued Before January 1, 2023

As we’ve said already, the threshold question for whether an AOB is enforceable in Florida is when the applicable policy issued. If the policy issued on or after January 1, 2023, that’s the end of the story — any AOB based on that policy is unenforceable, full stop.

The AOB contract must meet the requirements of Section 627.7152(2), Florida Statutes.

If the insurance policy issued before 2023, then the AOB still must comply with the rest of Section 627.7152, Florida Statutes. In particular, under Section 627.7152(2)(a), an assignment of benefits is not enforceable in Florida unless the AOB contract meets all of the following requirements:

The AOB contract must be in writing and signed by both parties.

Florida law requires that an AOB contract “[b]e in writing and executed by and between the assignor and the assignee.” Section 627.7152(2)(a)(2), Florida Statutes .

This one is straightforward: An AOB isn’t enforceable in Florida unless both your company and the policyholder sign a written AOB contract.

The AOB contract must explicitly allow the policyholder to rescind the AOB without penalty within certain periods

Florida law requires that an AOB contract “[c]ontain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.” Section 627.7152(2)(a)(3), Florida Statutes .

Don’t forget, this provision doesn’t just give a policyholder rights to rescind an AOB within the time periods stated above — it requires that the AOB contract actually contain the statutory language giving the policyholder those rights.

Also, the AOB contract needs to include all of this statutory language. At least one court has suggested that if even part of this language is missing, then the AOB does not meet the requirements of Section 627.7152, Florida Statues, and is therefore invalid and unenforceable. JPJ Servs. LLC v. New Hampshire Ins. Co. , No. 21-14329-CIV, (S.D. Fla. June 3, 2022) .

The AOB contract must explicitly require you to notify the insurance company about the AOB

Florida law requires that an AOB contract “[c]ontain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier. Delivery of the copy of the assignment agreement to the insurer may be made: a. By personal service, overnight delivery, or electronic transmission, with evidence of delivery in the form of a receipt or other paper or electronic acknowledgment by the insurer; or b. To the location designated for receipt of such agreements as specified in the policy.” Section 627.7152(2)(a)(4), Florida Statutes .

When the AOB contract is signed, it must contain an itemized, per-unit cost estimate of the repair work.

Florida law requires that an AOB contract “[c]ontain a written, itemized, per-unit cost estimate of the services to be performed by the assignee.” Section 627.7152(2)(a)(5), Florida Statutes .

Two important notes here.

First, you need to attach the estimate to the AOB before the policyholder signs the AOB . Providing an estimate to the policyholder after the parties sign the AOB puts the AOB at risk of being attacked as unenforceable. Several Florida contractors have learned this the hard way. In one case, a court held that providing the estimate to the property owner just one day after the parties had signed the AOB rendered it unenforceable. JPJ Servs. LLC v. New Hampshire Ins. Co. , No. 21-14329-CIV (S.D. Fla. June 3, 2022) .

Second, the estimate needs to be detailed . A top-line price for the work won’t suffice. Nor will a standard pricing list for products or services. In fact, a Florida appellate court has specifically decided that a standard pricing list for remediation services attached to an AOB did not qualify as an “itemized, per-unit cost estimate” under Section 627.7152(2)(a)(5) and therefore the AOB was void and unenforceable. Air Quality Experts Corp. v. Fam. Sec. Ins. Co., 351 So. 3d 32 (Fla. Dist. Ct. App. 2022) .

The AOB contract must be limited to repairs or mitigation for dwellings and structures

Florida law provides that the AOB contract “must relate only to work to be performed by the assignee for services to protect, repair, restore, or replace a dwelling or structure or to mitigate against further damage to such property.” Section 627.7152(2)(a)(6), Florida Statutes .

The AOB contract must contain a very specific notice to the policyholder

Specifically, Florida law requires that the AOB contract contain the following notice in 18-point uppercase and boldfaced type:

YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.

Section 627.7152(2)(a)(6), Florida Statutes .

In the AOB contract, you must indemnify the policyholder.

Under Florida law, the AOB must “[c]ontain a provision requiring the assignee to indemnify and hold harmless the assignor from all liabilities, damages, losses, and costs, including, but not limited to, attorney fees.” Section 627.7152(2)(a)(7), Florida Statutes .

The AOB contract cannot contain a penalty or fee for rescission, processing checks, cancelling the agreement, or administrative costs.

Under Florida law, “an assignment agreement may not contain: 1. A penalty or fee for rescission under subparagraph (a)3.; 2. A check or mortgage processing fee; 3. A penalty or fee for cancellation of the agreement; or 4. An administrative fee.” Section 627.7152(2)(b), Florida Statutes .

The Law Requires You to Cooperate with Insurance Carriers

Florida law set out very specific actions that a roofer, mitigation pro, restoration specialist, or other contractor working under an AOB must take when dealing with an insurance company. The requirements are specific enough that it’s worth reproducing the statutory language directly:

A [contractor, roofer, restoration pro, etc.] (a) Must provide the assignor with accurate and up-to-date revised estimates of the scope of work to be performed as supplemental or additional repairs are required. (b) Must perform the work in accordance with accepted industry standards. (c) May not seek payment from the assignor exceeding the applicable deductible under the policy unless the assignor has chosen to have additional work performed at the assignor’s own expense. (d) Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, submit to examinations under oath and recorded statements conducted by the insurer or the insurer’s representative that are reasonably necessary, based on the scope of the work and the complexity of the claim, which examinations and recorded statements must be limited to matters related to the services provided, the cost of the services, and the assignment agreement. (e) Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, participate in appraisal or other alternative dispute resolution methods in accordance with the terms of the policy. Section 627.7152(4), Florida Statutes .

Limited Reimbursements for Emergency Repair AOBs

Contractors should know that Florida law limits insurance reimbursements for emergency repairs, such as roof tarping and water mitigation. Specifically, Section 627.7152(2)(c), Florida Statutes , caps insurance reimbursements for AOB repairs made under “urgent or emergency circumstances” at $3,000 or 1 percent of the applicable Coverage A limit, whichever is greater. Section 627.7152(2)(d), Florida Statutes . In addition, if the AOB contract provides for reimbursement beyond these limits, the AOB is invalid and unenforceable. The statute defines “urgent or emergency circumstances” as “a situation in which a loss to property, if not addressed immediately, will result in additional damage until measures are completed to prevent such damage.”

Collecting Against Policyholders Prohibited

By signing an AOB, you permanently waive your right to collect from or sue the policyholder for payments owed for services described in the AOB. This waiver of your right to collect or sue is fundamental to the AOB, and specifically covered by statutes. In Florida, the waiver applies even if the policyholder rescinds the AOB or the AOB is later held to be invalid.

There are a few important exceptions to the general waiver above. Specifically, a policyholder is responsible for:

• Any applicable deductible.
• Any betterment ordered and performed that is approved by the named insured.
• Any contracted work performed before the assignment agreement is rescinded.

Section 627.7152(7), Florida Statutes .

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