Florida State Supplement€¦ · CHAPTER 10 LEGAL ASPECTS OF REAL ESTATE FINANCE 25 Usury 25...

Copyright © 2008 Delmar Learning. All Rights Reserved. 1

PRACTICAL REAL ESTATE LAW

Fifth Edition

By Daniel Hinkel

Florida State Supplement

By Lisa F. Santos


Table of Contents CHAPTER 1 INTRODUCTION TO THE LAW OF REAL PROPERTY 5

Laws that Govern Real Property Transactions 5

Water Rights 5

Fixtures 5

Adverse Possession 5

Modern-Day Estates in Real Property 6

Life Estate 6

CHAPTER 2 CONCURRENT OWNERSHIP 7

Tenancy in Common 7

Rights, Duties, and Liabilities of the Common Owners 7

Dower and Curtesy 7

Elective Share 7

Ethics: Unauthorized Practice of Law 8

CHAPTER 3 SURVEYS AND LAND DESCRIPTIONS 9

Government Rectangular Survey Description 9

Platted Description 9

CHAPTER 4 PUBLIC REGULATION AND ENCUMBRANCES 10

Zoning 10

Environmental Protection Laws 10

Radon and Lead-Based Paint 10

Power of Eminent Domain 12

Judgment Liens 13

Mechanics’ and Materialmen’s Liens 13

Other Mechanics’ and Materialmen’s Liens 13

CHAPTER 5 EASEMENTS AND LICENSES 14

Prescriptive Easements 14

Easement by Necessity 14

Licenses 14

CHAPTER 6 CONTRACTS 15


Personal Representatives 15

Consideration 15

Written Agreements 15

Specific Performance 15

Liquidated Damages 15

Real Estate Broker 15

CHAPTER 7 PREPARATION AND REVIEW OF A REAL ESTATE

CONTRACT 16

The Parties 16

Condition of the Property and Risk of Loss 16

Survival 16

CHAPTER 8 DEEDS 17

General Warranty Deed 18

Limited (Special) Warranty Deed 20

Quitclaim Deed 22

Written Instrument 23

Signature of the Grantor and Subscribing Witnesses 23

CHAPTER 9 FINANCING SOURCES IN REAL ESTATE TRANSACTIONS 24

Sources of Mortgage Loans 24

CHAPTER 10 LEGAL ASPECTS OF REAL ESTATE FINANCE 25

Usury 25

Mortgages, Deeds of Trust, and Security Deeds 25

Types of Foreclosure 25

Effect of a Valid Foreclosure Sale 25

Debtor’s Remedies or Defenses to Foreclosure 25

CHAPTER 11 MORTGAGE FORMS AND PROVISIONS 26

Residential Mortgage Provisions 26

CHAPTER 12 TITLE EXAMINATIONS 27

Bona Fide Purchaser For Value Rule 27

Constructive Notice 27


Recording Statutes 27

Grantee and Grantor Indices 27

CHAPTER 13 TITLE INSURANCE 28

Title Insurance 28

CHAPTER 14 REAL ESTATE CLOSINGS 29

Reviewing the Real Estate Contract 29

Obtaining the Termite Clearance Letter or Bond 30

CHAPTER 15 GOVERNMENT REGULATION OF REAL ESTATE CLOSINGS 31

CHAPTER 16 REAL ESTATE CLOSING FORMS AND EXAMPLES 32

CHAPTER 17 CONDOMINIUMS AND COOPERATIVES 33

Condominium 33

Birth of a Condominium 33

Articles and Bylaws of a Condominium Association 35

Cooperative 35

Time-Shares 35

CHAPTER 18 LEASES 36

Common Law and Leases 36

Obligation of Repair 36


CHAPTER 1 - INTRODUCTION TO THE LAW OF REAL PROPERTY

LAWS THAT GOVERN REAL PROPERTY TRANSACTIONS

Textbook page 2

The Florida Legislature has enacted a comprehensive statutory scheme which regulates virtually

every aspect of real property law, other than those areas controlled by Federal Law. This

supplement will highlight relevant statutory provisions and notable case law. Hopefully, this will

provide a good starting point for a basic understanding, as well as for further research and study, of

Florida real property law.

WATER RIGHTS

Textbook page 3

Disputes concerning artificial waterways implicate only private rights and are resolved by applying

real property law. Picciolo v. Jones, 534 So.2d 875, 877-78 (Fla. 3d DCA 1988).

FIXTURES

Textbook page 5

The Florida Supreme Court has set forth a three-part test for determining whether an object is a

fixture. Commercial Finance Co. v. Brooksville Hotel Co., 123 So.814 (Fla. 1929). First, the item

must be annexed to the real property. Id. Second, court examines the appropriateness of the use to

the area to which it is annexed. Id. Third, the party making the annexation must intend for the item

to become a permanent part of the real property. Id.

ADVERSE POSSESSION

Textbook page 9

Adverse Possession Under Color of Title

A person claiming adverse possession under color of title must have been in continued possession

of the property for 7 years. Fla. Stat. §95.16(1). Pursuant to Fla. Stat. §95.16(2), property is deemed

possessed in the following cases:

(a) When it has been usually cultivated or improved;

(b) When it has been protected by a substantial enclosure. All land protected by

the enclosure must be included within the description of the property in the

written instrument, judgment, or decree. If only a portion of the land protected by

the enclosure is included within the description of the property in the written


instrument, judgment, or decree, only that portion is deemed possessed;

(c) When, although not enclosed, it has been used for the supply of fuel or

fencing timber for husbandry or for the ordinary use of the occupant;

(d) When a known lot or single farm has been partly improved, the part that has

not been cleared or enclosed according to the usual custom of the county is to be

considered as occupied for the same length of time as the part improved or

cultivated.

Adverse Possession Without Color of Title

One claiming adverse possession without color of title must have had actual continued possession

of the property for 7 years; must have paid property taxes within one year of entering into

possession, and must have established either of the following :

(a) that the property has been protected by substantial enclosure; or

(b) that the property has been usually cultivated or improved.

Fla. Stat. §95.18.

MODERN-DAY ESTATES IN REAL PROPERTY

Textbook page 11

Reverter or forfeiture restrictions are enforceable no later than 21 years from the date of the

conveyance. Fla. Stat. §689.18.

LIFE ESTATE

Textbook page 12

A life estate owner’s failure to pay property taxes constitutes waste. Chapman v. Chapman, 526 So.

2d 131, 135 (Fla. 3d DCA 1988).


CHAPTER 2 - CONCURRENT OWNERSHIP

TYPES OF CONCURRENT OWNERSHIP

TENANCY IN COMMON

Textbook page 21

A conveyance of property to multiple owners is deemed a tenancy in common, absent language to

the contrary. Fla. Stat. § 689(15).

RIGHTS, DUTIES, AND LIABILITIES OF THE COMMON OWNERS

Textbook page 22

Tenants in common have a mutual obligation to pay expenses associated with the property,

including mortgages, taxes, and insurance. See e.g. McHugh v. McHugh, 752 So. 2d 1285 (Fla. 1st

DCA 2000).

DOWER AND CURTESY

Textbook page 25

The concepts of dower and curtesy have been statutorily abolished, in favor of elective share

provisions. Via v. Putnam, 656 So. 2d 460, 462 (Fla. 1995).

ELECTIVE SHARE

Textbook page 25

A surviving spouse [either husband or wife] is entitled to 30% of the elective estate. Fla. Stat. §

732.2065.

ETHICS: UNAUTHORIZED PRACTICE OF LAW

Textbook page 32

A paralegal (or other non-lawyer) may handle a real estate closing if the following conditions are

met:

A. An attorney must supervise and review all the work completed before the

closing;

B. The supervising attorney must decide that the handling or attending of

the closing will require no more than a ministerial act. The supervising attorney

must determine that the client understands the closing document in advance of

the closing;

C. The client must consent to the closing being handled by a nonlawyer and


must receive written disclosure that the nonlawyer will not be able to give legal

advice at the closing;

D. The supervising attorney must be readily available, in person or by

telephone, to provide legal advice or answer legal questions if the need arises;

E. The nonlawyer employee must not give legal advice or otherwise make

decisions that should be made by the supervising attorney. (Fla. Ethics Op. 89-5).


CHAPTER 3 - SURVEYS AND LAND DESCRIPTIONS

GOVERNMENT RECTANGULAR SURVEY DESCRIPTION

Textbook page 42

The government rectangular survey system is not the only form of description used in Florida. Both

plats and metes and bounds description are used. See generally, Fla. Stat. §498.027 (Land Sales

Practices, Application for Registration).

PLATTED DESCRIPTION

Textbook page 46

The Planned Unit Development (PUD) is used within various regions of Florida. The PUD is

recorded as a specific land use plan for that development site. Zoning boards and county

commissioners must ensure that the PUD complies with Florida’s Comprehensive Land Use Plan.

See e.g., Fla. Stat. §163.3202.


CHAPTER 4 - PUBLIC REGULATION AND ENCUMBRANCES

ZONING

Textbook page 72

Pursuant to the Local Government Comprehensive Planning and Land Development Regulation

Act, each local government is required to develop and adopt a comprehensive land use plan. All

developments must be reviewed by the appropriate governing body and conform to regulations to

ensure consistency with the comprehensive plan. Fla. Stat. § 163.3161.

ENVIRONMENTAL PROTECTION LAWS

Textbook page 73

The beaches, fishing lakes, clean air, and sunshine made Florida famous. These natural resources

are so fundamental to Florida’s economy and culture that the Florida Constitution provides that it

“shall be the policy of the state to conserve and protect its natural resources and scenic beauty. . .”

Fla. Const. Art. II, Sec. 7(a). Florida adheres to the Florida Environmental Land and Water

Management Act. A variety of state agencies monitor Florida’s resources.

RADON AND LEAD-BASED PAINT

Textbook page 77

EXHIBIT 4–1

Sample Agreement and Release Concerning Radon Gas

AGREEMENT AND RELEASE CONCERNING RADON GAS

This Agreement and Release Concerning Radon Gas (“this Agreement”) is entered into between

_____ and _____, husband and wife (“Sellers”), whose address is ______, and ______ and ______,

husband and wife (“Buyers”), whose address is ______. On ______, 20__, the parties entered into a

written Contract For Sale And Purchase (“the Contract”) of Sellers’ residence located at ______,

______ County, Florida (“the property”), the legal description of which is more particularly

described as follows:

[Insert legal description]

Pursuant to paragraph ______ of the Contract, Buyers had the property inspected, including radon

gas testing, which disclosed elevated levels of radon gas present in the property.

On or about ______, 20__, ____(mitigation company)_____, a Florida corporation, submitted a

Mitigation Proposal, a copy of which is attached to and made part of this Agreement, in which it


recommended a program guaranteed to reduce radon gas levels below 4.0 pCi/L annual average,

for a total cost not to exceed $______, excluding follow-up testing.

Buyers are willing to proceed with closing of the Contract provided that Sellers place in escrow

sufficient funds to pay for both phases, if necessary, of the radon gas mitigation procedures. Sellers

are willing to place sufficient funds in escrow to pay for the radon gas mitigation procedures and to

proceed with closing the Contract provided that they are released from all liability or responsibility,

jointly and severally.

The parties are willing to allow all escrow funds to be held in the trust account of _____(name and

address)_____ subject to the terms and conditions of this Agreement.

Accordingly, the parties agree as follows:

1. On or before the date of closing of the Contract, Sellers shall deposit into the trust account

of _____(name and address)_____, a total of $_____, to be available to pay for the implementation

of the Mitigation Proposal dated _____, 20__, which shall be conducted after closing by

_____(mitigation company)_____.

2. In consideration of the payment of $_____ into escrow for the purposes described in the

preceding paragraph and of the closing of the Contract, Buyers hereby release Sellers,

_____(Sellers’ names)_____, jointly and severally, and their heirs, personal representatives, and

assigns, and hold them harmless from all causes of actions, suits, demands, and liability of every

kind, for any injuries or damages arising out of or resulting from the elevated levels of radon gas

that were disclosed in the pre-closing radon gas testing of the property.

3. If the total cost to reduce the elevated radon levels to below 4.0 pCi/L annual average is

less than the $_____ maximum estimate, Sellers shall receive all unused escrow amounts.

4. If _____(mitigation company)_____ performs all mitigation steps, but it is unable to reduce

the radon gas levels below 4.0 pCi/L annual average, this shall not affect Buyers’ release of Sellers,

and Buyers shall be solely responsible for any further repairs and liability, including liability to any

third parties as a result of the radon gas levels being above the stated level. This release, however,

shall not prohibit and right to proceed against _____(mitigation company)_____ on its written

guarantee, but it is intended to act as a full release of Sellers only.

5. Sellers’ escrow agent shall not make any disbursements from the escrow funds held in (his)

(her) (its) trust without the prior written consent of all parties. Should any dispute arise between the

parties as to any disbursements, Sellers’ escrow agent will have the right to deposit into the registry

of the Clerk of the Circuit or County Court of ______ County, Florida, all undisbursed sums held in

trust.


Signed by Buyers at _____(address)_____, _____ County, Florida on _____, 20__.

(signature) (signature) ____________________________________ ____________________________________ [print name and address] [print name and address] Witness Buyer (signature) (signature) ____________________________________ ____________________________________ [print name and address] [print name and address] Witness Buyer Signed by Sellers at _____(address)_____, _____ County, Florida, on _____, 20 __. (signature) (signature) ____________________________________ ____________________________________ [print name and address] [print name and address] Witness Seller (signature) (signature) ___________________________________ ____________________________________ [print name and address] [print name and address] Witness Seller

POWER OF EMINENT DOMAIN

Textbook page 78

Florida voters rebuked the Kelo decision by amending the Florida Constitution as follows:

Private property taken by eminent domain pursuant to a petition to

initiate condemnation proceedings filed on or after January 2, 2007, may

not be conveyed to a natural person or private entity except as provided

by general law passed by a three-fifths vote of the membership of each

house of the Legislature.

Fla. Constitution, Art. 10, §6(c).

Likewise, the Florida Legislature expressly rejected �Kelo� takings by enacting the following

amendment to one its Eminent Domain statutes:

It is further found and declared that the prevention or elimination of a

slum or blighted area as defined in this part and the preservation or

enhancement of the tax base are not public uses or purposes for which

private property may be taken by eminent domain and do not saisfy the


public purpose requirement of s. 6(a), Art X of the State Constitution.

Fla. Stat. §163.335(7).

JUDGMENT LIENS

Textbook page 80

A judgment lien on property is enforceable for 10 years from the date of the recording and may be

extended for a term of 10 years thereafter. Fla. Stat. § 55.10(1).

MECHANICS’ AND MATERIALMEN’S LIENS

Textbook page 80

Requirements to establish mechanics’ and materialmen’s liens are provided in Fla. Stat. § 713.01,

et. seq. These statutory provisions are strictly construed in favor of the property owner. Hardrives

Co. v. Tri-County Products, Inc., 489 So. 2d 1211, 1212 (Fla. 4th DCA 1986).

OTHER MECHANICS’ AND MATERIALMEN’S LIEN CONSIDERATIONS

Textbook page 81

A mechanics’ lien must be recorded no later than 90 days after the final furnishing of the labor,

services, or materials in order for it to be valid. Fla. Stat. § 713.08(5).


CHAPTER 5 - EASEMENTS AND LICENSES

PRESCRIPTIVE EASEMENTS

Textbook page 106

Prescriptive easements may be acquired by 20 uninterrupted years of adverse use. See e.g.,

Suwanee River Water Management Dist. v. Price, 651 So.2d 749, 750 (Fla. 1st DCA 1995).

EASEMENT BY NECESSITY

Textbook page 110

Fla. Stat. §704.01 recognizes and adopts common law implied easements based on necessity and

creates a statutory right of way for owners of land-locked property. The procedure for servient

estate owners obtaining compensation for the easement is set forth in Fla.Stat. §704.04.

LICENSES

Textbook page 111

A license is the right to use the property of another for a specific purpose, whereas an easement is

an interest in real property, which may be assigned or conveyed. Dotson v. Wolfe, 391 So. 2d 757,

759 (Fla. 5th DCA 1980).


CHAPTER 6 - CONTRACTS

PERSONAL REPRESENTATIVES

Textbook page 121

A personal representative of an intestate estate or, in cases where a testator did not grant the power

to convey, must obtain authority from the court to convey real property. Fla. Stat. §733.613(1).

When a decedent’s will specifically authorizes the personal representative to sell real property, a

court order is not required. Fla. Stat. §733.613(2).

CONSIDERATION

Textbook page 124

Love and affection, supported by services, has been held to constitute legally sufficient

consideration to support a deed. See e.g., Florida National Bank & Trust Co. v. Brown, 47 So. 2d

748,753 (Fla. 1950).

WRITTEN AGREEMENTS

Textbook page 124

Any interest in real property for a term of more than one year must be conveyed in writing, signed

by the grantor and by two subscribing witnesses. Fla. Stat § 689.01.

SPECIFIC PERFORMANCE

Textbook page 125

Specific performance shall only be granted when: (1) the plaintiff is clearly entitled to it; (2) there

is no adequate remedy at law; (3) the court believes that justice requires said relief. Castigliano v.

O’Connor, 911 So. 2d 145, 148 (Fla. 3d DCA 2005).

LIQUIDATED DAMAGES

Textbook page 127

A provision for liquidated damages is enforceable, but only to the extent that the specified amount

does not constitute a penalty. Cloud v. Schenck, 869 So. 2d 709, 710 (Fla. 1st DCA 2004).

REAL ESTATE BROKER

Textbook page 127

Fla. Stat. 475.17 sets forth the qualifications for brokers’ licensure.


CHAPTER 7 - PREPARATION AND REVIEW OF A REAL ESTATE CONTRACT

THE PARTIES

Textbook page 144

The Florida Bar and the Florida Real Estate Commission have developed a joint version of a

Contract for Sale and Purchase of Real Property. You may obtain a copy from any local realtor or

real estate office in your area.

CONDITION OF THE PROPERTY AND RISK OF LOSS

Textbook page 152

The purchaser bears the risk of loss, unless otherwise specified in the contract for sale. Munshower

v. Martin, 641 So. 2d 909, 910 (Fla. 3d 1994).

SURVIVAL

Textbook page 155

The provisions of the contract do not survive the closing unless specifically provided for within the

contract and are agreed to by all of the parties. Whitehurst v. Camp, 699 So. 2d 679, 684 (Fla.

1997).


CHAPTER 8 - DEEDS

Fla. Stat. §689.02 - Form of warranty deed prescribed

(1) Warranty deeds of conveyance to land may be in the following form, viz.:

"This indenture, made this ___ day of ___ A.D.___, between ______, of the County

of ______ in the State of ______, party of the first part, and ______, of the County

of ______, in the State of ___, party of the second part, witnesseth: That the said

party of the first part, for and in consideration of the sum of ______ dollars, to her

or him in hand paid by the said party of the second part, the receipt whereof is

hereby acknowledged, has granted, bargained and sold to the said party of the

second part, her or his heirs and assigns forever, the following described land, to

wit:

And the said party of the first part does hereby fully warrant the title to said land,

and will defend the same against the lawful claims of all persons whomsoever."

(2) The form for warranty deeds of conveyance to land shall include a blank space

for the property appraiser's parcel identification number describing the property

conveyed, which number, if available, shall be entered on the deed before it is

presented for recording, and blank spaces for the social security numbers of the

grantees named in the deed, if available, which numbers may be entered on the

deed before it is presented for recording. The failure to include such blank spaces,

or the parcel identification number, or any social security number, or the inclusion

of an incorrect parcel identification number or social security number, shall not

affect the validity of the conveyance or the recordability of the deed. Such parcel

identification number shall not constitute a part of the legal description of the

property otherwise set forth in the deed and shall not be used as a substitute for

the legal description of the property being conveyed, nor shall a social security

number serve as a designation of the grantee named in the deed.


Exhibit 8-1 � Sample General Warranty Deed

GENERAL WARRANTY DEED

THIS DEED, made on the ___ day of _____, 20 __ between [insert name of seller] (Grantor) and

[insert name of buyer] (Grantee), whose post office address is __________ and whose Social Security

number is __/__/__.

WITNESSETH, that Grantor, for and in consideration of the sum of $ _____, and other good and

valuable consideration to Grantor in hand paid by Grantee, the receipt of which is acknowledged, conveys to

Grantee and Grantee’s heirs, executors, administrators, and assigns forever the following described land

situated in ______ County, Florida:


Tax Parcel

Identification No. _____

1. Grantor was well seized of the aforesaid premises;

2. Grantor had good right and title to convey;

3. The premises are free from all encumbrances to Grantee except as follows:

[Insert the word “NONE” or the list of permitted encumbrances.]

4. Grantee shall have the peaceable and quiet possession thereof;

5. Grantor shall fully warrant the title and defend it against the lawful claims of all

persons whomsoever; and

6. Grantor will make such further assurance to perfect the fee simple title in Grantee

and Grantee’s heirs, executors, administrators, and assigns as may be reasonably

required.

Signed in the presence of:

(signature) (signature)

___________________________________________ _________________________________________

[print name and address] [print name and address]

Witness Grantor

(signature)

____________________________________________

[print name and address]


Witness

STATE OF FLORIDA

COUNTY OF ____________

The foregoing instrument was acknowledged before me by _ (name of person acknowledging) ,

who identified this instrument as _____(name of instrument)_____, and who signed the instrument willingly.

Sworn to before me on ___(date)___, by ___________, who (is personally known to me) (produced

______(type of identification)______ as identification).

(signature)

_______________________

Notary Public, State of Florida

Print Name: _________________

Commission No.: _____________

My commission expires: _______

(SEAL)

This instrument was prepared by:

(signature)

_______________________________________________

[Print Name of Preparer]

_______________________________________________

_______________________________________________

Address

_______________________________________________


Exhibit 8-2 � Sample Special (Limited ) Warranty Deed

SPECIAL WARRANTY DEED

THIS DEED, made on the day of ______, 20___ between [insert name of seller] (Grantor) and

[insert name of buyer] (Grantee), whose post office address is ______ and whose Social Security number is

__/__/__.

WITNESSETH, that Grantor, for and in consideration of the sum of $______, and other good and

valuable consideration to Grantor in hand paid by Grantee, the receipt of which is acknowledged, conveys to

Grantee and Grantee’s heirs, executors, administrators, and assigns forever the following described land

situated in ______.


Tax Parcel

Identification No. ______

And Grantor covenants with Grantee that, except as noted, at the time of the delivery of this deed:

1. The premises are free from all encumbrances made by Grantor, except as

follows:

[Insert the word “NONE” or the list of permitted encumbrances.]

2. Grantor will warrant and defend against unlawful claims and demands of all

persons claiming by, through, or under Grantor, but against none other.

Signed in the presence of:

(signature) (signature)

_______________________________ _______________________________

[print name and address] [print name and address]

Witness Grantor


(signature)

_______________________________

[print name and address]

Witness

STATE OF FLORIDA COUNTY OF __________ The foregoing instrument was acknowledged before me by _____(name of person acknowledging)_____, who identified this instrument as _____(name of instrument)_____, and who signed the instrument willingly.

Sworn to before me on ___(date)___, by ________, who (is personally known to me) (produced _________(type of identification) ________ as identification).

(signature) _____________________________________ Notary Public, State of Florida Print name: __________________________ Commission No.: ____________________ My commission expires: ______________ (SEAL) This instrument was prepared by: (signature) ________________________________ [Print Name of Preparer] ________________________________ ________________________________ Address ________________________________


EXHIBIT 8�3 � Sample Quitclaim Deed

QUITCLAIM DEED

THIS QUITCLAIM DEED, made this day of ______, 20___ between [insert name of Seller] (Grantor) and [insert name of buyer] (Grantee), whose post office address is ______ and whose Social Security number is __/__/__.

WITNESSETH, that Grantor, for and in consideration of the sum of $______, and other good and valuable consideration in hand paid by Grantee, the receipt of which is acknowledged, quitclaims to Grantee and Grantee�s heirs, executors, administrators, and assigns forever all of the right, title, and interest of Grantor in the following described land situated in ______ County, Florida:


Tax Parcel

Identification No. ______ Signed in the presence of: (signature) (signature) ______________________________________ ______________________________________ [print name and address] [print name] Witness Grantor

(signature) ______________________________________ [print name and address] Witness STATE OF FLORIDA COUNTY OF __________ The foregoing instrument was acknowledged before me by _____(name of person acknowledging)_____, who identified this instrument as _____(name of instrument)_____, and who signed the instrument willingly. Sworn to before me on ___(date)___, by ________, who (is personally known to me) (produced ___(type of identification)___ as identification). (signature) ___________________________________ Notary Public, State of Florida Print name: _________________________ Commission No.: ____________________ My commission expires: ______________ (SEAL)

This instrument was prepared by: (signature) _____________________________ [Print Name of Preparer] _____________________________ _____________________________ Address _____________________________


WRITTEN INSTRUMENT Textbook page 218

A deed need not contain any particular language in order to be valid. Saltzman v. Ahern, 306 So. 2d

537 (Fla. 1st DCA 1975).

SIGNATURE OF THE GRANTOR AND SUBSCRIBING WITNESSES

Textbook page 219

A deed must be executed by the grantor and two subscribing witnesses. Fla. Stat. § 689.01.


CHAPTER 9 - FINANCING SOURCES IN REAL ESTATE TRANSACTIONS

SOURCES OF MORTGAGE LOANS

Textbook page 250

Lending is generally regulated at the Federal level. Therefore, this section of the text is applicable

in Florida.

.


CHAPTER 10 - LEGAL ASPECTS OF REAL ESTATE FINANCE

USURY

Textbook page 278

Generally, the maximum allowable rate of interest of interest in Florida is 18% simple interest, per

annum, on real estate loans that do not exceed $500,000. Fla. Stat.. § 687.03.

MORTGAGES, DEEDS OF TRUST, AND SECURITY DEEDS

Textbook page 281

Fla. Stat. §697.01 provides, in pertinent part:

All conveyances, obligations conditioned or defeasible, bills of sale or other instruments of writing conveying or selling property, either real or personal, for the purpose or with the intention of securing the payment of money, whether such instrument be from the debtor to the creditor or from the debtor to some third person in trust for the creditor, shall be deemed and held mortgages, and shall be subject to the same rules of foreclosure and to the same regulations, restraints and forms as are prescribed in relation to mortgages.

TYPES OF FORECLOSURE

Judicial Foreclosure

Textbook page 289

Fla. Stat. §45.031 sets forth the procedure for judicial sales.

EFFECT OF A VALID FORECLOSURE SALE

Textbook page 289

A mortgagor has a right of redemption at any time before the filing of a certificate of sale or the

time specified in the judgment of foreclosure, whichever is later. Fla. Stat. §45.0315.

DEBTOR’S REMEDIES OR DEFENSES TO FORECLOSURE

Textbook page 291

Courts may set aside a foreclosure sale when there is mistake, fraud, misconduct, or other

irregularity which results in an injustice. Brown v. Mirror Invest. Corp., 471 So.2d 589 (Fla. 4th

DCA 1985); accord, Mody v. California Federal Bank, 747 So. 2d 1016 (Fla. 3d DCA 1999).


CHAPTER 11 - MORTGAGE FORMS AND PROVISIONS

RESIDENTIAL MORTGAGE PROVISIONS

Textbook page 334

Residential mortgages are largely governed by Federal Law. However, Florida has codified its own

anti-discrimination provisions with respect to residential financing, as set forth in Fla. Stat.

§760.25.


CHAPTER 12-TITLE EXAMINATIONS

BONA FIDE PURCHASER FOR VALUE RULE

Textbook page 359

Fla. Stat. §695.01 provides:

(1) No conveyance, transfer, or mortgage of real property, or of any interest

therein, nor any lease for a term of 1 year or longer, shall be good and effectual

in law or equity against creditors or subsequent purchasers for a valuable

consideration and without notice, unless the same be recorded according to law;

nor shall any such instrument made or executed by virtue of any power of

attorney be good or effectual in law or in equity against creditors or subsequent

purchasers for a valuable consideration and without notice unless the power of

attorney be recorded before the accruing of the right of such creditor or

subsequent purchaser.

(2) Grantees by quitclaim, heretofore or hereafter made, shall be deemed and

held to be bona fide purchasers without notice within the meaning of the

recording acts.

CONSTRUCTIVE NOTICE (key term)

Textbook page 360

A recorded security instrument has priority over a subsequent lien, even though the first instrument

was improperly indexed. See e.g., Anderson v. North Florida Production Credit Assoc., 642 So. 2d

88 (Fla. 1st DCA 1994).

RECORDING STATUTES

Textbook page 361

Priority of recorded instruments is determined by the date of filing, not the date the instrument was

executed. Fla. Stat §695.11.

GRANTEE AND GRANTOR INDICES

Textbook page 365

Both grantor and grantee indices are maintained in Florida. Many counties now provide these

indices on-line.


CHAPTER 13 - TITLE INSURANCE

TITLE INSURANCE

ALTA is used in Florida. Thus, the sample forms and explanation contained in the main text are

applicable in Florida.


CHAPTER 14 - REAL ESTATE CLOSINGS

REVIEWING THE REAL ESTATE CONTRACT

Textbook page 470

EXHIBIT 14–1 Sample Real Estate Closing Checklist

FORM OF REAL ESTATE CLOSING CHECKLIST Acquisition of [Insert Reference to Property]

File No. ______________

Closing Date: ______________

Seller: _________________

Buyer: _________________

Lender: _________________

Title Agent: _________________

Property: _________________

I Acquisition Documents.

1. Option agreement.

2. Memorandum of option recorded in Official Records Book _____, Page _____ et seq. of the Public records of _____ County, Florida.

3. Contract for sale and purchase.

4. Escrow deposit notices.

5. Deed [statutory warranty, special warranty, fee simple, or quitclaim] from Seller to Buyer.

6. Bill of sale from Seller to Buyer.

7. Escrow instructions to Title Agent.

8. Corporate resolutions and incumbency certificate of Buyer [if applicable].

9. Bylaws of Buyer [if applicable].

10. Corporate documents of Buyer including certified certificate of incorporation, good standing certificate in _____ [insert name of state of incorporation], and good standing certificate in Florida [if applicable].

11. Return for transfers of interests in Florida real property.

12. Marked-up title commitment no. _____, plus copies of recorded title exceptions.

13. Title policy no. _____.

14. Closing statement.

15. Wiring instructions.

16. Buyer’s title affidavit.

17. Seller’s title affidavit (including construction lien affidavit).

18. Satisfaction of mortgage recorded in Official Records Book _____, Page _____ et


seq. of Public Records of _____ County, Florida.

19. UCC-3 satisfaction statements recorded in Official Records Book _____, Page _____ et seq. of the Public Records of _____ County, Florida, and with the Secretary of State under Item No. _____.

II. Financing Documentation.

20. Promissory note.

21. Mortgage and security agreement.

22. Assignment of leases, rents, and profits.

23. Security agreement.

24. UCC-1 financing statements recorded in Official Records Book _____, Page _____, et seq. of the Public Records of _____ County, Florida, and with the Secretary of

State under Item No. _____.

25. Guaranty and suretyship agreement.

III. Miscellaneous Documents.

26. As-Built survey of property.

27. Hazard insurance policy.

28. Liability insurance policy.

29. Copies of leases [if applicable].

30. Notice to tenants [if applicable].

31. Termite inspection.

32. Roof and mechanicals inspection.

33. Condominium association approval of sale [if applicable].

34. Broker’s commission letter.

35. Radon gas notice to prospective purchaser and/or radon test report.

OBTAINING THE TERMITE CLEARANCE LETTER OR BOND

Textbook page 478

A termite inspection is required in every real estate sale which contains a building on the property.

Fla. Stat. § 475.422. A full termite inspection report is required; a clearance letter is not sufficient.

Failure to comply with section 475.422 may subject licensees to disciplinary action pursuant to

Fla. Stat. § 475.25.


CHAPTER 15 -GOVERNMENT REGULATION OF REAL ESTATE CLOSINGS

The information presented in this chapter is also applicable in Florida.


CHAPTER 16 - REAL ESTATE CLOSING FORMS AND EXAMPLES

The information presented in this chapter is also applicable in Florida. There are also several

commercial sources which provide Florida-specific closing documents.


CHAPTER 17 - CONDOMINIUMS AND COOPERATIVES

CONDOMINIUM

Textbook page 594

The Condominium Act is contained in Chapter 718, Florida Statutes. It is very comprehensive, as

the condominium form of ownership is extremely popular in this state.

BIRTH OF A CONDOMINIUM

Textbook page 594

Condominium Declaration in Florida

Fla. Stat. § 718.104(4) provides that the declaration must contain or provide for the following

matters:

(a) A statement submitting the property to condominium ownership.

(b) The name by which the condominium property is to be identified, which shall include the word "condominium" or be followed by the words "a condominium."

(c) The legal description of the land and, if a leasehold estate is submitted to condominium, an identification of the lease.

(d) An identification of each unit by letter, name, or number, or combination thereof, so that no unit bears the same designation as any other unit.

(e) A survey of the land which meets the minimum technical standards set forth by the Board of Professional Surveyors and Mappers, pursuant to s. 472.027, and a graphic description of the improvements in which units are located and a plot plan thereof that, together with the declaration, are in sufficient detail to identify the common elements and each unit and their relative locations and approximate dimensions. Failure of the survey to meet minimum technical standards shall not invalidate an otherwise validly created condominium. The survey, graphic description, and plot plan may be in the form of exhibits consisting of building plans, floor plans, maps, surveys, or sketches. If the construction of the condominium is not substantially completed, there shall be a statement to that effect, and, upon substantial completion of construction, the developer or the association shall amend the declaration to include the certificate described below. The amendment may be accomplished by referring to the recording data of a survey of the condominium that complies with the certificate. A certificate of a surveyor and mapper authorized to practice in this state shall be included in or attached to the declaration or the survey or graphic description as recorded under s. 718.105 that the construction of the improvements is substantially complete so that the material, together with the provisions of the declaration describing the condominium property, is an accurate representation of the location and dimensions of the improvements and so that the identification, location, and dimensions of the common elements and of each unit can be determined from these materials. Completed units within each substantially completed building in a condominium development may be conveyed to purchasers, notwithstanding that other buildings in the condominium are not substantially completed, provided that all planned improvements, including, but not limited to, landscaping, utility services and access to the unit, and common-element facilities serving such building, as set forth in the declaration, are first completed and the


declaration of condominium is first recorded and provided that as to the units being conveyed there is a certificate of a surveyor and mapper as required above, including certification that all planned improvements, including, but not limited to, landscaping, utility services and access to the unit, and common-element facilities serving the building in which the units to be conveyed are located have been substantially completed, and such certificate is recorded with the original declaration or as an amendment to such declaration. This section shall not, however, operate to require development of improvements and amenities declared to be included in future phases pursuant to s. 718.403 prior to conveying a unit as provided herein. For the purposes of this section, a "certificate of a surveyor and mapper" means certification by a surveyor and mapper in the form provided herein and may include, along with certification by a surveyor and mapper, when appropriate, certification by an architect or engineer authorized to practice in this state. Notwithstanding the requirements of substantial completion provided in this section, nothing contained herein shall prohibit or impair the validity of a mortgage encumbering units together with an undivided interest in the common elements as described in a declaration of condominium recorded prior to the recording of a certificate of a surveyor and mapper as provided herein.

(f) The undivided share of ownership of the common elements and common surplus of the condominium that is appurtenant to each unit stated as a percentage or a fraction of the whole. In the declaration of condominium for residential condominiums created after April 1, 1992, the ownership share of the common elements assigned to each residential unit shall be based either upon the total square footage of each residential unit in uniform relationship to the total square footage of each other residential unit in the condominium or on an equal fractional basis.

(g) The percentage or fractional shares of liability for common expenses of the condominium, which, for all residential units, must be the same as the undivided shares of ownership of the common elements and common surplus appurtenant to each unit as provided for in paragraph (f).

(h) If a developer reserves the right, in a declaration recorded on or after July 1, 2000, to create a multicondominium, the declaration must state, or provide a specific formula for determining, the fractional or percentage shares of liability for the common expenses of the association and of ownership of the common surplus of the association to be allocated to the units in each condominium to be operated by the association. If the declaration as originally recorded fails to so provide, the share of liability for the common expenses of the association and of ownership of the common surplus of the association allocated to each unit in each condominium operated by the association shall be a fraction of the whole, the numerator of which is the number "one" and the denominator of which is the total number of units in all condominiums operated by the association.

(i) The name of the association, which must be a corporation for profit or a corporation not for profit.

(j) Unit owners' membership and voting rights in the association.

(k) The document or documents creating the association, which may be attached as an exhibit.

(l) A copy of the bylaws, which shall be attached as an exhibit. Defects or omissions in the bylaws shall not affect the validity of the condominium or title to the condominium parcels.

(m) Other desired provisions not inconsistent with this chapter.

(n) The creation of a nonexclusive easement for ingress and egress over streets, walks, and other rights-of-way serving the units of a condominium, as part of the common elements necessary to


provide reasonable access to the public ways, or a dedication of the streets, walks, and other rights-of-way to the public. All easements for ingress and egress shall not be encumbered by any leasehold or lien other than those on the condominium parcels, unless:

1. Any such lien is subordinate to the rights of unit owners, or

2. The holder of any encumbrance or leasehold of any easement has executed and recorded an agreement that the use-rights of each unit owner will not be terminated as long as the unit owner has not been evicted because of a default under the encumbrance or lease, and the use-rights of any mortgagee of a unit who has acquired title to a unit may not be terminated.

(o) If timeshare estates will or may be created with respect to any unit in the condominium, a statement in conspicuous type declaring that timeshare estates will or may be created with respect to units in the condominium. In addition, the degree, quantity, nature, and extent of the timeshare estates that will or may be created shall be defined and described in detail in the declaration, with a specific statement as to the minimum duration of the recurring periods of rights of use, possession, or occupancy that may be created with respect to any unit.

ARTICLES AND BYLAWS OF A CONDOMINIUM ASSOCIATION

Textbook page 595

The operation of the association shall be governed by the articles of incorporation if the association

is incorporated, and the bylaws of the association, which shall be included as exhibits to the

recorded declaration. Fla. Stat. §718.112.

Dispute Resolution

Florida requires that disputes involving title to a unit or common element, interpretation or

enforcement of warranties, or fees or assessments go to mandatory non-binding arbitration through

the Division of Florida Land Sales, Condominiums, and Mobile Homes of the Department of

Business and Professional Regulation before proceeding to court. Fla. Stat. § 718.1255.

COOPERATIVE

Textbook page 599

The Cooperative is not a popular form of ownership in Florida. Liability and tax issues make

condominium ownership more appealing to most. Additionally, the condominium association is

able to exercise more comprehensive authority. See generally, Chapter 719, Florida Statutes.

TIME-SHARES

Textbook page 600

This is a common form of ownership because of Florida’s popularity as a tourist destination. Laws

governing time-shares are codified in Fla. Stat. § 721.01, et. seq. Vacation club time-share plans

require exhaustive public offering statement disclosures. Fla. Stat. § 721.551.


CHAPTER 18 - LEASES

COMMON LAW AND LEASES

Textbook page 628

Florida’s Landlord and Tenant Act is divided into three parts: (1) non-residential tenancies; (2)

residential tenancies; and (3) self-service storage spaces. See generally, Chapter 83, Florida

Statutes.

OBLIGATION OF REPAIR

Textbook page 637

The relative obligations of the landlord and tenant to maintain the premises are set forth in Fla. Stat.

§83.51 and §83.52, respectively.

Florida State Supplement€¦ · CHAPTER 10 LEGAL ASPECTS OF REAL ESTATE FINANCE 25 Usury 25...

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