No Clear Title, No Closing: The Danger of Uncured Code Enforcement Liens for Buyers and Sellers of Florida Real Estate

What Do You Need to Know?

• Uncured code liens prevent the seller from delivering marketable title, which is a mandatory requirement that can cause the entire transaction to fail.
• Sellers must proactively identify and secure final, fully-executed lien releases or compliance agreements well before the closing date.
• Buyers can legally refuse to close and demand their deposit back if the seller fails to clear title defects by the "time is of the essence" closing date.

In a recent decision from Florida’s Third District Court of Appeal, College Health II GP, Inc. v. Essam Fahad Zahid (No. 3D24-2131, Fla. 3d DCA Oct. 29, 2025), the Court affirmed a final judgment finding that a seller breached a commercial real-estate purchase agreement by failing to deliver marketable title at closing. The buyers were awarded the return of their deposit because the seller could not satisfy contractual title-delivery obligations by the “time is of the essence” closing date.

Case Background

The seller’s property was encumbered by recorded code-enforcement liens issued by the City of Miami. Under the purchase and sale agreement (“PSA”), the seller was obligated to cure those title defects and provide releases or a City-approved Compliance Agreement before closing. Instead, the seller failed to obtain the City’s signature on the Compliance Agreement or to produce releases of the liens. Despite repeated assurances that the issues were “resolved,” the City-signed Compliance Agreement was not delivered until after the contractual closing date had passed.

The trial court found that this failure to tender a fully executed Compliance Agreement rendered title unmarketable, constituted a material breach, and excused the buyers from closing. The buyers, who were otherwise ready and able to perform, were entitled to the return of their deposit. The Third DCA affirmed, rejecting the seller’s arguments that the buyers had anticipatorily breached.

Best Practices to Avoid Title-Delivery Defaults

For Sellers:

• Identify and resolve liens early. Conduct a title search at listing and engage with municipalities or lienholders well before closing.
• Document curative efforts. Keep proof of lien releases, municipal communications, and title-company clearance.
• Allow time flexibility. Include provisions allowing extension of the closing date if curative work is pending.
• Avoid reliance on incomplete compliance agreements. A document unsigned by an authority (like the City) cannot render title marketable.
  Maintain transparency. Provide buyers with updates and written evidence that title issues are being addressed.

For Buyers:

• Require clear title standards. Specify “marketable” or “insurable” title and tie closing obligations to delivery of proof.
• Use objection periods wisely. Object to liens or defects promptly and in writing.
• Confirm readiness to perform. Maintain records of available funds to demonstrate ability to close once title is cleared.
• Don’t waive rights. Refuse to close on unmarketable title unless the defect is immaterial and agreed upon in writing.

Final Thoughts

This decision highlights that when title defects remain unresolved at closing, sellers risk default even if curative steps are underway. Delivery of marketable title at closing is not optional, but mandatory.  Sellers, buyers, and their counsel should be on high alert to avoid this mistake and to ensure smooth, pain-free closings. 

About our Author

Andrew McBride is a Partner in the Adams & Reese Tampa office. He has a diverse Florida-based litigation and transactional practice focused on real estate transactions, contract review and drafting, construction litigation, foreclosure, and other creditors’ rights matters.