Legal Issues That Matter


Newlyweds, Re-title your real estate quickly!

Florida Statute Section 201.02, as of July 1, 2018, will waive documentary taxes on deeds between spouses. Currently, if a spouse owns a homestead prior to marriage, and then conveys the homestead to the married couple to take advantage of Florida's tenancy by the entireties protections in addition to the homestead protections, then documentary taxes are assessed based on all outstanding mortgages on the homestead property.

However, as of July 1, 2018, such taxes will not apply to a deed that conveys homestead property between spouses if there is no other consideration being paid between the spouses, and if the deed is recorded within one year after the date of the marriage.

So, if you were recently married, and want to take advantage of the new statute, you better act quickly.


Waiving Spousal Homestead Rights in a Deed

The Florida Legislature has passed, and the Governor has signed, a new law (Section 732.7025, Florida Statutes) that will make it easier for spouses to waive their homestead rights via a deed of the homestead property to the other spouse. 

Effective July 1, 2018, any deeds conveying the homestead that is executed by one spouse to the other, must contain the following statement if the parties are intending that the deed waive the spouse's homestead rights in the property after death:

By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me.

With this language on the deed, it clarifies that the grantor spouse intends to waive the homestead rights that spouse has in the homestead when the grantee spouse dies.

For example, currently, if the homestead is held only in the name of the husband at his death, the wife may elect to take a half interest in the property together with the children; alternatively, the wife automatically receives a life estate in the property with the remainder to the children. However, if this clause is in the deed after July 1, 2018, the wife can convey her interest in the homestead to her husband via deed prior to his death so that it is solely in his name; and it's clear that she's waiving her right to own a half interest or at least a life estate in the property automatically when he dies.

The law clarifies that such a waiver by deed does not waive the homestead protection against creditor's claims during and after the owner's death, however. Further, even if such a deed is recorded with this statement on it, the other spouse whose name is no longer on title is still required to sign any future mortgages or deeds for them to be effective against the spouse whose name is omitted.

This begs the question: If a spouse has already conveyed his interest in the homestead solely to his spouse, should a new deed be created and recorded after July 1, 2018, to ensure that their wishes are carried out at death?


New disclosure on deeds in Miami-Dade

Miami-Dade County now requires that, if you are a developer of new residential property in the county, and the property is subject to pending or existing a special taxing district, you must disclose that fact on the face of the deed, conveying the property to the buyer. 

The statement on the face of the deed, must be as follows:


________________________         ____________

Signature of Purchaser                     Date

The new law is effective as of February 16, 2018, and is implemented 90 days after that date. The statement must appear on the face of the deed, be signed by the purchaser/grantee, and acknowledged (notarized). Of course, the blank lines would need to have complete information about the name of the taxing district and for what purpose the district is created.


Orange County Property Fraud Alerts

Phil Diamond, the Orange County Comptroller (the guy who oversees recordings of deeds, mortgages, and any other Official Records related to real estate and identity), announced today that his office now provides automatic alerts to subscribers who sign up for them.

Using the office's online system, subscribers can sign up to be alerted whenever a document is recorded in the Official Records with a name that matches the subscriber's. The service is free and recommended for everyone who is concerned about identity or property theft.

Users can subscribe for free here:


Seller financing and land trusts

We are often asked whether a land trust can be used in a seller-financing transaction to avoid the need for judicial foreclosure in the event of the buyer-borrower's default. In such a scenario, the property would be conveyed at closing to a third-party independent trustee who would hold title to the property until the purchase money note is paid in full. If the buyer-borrower defaults, then -- under the terms of the land trust -- the trustee would convey the property back to the seller-lender.

There are a couple of problems with this scenario in Florida. First, if a buyer is buying a property to occupy it as their primary residence, they will find it difficult if not impossible to obtain the Florida homestead tax exemptions or creditor protections while the property is held in the name of a third-party trustee. To obtain the tax exemption, the occupant must have at least an equitable interest in the property being occupied. In the case of a true Florida land trust, all equitable and legal title vests solely in the trustee. At that point, the buyer has no equitable interest that would be subject to homestead tax exemptions or creditor protections.

Secondly, Florida does not allow non-judicial foreclosures except in timeshare mortgage and assessment lien foreclosure actions. While it is common to see the land trust with a primary and secondary beneficiary used for hard money loans with real estate investors, those avoid judicial foreclosure mostly because the parties involved are looking at it solely from an economic rather than an emotional standpoint and are willing to work together to avoid the need for a formal judicial foreclosure. However, when the property in trust is occupied by the borrower, it has been our experience that the borrower is not willing to go down without a fight. In that case, judges consistently have required the lender to file a mortgage foreclosure action while disallowing the summary ejectment of the borrower from the trust property.

If a client is selling or buying a property, using seller financing, we will review their situation and advise them -- in most cases -- to stick to the traditional note and mortgage or agreement for deed, knowing that they may be forced to judicially foreclose the borrower's equity of redemption in the future.