Legal Question in Real Estate Law in Florida

While the answer to your question will depend on the specific language of the agreement under which you purchased your interest in the business and pledged your home as collateral, it is typical for such agreements to include provisions prohibiting your from "impairing" the lender's security interest in your home during the the repayment period of the start up loan. Normally this means that you can't sell the home, or permit any other liens or encumbrances against it until the loan has been fully repaid. While the lender may be willing to let you substitute another asset of sufficient value in place of the home as security for the repayment of the startup loan, such an agreement would need to be in writing and signed as an amendment to the existing loan or security agreement. Absent such an agreement, your sale of the house, or the imposition of liens against it will typically be deemed a breach of the loan agreement and may entitle the lender to accelerate all remaining payments due under the terms of the start-up loan -- i.e. force you to pay all of the remaining principal balance immediately, failing which the lender could then seek to foreclose on the home under the terms of the security agreement. Additionally, if the lender becomes aware of a pending contract for sale, they could record a Lis Pendant which wold essentially prevent you from being able to close on the sale. Finally, to the extent that you failed to advise your buyer of the existing security interest granted to the lender, the buyer could rescind the purchase agreement based on seller disclosure requirements under Florida law.