Golf courses in Florida are often sold because the market changes, golfers’ tastes change, or the costs of running a golf course are too high. Here are some important things to think about if you want to buy or sell a golf course in Florida.
The Contract
In most cases, the sale of a golf course includes both the real property and the personal property on the course. Due to the possible repercussions of exchanging preliminary communications. Which may form a legally enforceable contract, both the buyer and the seller are strongly recommended to seek the advice of legal counsel at an early stage in the process.
Title
The current owner of the real property, as well as any liens, encumbrances, and other things that may influence the title to the real property. Will be included in a title commitment. If there is a title defect that is covered by the policy, a title insurance policy that is issued in the name of the buyer at the time of closing will provide the buyer with protection against financial loss caused by the title defect. As a result of the fact that title insurance policies in Florida are based on the rates that have been promulgated by the Florida Department of Insurance .Title insurance premiums that are charged by title insurers, attorney title agents, and title companies are all the same throughout the state of Florida.
Survey
The present ownership of the real property, as well as any liens, encumbrances, and other problems that may impair the title to the real property, will be outlined in a title commitment. A title policy that is issued in the name of the buyer at the time of closing will provide the buyer protection against financial loss. In the event that there is a defect in the title of the property that is covered by the policy. The Florida Department of Insurance promulgates rates that are used as the basis for title insurance policies sold in the state of Florida. This ensures that title insurance premiums demanded by title insurers, attorney title agents, and title corporations are consistent throughout the state.
Environmental
It is conceivable for a specific golf course to have a history of usage that has resulted in the contamination of groundwater and surface water . With various pollutants such as pesticides, fertilizers, and other potentially harmful substances. Engaging the services of an environmental consultant at an early stage of the process is recommended in order to acquire a comprehensive understanding of the current environmental status of a golf course. This will allow for the preparation of the necessary environmental reports as well as the conduct of the necessary studies.
Physical improvements
Facilities like a pro shop, a clubhouse, and maintenance areas might be added as part of the golf course’s physical enhancements. Roofing, heating, ventilation, air conditioning (HVAC), plumbing, and electrical systems have to be assessed. Caveat emptor, sometimes known as “buyer beware,” is a legal principle that typically applies to the acquisition and sale of commercial real estate in the state of Florida .As a result, it is the responsibility of the buyer to conduct an investigation into the status of different components of the property.
Personal Property
A golf course may own or rent personal property used in conjunction with its business in addition to real estate. These are some instances of such personal property:
Furniture, Fixtures, and Equipment
Golf carts and other equipment are often leased by golf courses under leasing agreements. Such leasing agreements may be examined to learn about things like recurring lease payments. Termination rights, termination costs, assignee rights, length, and equipment maintenance responsibilities. A list will also need to be made of the furniture, fixtures, and machines. That the golf course owns, not just the ones it rents.
Inventory
It is recommended to make a list of the items, food, drinks, flatware, and tableware. Along with any other important inventory that is used in conjunction with the golf course and clubhouse.
Point of Sale System
Using a point-of-sale system, a golf course may efficiently manage tee times, sell products, and arrange lessons, among other things. It is suggested that the contract for the point-of-sale system be checked to see . What are the regular fees, cancellation rights, cancellation fees, transfer rights, and other terms?
Architectural Plans/Engineering Drawings
If the seller has architectural blueprints and engineering drawings. The buyer may be able to use them to plan future repairs or changes to buildings that already exist.
Distressed Sales
It is not unusual for golf courses to be sold in a distressed state. Before selling the golf course. The owner of the golf course could consider submitting a petition for protection under the bankruptcy laws. Although this will depend on the current state of the golf facility’s finances. The following may be easier to do with the help of bankruptcy law if sufficient preparation is done:
Elimination of Documentary Stamp Tax
The payment of documentary stamp tax, which would normally be due under no bankruptcy legislation. May not be required if the sale of a golf course is correctly structured in bankruptcy as a post-confirmation transfer. This allows for the sale of a golf course without the need to pay the tax.
Warding Off Third-Party Claims Post-Closing
A sale of property belonging to the bankruptcy estate may be conducted. Free and clear of any interest in such property of an entity other than the estate. In accordance with the provisions of Section 363(f) of the Bankruptcy Code. The buyer is able to assume ownership of the property without being subject to any claims made by other parties. Such as those made by the seller’s trade creditors and other parties.
Additional Considerations
The buying and selling of a golf course could be subject to one or more of the following additional factors:
Management Agreements
It is feasible for the owner of the golf course and the person who operates the course to be two separate organizations .The management agreements that could be in place for running the golf course and clubhouse need to be looked at from a legal point of view.
Vendor Agreements
In addition, it is important to analyze the termination and assignment rights included in the vendor agreements that are connected to the management of the golf course and clubhouse. If the seller is up to date with its payments to its suppliers. It should be clear through an examination of the seller’s accounts receivable reports and the paperwork supporting those reports.
Employees
When workers are let go or transferred as a consequence of the sale. The process must adhere to all employment laws and employment contracts in effect in the relevant jurisdictions. There is a possibility that the buyer’s due diligence will need the participation of one or more of the seller’s personnel. Also a smooth transition. The people involved should come up with a plan for telling workers about the sale and what they plan to do after the sale is over.
Conclusion
As was just briefly said, buying and selling a golf course is a complicated deal that involves a number of factors that are important in many different areas of the law.
