At What Exact Point Has a Closing Occurred?

Contracts have specific guidelines that determine the moment a transaction officially closes – and if calls to Florida Realtors Legal Hotline are any indication, it may not be when you think.

ORLANDO, Fla. – A frequent call to the Florida Realtors Legal Hotline involves questions about the closing of transactions – not the date, mind you, but what exactly does a closing entail? What is to occur for closing to happen?

Using the most popular form contract, the Florida Realtors/Florida Bar residential contracts (“FR/Bar contracts”), let’s break down what closing is. Hopefully, we’ll get everyone on the same page. For the purposes of this article, we are going to focus on paragraphs 4, 6(a), and Standard 18(S), as all of these together lay out what needs to occur and what constitutes closing.

Paragraph 4 of the FR/Bar contracts reads as follows:


  • The closing of this transaction shall occur when all funds required for closing are received by Closing Agent and Collected pursuant to STANDARD S and all closing documents required to be furnished by each party pursuant to this Contract  are delivered (“Closing”). Unless modified by other provisions of this Contract, the Closing shall occur on _____________________ (“Closing Date”), at the time established by the Closing Agent.

The first section of this paragraph lays out the definition of closing because the term – (“Closing”) – is in quotations and parentheses at the end of the sentence – a standard way for contracts to say, “This is how we’ll refer to this term throughout the rest of this contract, with the preceding language defining the meaning of the term.” (Note: STANDARD18(I)(ii) lists out closing documents required by the Contract.)

So what IS Closing? It occurs when two things happen:

  1. All funds required for the closing are received by the Closing Agent and Collected pursuant to STANDARD S
  2. All closing documents required to be furnished by each party pursuant to this Contract are delivered.

Many calls begin with a member saying, “But the seller signed all the documents already!” And while signing is PART of the process, signing in and of itself does not constitute closing based on the definition in the FR/Bar contracts.

What else, aside from signing all the required documents, has to occur? All funds required for the closing must be received by the Closing Agent – and not just received: They must be COLLECTED as defined in STANDARD S of the FR/Bar contracts. Let’s look at that section.

STANDARD S of the contracts reads:


  • “Collection” or “Collected” means any checks tendered or received, including Deposits, have become actually and finally collected and deposited in the account of Escrow Agent or Closing Agent. Closing and disbursement of funds and delivery of closing documents may be delayed by Closing Agent until such amounts have been Collected in Closing Agent’s accounts.

What does this mean? STANDARD S clarifies that the funds have to be actually and finally collected and IN the account. In other words, the funds must be available in the Closing Agent’s accounts, not just in the form of a check delivered at closing. For this reason, sending funds via wire may be preferable, as the funds can be “collected” in less time since a wire transfer will likely go through quicker than a check that must be physically deposited.

Members representing sellers often call the Hotline, claiming, “My seller isn’t happy. They just signed all the required documents at closing, but the money isn’t in their bank account yet!”

But both parties should note this: The contract specifically states that disbursement of funds may be delayed UNTIL such amounts have been Collected. And note the language doesn’t require the funds to be in the SELLERS’ account for closing to occur.

We also get calls saying sellers refuse to give keys to buyers because they don’t yet see the funds in their bank account. Here is where paragraph 6(a) comes into play. Let’s look at the relevant portion of paragraph 6 with respect to what needs to take place at Closing.


  • (a) Unless Paragraph 6(b) is checked,, Seller shall, at Closing, deliver occupancy and possession of the Property to Buyer free of tenants, occupants and future tenancies. Also, at Closing, Seller shall have removed all personal items and trash from Property and shall deliver all keys, garage door openers, access devices and codes, as applicable, to Buyer.

This makes it clear that Seller SHALL deliver occupancy and possession of the Property, plus have all personal items and trash removed, and give all keys and other applicable devices to the buyer at closing. Sellers who won’t turn over the keys until the funds appear in their account aren’t, in my opinion, in compliance with the contract. (Note: Paragraph 6(b) is checked when the Property is subject to lease(s) or occupancy after Closing and is not addressed for the purposes of this article.)

As an agent, it’s important to understand what constitutes closing. The signing of all required documents and COLLECTED funds in the Closing Agent’s account – not the sellers – defines closing. And in the absence of paragraph 6(b), sellers are to convey occupancy, possession of the property, free of personal belongings and trash in addition to delivering keys (and other applicable devices).

However, remember, the only one who can really confirm closing has occurred is the Closing Agent. Communicate regularly with the Closing Agent during the transaction. It’s the best way to serve clients and make sure everyone stays on track for a smooth closing process.

Meredith Caruso is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication

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