If you’re buying or selling Florida real property and the property is damaged by a fire during the contract period, who is responsible for the damage? Buyer or seller? Whether buyer or seller is responsible will depend on the “risk of loss” provision in the contract. But if risk of loss is not addressed in the contract, then generally the buyer bears the risk of loss.
In the most common standard form contract used in Florida in 2025, the “AS IS” Residential Contract For Sale And Purchase, the risk of loss provision is found in section 18(M). Section 18(M) states that if there is damage to the property by fire or other casualty, then who is responsible depends on the cost of restoring the property. If restoration costs do not exceed 1.5% of the purchase price, then the seller will be responsible for the damage. If restoration costs do exceed 1.5% of the purchase price, then buyer can purchase the property “as is” with a 1.5% of the purchase price credit from the buyer or the buyer can cancel the contract and receive a refund of the buyer’s deposit.
If risk of loss is not addressed in the contract, then the risk of loss is on the buyer after the contract is fully executed. See Hauben v. Harmon, 605 F.2d 920 (5th Cir. 1979). For instance, if the property is condemned after the contract was signed, the contract is still valid, and the buyer may be in breach of contract if the buyer decides not to buy. See Arko Enterprises, Inc. v. Wood, 185 So.2d 734 (Fla. 1st DCA 1966). Another example is if zoning changes during the contract period to the extent that the property is worth less, then the buyer generally cannot pull out of the contract on that basis. See J.C. Penney Co. v. Koff, 345 So.23 732 (Fla. 4th DCA 1977).