A Florida Homeowner’s Guide to Closing on New Construction

Building a new home in Florida is an exciting process. You’ve selected the lot, reviewed plans, made design decisions, and watched your vision take shape from the ground up. By the time construction is nearing completion, most owners are eager to close, move in, and finally enjoy the home they’ve spent months (or years) planning.

But here’s the part many owners don’t realize until it’s too late: closing on a new construction home is not just a formality—it’s a legal checkpoint where serious financial and liability risks can surface if you’re not careful.

Unlike resale homes, new construction closings involve unfinished work, multiple contractors, outstanding payments, and legal obligations that can follow the property long after closing day. Understanding these issues before you close can save you from costly disputes down the road.

Let’s walk through the most important considerations Florida homeowners should understand when closing on a newly built home.

Why Closing on New Construction Is Different

When you build a home, you’re not just buying real estate—you’re wrapping up a complex construction project. At closing, there may still be:

• Incomplete or defective work
• Open permits or pending inspections
• Unpaid subcontractors or suppliers
• Warranty obligations that haven’t yet begun

Florida law treats construction-related issues very differently than standard real estate transactions. If something goes wrong after closing, the legal leverage often shifts away from the owner and toward the builder.

That’s why closing on new construction requires more scrutiny than many owners expect.

The Builder’s Punch List: Your Last Real Leverage

As construction nears completion, owners typically create a punch list—a written list of items that are incomplete, defective, or not built according to contract specifications.

Common punch-list items include things like finish defects, alignment issues, cracked tile, paint flaws, trim gaps, improperly installed fixtures, or cosmetic drywall damage. While these may seem minor, they often represent the final details that determine whether the home truly meets contractual standards.

Here’s the critical issue: once you close, your leverage to enforce punch-list completion drops dramatically.

Before closing, builders are motivated to resolve issues because payment is still pending. After closing, those same items often become “warranty issues,” subject to delays, exclusions, and scheduling problems.

For Florida homeowners, the safest approach is to ensure that punch-list items are either fully completed before closing or clearly tied to money held back in escrow with defined deadlines for completion.

Certificates of Occupancy: More Than a Piece of Paper

A Certificate of Occupancy (CO) is issued by the local building authority and confirms that the home complies with applicable building codes and is safe for habitation.

From a legal and practical standpoint, the CO is non-negotiable. Without a CO (or a temporary CO, where allowed):

• You may not legally occupy the home
• Insurance coverage may be limited or denied
• Lenders may refuse to fund
• Code enforcement issues can arise post-closing

Some builders may suggest closing before the CO is issued, especially if inspections are “almost complete.” While this may seem harmless, it places significant risk on the owner. If final approvals stall, the owner—not the builder—often bears the consequences.

As an owner-builder client, you should treat the CO as a mandatory closing condition, not a post-closing formality.

Construction Liens: A Hidden Risk for Florida Homeowners

One of the most misunderstood aspects of new construction in Florida is construction lien exposure.

Under Florida law, subcontractors, material suppliers, and vendors can file liens against your property if they are not paid—even if you’ve already paid the general contractor in full. This creates a dangerous scenario for owners:

• You pay the builder
• The builder fails to pay a subcontractor
• The subcontractor files a lien against your home
• You’re forced to resolve a dispute you didn’t create

Construction liens can cloud title, interfere with refinancing, and lead to litigation if not resolved properly.

Lien Waivers: Essential Protection at Closing

The most effective way to reduce lien risk is through proper lien waivers. For owners closing on new construction, lien waivers should be:

• Obtained from the general contractor
• Obtained from all subcontractors and suppliers
• Final, unconditional, and compliant with Florida statutory forms
• Tied directly to actual payment

Relying on a single contractor affidavit or verbal assurances is rarely sufficient. Florida lien law is technical, and mistakes can leave owners exposed long after closing.

Escrow Holdbacks: A Practical Tool for Owners

In many new construction closings, unresolved work or lien exposure can be addressed through an escrow holdback.

An escrow holdback allows a portion of the closing funds to be held by a neutral escrow agent and released only when specific conditions are met, such as:

• Completion of punch-list items
• Issuance of final inspections or CO
• Delivery of final lien waivers

For owners, escrow holdbacks help maintain leverage without delaying closing entirely. They also provide a structured, documented process for resolving outstanding issues.

Builders may resist escrow holdbacks, but from an owner’s perspective, they are one of the most effective risk-management tools available.

Timing and “Substantial Completion” vs. True Completion

Builders often refer to a project as “substantially complete” to justify closing. In construction terms, substantial completion generally means the home can be used for its intended purpose—not that all work is finished or compliant. For owners, this distinction matters. Substantial completion does not mean:

• All contract work is done
• All defects are resolved
• All lien rights are extinguished

That’s why owners should focus less on labels and more on objective closing conditions tied to documentation, inspections, and escrow protections.

Why Owners Should Be Proactive at Closing

Many construction disputes arise not because the home was poorly built—but because the closing process failed to address unfinished work, payment issues, or legal exposure. A careful, well-structured closing can:

• Preserve your leverage
• Prevent surprise liens
• Clarify responsibility for remaining work
• Reduce post-closing disputes
• Protect your long-term investment

For Florida homeowners, the closing phase is not the time to rush or rely solely on builder-prepared documents.

Final Thoughts: A Strong Closing Protects the Home You Worked So Hard to Build

Building a home is deeply personal—and financially significant. By the time you reach closing, it’s tempting to assume the hard part is over.

In reality, closing is where legal protections either lock in—or quietly disappear.

Understanding punch lists, certificates of occupancy, lien waivers, and escrow protections empowers you to finish the process with confidence instead of uncertainty.

If you’re building a new home in Florida and approaching the closing stage, having experienced legal guidance can make the difference between a smooth transition and years of unnecessary frustration.

Does Closing Feel Rushed on Your New Build? We Help Homeowners Regain Control.

Punch lists, lien waivers, and occupancy issues often collide at closing. Reaching out to DuFault Law before signing can provide clarity on what must be resolved now and how to avoid inheriting problems after move-in.

• Call us at (239) 422-6400
• Email us at contact@dufaultlaw.com
• Or Visit our Contact Page to schedule a consultation