Practical Real Estate Law
Total Page：16
File Type：pdf, Size：1020Kb
Practical Real Estate Law
Fourth Edition
By Daniel Hinkel
Florida State Supplement
By Bob Diotalevi
1 Contents
CHAPTER 1 INTRODUCTION TO THE LAW OF REAL PROPERTY 6 Laws that Govern Real Property Transactions 6 Water Rights 6 Fixtures 6 Adverse Possession 7 Modern-Day Estates in Real Property 8 Life Estate 8
CHAPTER 2 CONCURRENT OWNERSHIP 9 Types of Concurrent Ownership 9 Tenancy in Common 9 Rights, Duties, and Liabilities of the Common Owners 9 Dower and Curtesy 9 Elective Share 9 Concurrent Ownership and the Role of the Legal Assistant 9
CHAPTER 3 SURVEYS AND LAND DESCRIPTIONS 11 Government Rectangular Survey Description 11 Platted Description 11
CHAPTER 4 PUBLIC REGULATION AND ENCUMBRANCES 12 Zoning 12 Environmental Protection Laws 12 Radon and Lead-Based Paint 12 Power of Eminent Domain 14 Judgment Liens 14 Mechanics’ and Materialmen’s Liens 14 Other Mechanics’ and Materialmen’s Lien Considerations 15
CHAPTER 5 EASEMENTS AND LICENSES 16
2 Easements 16 Prescriptive Easements 18 Easement By Necessity 20 Licenses 20 CHAPTER 6 CONTRACTS 21 Minors or Infants 21 Personal Representatives 21 Consideration 21 Written Agreements 21 Specific Performance 21 Liquidated Damages 21 Real Estate Broker 26
CHAPTER 7 PREPARATION AND REVIEW OF A REAL ESTATE CONTRACT 27 The Parties 27 Condition of the Property and Risk of Loss 27 Survival 27
CHAPTER 8 DEEDS 28 General Warranty Deed 28 Limited (Special) Warranty Deed 30 Quitclaim Deed 31 Written Instrument 33 Signature of the Grantor 33 Witnesses of Deeds 33
CHAPTER 9 FINANCING SOURCES IN REAL ESTATE TRANSACTIONS 34 Sources of Mortgage Loans 34 Permanent and Construction Loans 34
CHAPTER 10 LEGAL ASPECTS OF REAL ESTATE FINANCE 35 Usury 35 Execution 35
3 Mortgages, Deeds of Trust, and Security Deeds 35 Cancellation or Satisfaction of Mortgage 35 Types of Foreclosure 36 Effect of a Valid Foreclosure Sale 39 Debtor’s Remedies or Defenses to Foreclosure 39
4 CHAPTER 11 MORTGAGE FORMS AND PROVISIONS 40 Residential Mortgage Provisions 40 Hazardous Wastes 40
CHAPTER 12 TITLE EXAMINATIONS 41 Bona Fide Purchaser For Value Rule 41 Constructive Notice 41 Recording Statutes 41 Grantee and Grantor Indices 41 Plat Index 41 Name Variances 41 Mechanics’ and Materialmen’s Liens 41
CHAPTER 13 TITLE INSURANCE 42 Title Insurance (Opening Section) 42 Practice Tips for the Preparation and Review of a Title Insurance Commitment 42
CHAPTER 14 REAL ESTATE CLOSINGS 43 The Environment 43 Reviewing the Real Estate Contract 43 Obtaining the Termite Clearance Letter or Bond 44
CHAPTER 15 GOVERNMENT REGULATION OF REAL ESTATE CLOSINGS 45
CHAPTER 16 REAL ESTATE CLOSING FORMS AND EXAMPLES 46 Deeds 46
CHAPTER 17 CONDOMINIUMS AND COOPERATIVES 47 Condominium 47 Birth of a Condominium 47 Articles and Bylaws of a Condominium Association 50 Cooperative 50 Time-Shares 50
5 CHAPTER 18 LEASES 52 Common Law and Leases 52 Damage or Destruction to the Premises 52 Obligation of Repair 52 Memorandum of Lease 52
6 CHAPTER 1 INTRODUCTION TO THE LAW OF REAL PROPERTY
LAWS THAT GOVERN REAL PROPERTY TRANSACTIONS
Textbook page 2
Real property transactions are governed by extensive statutory guidelines. Years ago some people lost large sums of money on bogus land deals. Today, some of that same “swamp land” is highly desirable waterfront property, worth more than those early swindlers ever dreamed about. Disclosure requirements make it difficult for land swindles to occur today. F. S. Chapters 689 (conveyances of land and declarations of trusts) and 695 (record of conveyances of real estate).
WATER RIGHTS
Textbook page 3
Water which was not navigable in 1845 (when Florida became a state) is not owned by the State, and therefore, not subject to state restrictions. Picciolo v. Jones, 534 So.2d 875 (Fla. 3d DCA 1988) (artificially created canal not navigable at law, 534 50.2d at 877-78).
Sears, Roebuck & Co. v. Bay Bank & Trust Co. provides a good discussion of the three-part test used in Florida.
FIXTURES
Textbook page 5
See the following case pertaining to fixtures.
Sears, Roebuck & Co. v. Bay Bank & Trust Co., 537 So.2d 1041 (Fla. 1st DCA 1989).
Appellant (Sears) challenges the trial court’s finding that certain household appliances are fixtures rather than personalty. Sears entered into a sales contract with Greg Peaden, Inc. (Peaden), under which Sears sold Peaden 60 Kenmore appliances for installation in a condominium project named “Bahama West” that Peaden was developing. Sears perfected a purchase money security interest in the appliances. A month or so prior thereto, Peaden had entered into a construction mortgage with appellee (Bay Bank) which included among its terms a provision that the mortgage covered any fixtures in the condominium units. Peaden defaulted on both the mortgage and the appliance sales agreement. Bay Bank filed the instant mortgage foreclosure suit which resulted in a final judgment of foreclosure against Peaden. The trial court reserved jurisdiction to determine whether the lien of Bay Bank’s mortgage extended to the
7 appliances sold by Sears. Pursuant to an evidentiary hearing, the trial court entered the subject appealed order finding that the appliances had become fixtures and that Bay Bank’s mortgage lien therefore took priority over Sears’ security interest. We affirm in part and reverse in part.
The question of whether property is personalty or fixtures is a question of fact for determination by the trier of fact, and the issue in the appellate court is whether competent, substantial evidence supports the trial court’s ruling. First Federal Savings & Loan Association v. Stovall, 289 So.2d 32 (Fla. 1st DCA 1974).
This court has embraced the three-part test set forth in Commercial Finance Co. v. Brooksville Hotel Co., 98 Fla. 410, 123 So. 814 (1929), for determining whether an object is a fixture. Strickland’s Mayport, Inc. v. Kingsley Bank, 449 So.2d 928 (Fla. 1st DCA 1984).
Except for the built-in-the-wall air conditioner units, our review of the evidence persuades us that there is no competent substantial evidence to support the conclusion that these appliances— refrigerators, ranges, range hoods, and dishwashers—were fixtures.
Accordingly, we affirm in part and reverse and remand in part for further proceedings not inconsistent with this opinion.
ADVERSE POSSESSION
Textbook page 7
The possession must last for 7 years, with or without color of title. F.S. 95.12 (real property actions) and F.S. 95.16 (adverse possession under color of title). All other requirements are the same.
Under color of title, according to F.S. 95.16(2):
For the purpose of this section, property is deemed possessed in any of 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
8 (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
According to the language of F.S. 95.18(2), those claiming adverse possession without color of title must show one (1) of the following regarding the property:
(a) When it has been protected by substantial enclosure
(b) When it has been usually cultivated or improved
A successful suit to quiet title would provide the owner with an insurable title.
MODERN-DAY ESTATES IN REAL PROPERTY Textbook page 9
All six types of estates are recognized in Florida. Fee simple determinable and fee simple on condition subsequent are not used very frequently because of statutory restrictions.
LIFE ESTATE
Textbook page 11
The life estate owner must pay all property taxes.
9 CHAPTER 2 CONCURRENT OWNERSHIP
TYPES OF CONCURRENT OWNERSHIP
Textbook page 18
Joint tenancy with right of survivorship, tenancy in common, and tenancy by the entirety are the only recognized forms of concurrent ownership.
TENANCY IN COMMON
Textbook page 19
If no joint ownership interest is stated it is deemed to be a tenancy in common. F.S. 689(15).
RIGHTS, DUTIES, AND LIABILITIES OF THE COMMON OWNERS
Textbook page 19
The common owner would be entitled to a credit for the amount in excess of his or her share upon the sale of the property. Fischer v. Fischer, 503 So.2d 399 (Fla. 3d DCA 1987).
DOWER AND CURTESY
Textbook page 23
The concepts of dower and curtesy have been statutorily abolished. F.S. 732.11.
ELECTIVE SHARE
Textbook page 23
The elective share of 30% applies to either the husband or wife. F.S. 732.201 (right to elective share of surviving spouse) and 732.207.
CONCURRENT OWNERSHIP AND THE ROLE OF THE LEGAL ASSISTANT
Textbook page 29
The following is a discussion of tasks that are permissible for a nonlawyer to handle:
Ethics: Unauthorized Practice of Law
Textbook page 31
In Florida, according to various ethical opinions, here are some tasks which nonlawyer employees may or may not be involved in:
1. They may be delegated only mechanical, clerical, or administrative duties that do not
10 require the attorney’s personal judgment and participation (Fla. Ethics Op. 70-62);
2. They may not take depositions for a firm nor engage in any work that constitutes the practice of law (Fla. Ethics Op. 73-41);
3. They may not sign pleadings for the attorney (Fla. Ethics Op. 87-11);
4. They may handle a real estate closing if certain conditions are met:
An attorney must supervise and review all the work completed before the closing.
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.
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.
The supervising attorney must be readily available, in person or by telephone, to provide legal advice or answer legal questions if the need arises.
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).
5. They may conduct initial interviews under certain circumstances (Fla. Ethics Op. 88-6); and
6. They may not handle negotiations with insurance adjusters for an attorney (Fla. Ethics Op. 74-35).
11 CHAPTER 3 SURVEYS AND LAND DESCRIPTIONS
GOVERNMENT RECTANGULAR SURVEY DESCRIPTION
Textbook page 39
The government rectangular survey system is not the only form of description used in Florida. Both plats and metes and bounds description are used.
PLATTED DESCRIPTION
Textbook page 43
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.
12 CHAPTER 4 PUBLIC REGULATION AND ENCUMBRANCES
ZONING
Textbook page 67
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. F.S. 163.3161-3246.
ENVIRONMENTAL PROTECTION LAWS
Textbook page 68
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 72
A sample Agreement and Release Concerning Radon Gas is shown in Exhibit 4–1.
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.
13 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
14 (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 72
The Florida Supreme Court ruled in Joint Ventures, Inc. v. Department of Transportation, 563 So.2d 622 (Fla. 1990), that two sections of a Florida statute were unconstitutional in that they permitted the state to take private property without just compensation. The specific sections held unconstitutional were 337.241(2) and (3), Fla.Stat. (1987). This case restates the well-established test involving eminent domain. The state must pay the property owner under two circumstances. The first is when it confiscates private property for common use. The second is when it regulates private property under its police power in that the owner is deprived of economic viability of the property. Eminent domain involves the taking of property, and police power involves only the
15 regulation of that property.
JUDGMENT LIENS
Textbook page 74
A judgment lien on property is good for 7 years from the date of the recording. F.S. 55.10(1).
MECHANICS’ AND MATERIALMEN’S LIENS
Textbook page 74
Guidelines to establish mechanics’ and materialmen’s liens are provided in F.S. Chapter 713.
OTHER MECHANICS’ AND MATERIALMEN’S LIEN CONSIDERATIONS
Textbook page 75
A mechanics’ lien must be filed within 90 days after the final furnishing of the labor, services, or materials in order for it to be valid. F.S. 713.08(5).
16 CHAPTER 5 EASEMENTS AND LICENSES
See, generally, F.S. 704 et al.
EASEMENTS
Textbook page 96
See the following case for a good discussion of easements in Florida.
Parham v. Reddick, 537 So.2d 132 (Fla. 1st DCA 1988).
Appellants Robert M. and Jo Ann Parham (the Parhams) appeal a final summary judgment denying their action for damages in trespass. Appellees Ervin and Marjorie Reddick and Gerald and Vickie McQuinney appeal an order denying their motion for attorney’s fees. The issues raised on appeal are (1) whether a statutory way of necessity exists where a common law way of necessity is already in existence, (2) whether the party claiming the statutory way of necessity bears the burden to establish that a common law way of necessity exists, (3) whether a party seeking a way of necessity may elect one of various alternative routes, and (4) whether denial of damages for trespass is an implicit recognition of the existence of a statutory way of necessity. The issue on cross-appeal is whether the action in trespass is so lacking in merit that appellees are entitled to an award of attorney’s fees pursuant to section 57.105, Florida Statutes. We affirm in part, and reverse in part.
This case involves a dispute between adjacent landowners concerning a way of necessity from appellees’ property across appellants’ property to a public road. ***
As affirmative defenses, the Reddicks and McQuinneys, appellees, asserted establishment of a prescriptive easement based on more than 20 years use, estoppel, and way of necessity. In addition, appellees counterclaimed. ***
The trial court granted appellees’ second motion for summary final judgment, reasoning that
It is clear from the undisputed facts that it is absolutely necessary for the Defendant to cross property belonging to others in order to get to the Defendant’s mobile home site, and that the Defendant has no legal right of way across such property. The necessity precludes damages for trespass.***
The provisions concerning implied easements are set forth in section 704.01, Florida Statutes, ***.
With regard to the first issue raised in this appeal, the principle is well settled that a statutory way
17 of necessity comes into existence only if no other access exists by common law implication. Ganey v. Byrd, 383 So.2d 652 (Fla. 1st DCA 1980); Reyes v. Perez, 284 So.2d 493, 495 (Fla. 4th DCA 1973). See also Perkins v. Anderson, 518 So.2d 1354 (Fla. 1st DCA 1988). In other words, where an implied common law way of necessity exists, the subsection (b) statutory way of necessity does not exist, because the reportedly landlocked lands are not, in fact, hemmed in.***
Furthermore, easements created by necessity have the implied purpose to make possible the use of the dominant land, and therefore will terminate when the necessity for their existence disappears. Fox Investments v. Thomas, 431 So.2d 1021, 1022 (Fla. 2d DCA 1983). For example, a common law way of necessity will expire when the owner of the dominant estate acquires adjoining property which provides access to a public or private road. Id. By the same token, the fact that a landlocked owner only enjoyed a common law way of necessity, which subsequently terminated, will not bar a statutory way of necessity to the same landlocked owner in appropriate circumstances.***
With regard to the third issue, that is, a choice between various alternative routes, it is well-settled that a claimant to an easement by necessity “is not entitled to an option or an election as between several adequate means of access even though one means of access may be more convenient than another.” Matthews v. Quarles, 504 So.2d 1246, 1248 (Fla. 1st DCA 1986). ***
Therefore, in the case of a statutory way of necessity, the only recourse available to the servient owner of an implied easement is a suit for compensation pursuant to section 704.04, Florida Statutes. Sapp v. General Development Corp., 472 So.2d 544, 546 (Fla. 2d DCA 1985). ***
The record in the instant case demonstrates that, as a practical matter, appellees who are landlocked have either a common law or a statutory way of necessity. In fact, the appellees’ situation meets all of the section 704.01(2) elements essential for a statutory way of necessity, save one—proof of the nonexistence of a common law way of necessity. Therefore, on this record, the trial court could not grant a statutory way of necessity, because no evidence was present to show that a common law way of necessity is not available to appellees. Application of the Sapp rationale to the facts of this case further eradicates that the way of necessity did not come into existence by virtue of a judicial determination. Rather, an implied easement exists due to the landlocked nature of the property. The precise nature of the easement depends upon the existence vel non of a common law way of necessity. Thus, a judicial determination is relevant with respect to determining the nature of the easement, which in turn implicates the matter of compensation to the servient owner. 704.04, Fla.Stat. (1985).
18 In light of the foregoing, we find we must reverse the trial court’s grant of final summary judgment. Although the record demonstrates that appellees require an easement for access to and enjoyment of their property, appellees are not entitled to summary judgment because they failed to prove that they have no common law right of access. However, we affirm the issue raised on cross appeal, since in the circumstances of this case, we do not consider the appellant’s claim for damages for trespass is frivolous. ***
PRESCRIPTIVE EASEMENTS
Textbook page 100
Prescriptive easements may be acquired by 20 uninterrupted years of adverse use of the easement, according to the courts.
Supal v. Miller, 455 So.2d 593 (Fla. 5th DCA 1984).
CTA11-ALL–So.2d 593
FRANK D. UPCHURCH, Jr., Judge.
This is an appeal from a final order enjoining Leon and Cynthia Supal from closing a road on their property. The road runs along the southern perimeter of the Supal’s property in Marion County, from Highway 301 on the east to Summerfield Road, a county road, on the west. Appellees own lots along the south side of the road from Highway 301 to approximately the midway point and use the road to get to Highway 301 and Summerfield Road.
Appellees sued to prevent the Supals from closing the road, claiming a prescriptive easement. Prior to trial it was agreed that appellees were not seeking a public easement but rather a private prescriptive easement. The court found that the road had been in continuous use for more than 20 years and enjoined the Supals’ from closing it. The court also ordered that the road be kept open to the public. We reverse.
In Downing v. Bird, 100 S.2d 57 (Fla.1950), the Supreme Court held that to establish a prescriptive easement, a claimant must allege and prove by clear and positive proof, the following elements: 1) actual, continuous, uninterrupted use by the claimant for the full prescriptive period which is 20 years; 2) that the use be adverse under claim of right and either be with the actual knowledge of the owner or so open, notorious, and visible that knowledge of the use is imputed to the owner; 3) that such use be inconsistent with the owner’s use and enjoyment of his land and must not be a permissive use; and 4) that such use be related to a certain limited and defined area of land, or if for a right-of-way, the use be of a definite route with a reasonably certain line,
19 width, and termini. See also Crigger v. Florida Power Corp., 436 So.2d 937 (Fla. 5th DCA 1983); Guerard v. Roper, 385 So.2d 718 (Fla. 5th DCA 1980).
[1] A claimant for a prescriptive easement must have continuously used the easement for the full prescriptive period. See Downing v. Bird. Florida cases have not extensively discussed the application of tacking principles to prescriptive easements, but they clearly indicate tacking can be used to establish a prescriptive easement. For instance, in J.C. Vereen & Sons, Inc. v. Houser, 123 Fla. 641, 167, So. 45, 48 (1936), the Supreme Court found no prescriptive easement where the claimant could not show that he or “his predecessors in title” exercised use of the plaintiff’s property for the prescribed period. In Guerard v. Roper, this court, while finding that a prescriptive easement had not been established because of insufficient evidence of adverse use, did find as an initial matter that the claimant “and his predecessors in title have used the roadway” for over twenty years, thus satisfying the continuing use requirement. 385 So.2d at 720. In Orange Blossom Hills, Inc. v. Kearsley, 299 So.2d 75,76 (Fla. 1st DCA 1974), the First District upheld the finding of a prescriptive easement where the evidence showed that “the [claimants] and their predecessors in title, as well as the public in general, had created a prescriptive easement as a means of egress and ingress over the property of the defendants for a period in excess of 60 years.”
In this case, appellees testified they owned their respective lots since the early 1970s and used the roadway continuously since then. There was no evidence, however, as to who their predecessors in title were and whether such predecessors made use of the roadway in question to reach their property. Appellees basically relied on evidence of use of the roadway by the public for over 50 years to establish the 20-year continuous use requirement.
*595
[2][3]By this testimony that the road had been used by members of the public for the prescriptive period, appellees did not establish that they and their predecessors in title used the road for the required period. While it is true that in acquisition of a prescriptive easement, the use need not be exclusive and may be in common with the owner or the public, Hunt Land Holding Co. v. Schram, 121 So.2d 697 (Fla. 2d DCA 1960), the party claiming an easement by prescription must show that he has acquired it by his own use (or that of his predecessors in title) independent of others and he cannot make his right depend on the enjoyment of a similar right by others. 2 G. Thompson, Commentaries on the Modern Law of Real Property, S 343. To allow appellees to rely on use by members of the public to establish a private prescriptive easement would reduce the requirement of a twenty-year prescriptive period to a mockery.1
20 1Appellees’ reliance on Zetrouer v. Zetrouer, 89 Fla. 253, 103 So. 625 (1925) as supporting a finding of a private prescriptive easement in their behalf is misplaced. In Zetrouer, the claimant alleged that he and “his predecessor in title have used the road for more than 30 years.” The Supreme Court, in affirming the granting of an injunction to prevent obstruction of the road, declared:
The affidavits amply support the claim of continuous, uninterrupted use of the road by complainant and the public for more than 35 years. Where the common law obtains, 20-year continuous and uninterrupted use had always created a prescriptive right as well in the public as private individuals. 103 So. at 627. Unlike in Zetrouer, here appellees did not show continuous use by themselves and their predecessors in title for at least 20 years.
[4] This is not to say that no easement could have been found here. The proper course of action when confronted with long, continuous, and adverse use by the general public is to seek a public prescriptive easement.2 Florida cases clearly establish that the public, like private parties, can acquire an easement by prescription. See, for example, City of Daytona Beach v. Tona Rama, Inc., 294 So.2d 73 (Fla.1974); Downing v. Bird, 100 So.2d at 64; Zetrouer v. Zetrouer, 89 Fla. 253, 103 So. 625 (1925). However, here appellees stipulated that they were not trying to establish a public prescriptive easement. In addition, it is generally a legally organized political entity, such as a city or county, which represents the general public in establishment of a public prescriptive easement. 2 Fla.Jur.2d Adverse Possession S 54. See, for example, Pinellas County v. Roach, 160 Fla. 713, 36 So.2d 364 (1948); Genet v. City of Hollywood, 400 So.2d 787 (Fla. 4th DCA 1981); Lake County v. Gatch, 168 So.2d 81 (Fla. 2d DCA 1964); Sumter County v. Brown, 123 So.2d 263 (Fla. 2d DCA 1960), cert. denied, 127 So.2d 679 (Fla.1961); Berger v. City of Coral Gables, 101 So.2d 396 (Fla. 3d DCA 1958).
REVERSED.
COBB, C.J., and DAUKSCH, J., concur.
EASEMENT BY NECESSITY
Textbook page 104
Easements by necessity have been statutorily created by F.S. 704.01 (1) (implied grant of way of necessity), 704.01(2) statutory way of necessity exclusive of common-law right) and 704.04 (judicial remedy and compensation to servient owner). Once again see Parham v. Reddick discussed previously.
LICENSES
Textbook page 104
It is sometimes difficult to distinguish in the parties’ minds between a license and an easement,
21 even though a license is revocable at any time.
2For purposes of clarification, we do not hold that adverse use was shown here. Rather, because appellees failed to establish the element of continuous use, we do not address the remaining elements necessary for establishment of a prescriptive easement.
22 CHAPTER 6 CONTRACTS
MINORS OR INFANTS
Textbook page 144
A minor is anyone under the age of 18.
PERSONAL REPRESENTATIVES
Textbook page 113
A personal representative must have both a court order and a consent from heirs entitled to inherit in an intestate estate in order to transfer property and provide good title which will not be the subject of challenge at a later date.
CONSIDERATION
Textbook page 118
Consideration may be money, something of value, or love and affection. However, the last form of consideration may cause difficulty in cases of undue influence.
WRITTEN AGREEMENTS
Textbook page 118
The Statute of Fraud requirements for real estate transactions can be found at F.S. 689.01 (how real estate conveyed).
SPECIFIC PERFORMANCE
Textbook page 119
A suit for specific performance may be brought by either the buyer or seller.
LIQUIDATED DAMAGES
Textbook page 120
A breach is required in order to bring suit for liquidated damages. However, recovery of this type can never be guaranteed. Florida’s real estate market fluctuates too much to assume this is a given.
Lefemine v. Baron, 573 So.2d 326 (Fla. 1991)
23 Daniel and Catherine Lefemine entered into a real estate contract to purchase a residence form Judith W. Baron for $385,000. The Lefemines were unable to obtain financing and sued Baron for return of their $38,500 deposit. Baron counterclaimed to retain the deposit money as liquidated damages pursuant to the default provision in the contract. The broker, S & N Kurash, Inc., cross- claimed against Baron for one-half of any recovery on the counterclaim. The trial court found that (1) the Lefemines defaulted under the terms of the contract, (2) the default provision in the contract was a bona fide liquidated damages clause, and (3) the amount of damages, the $38,500 deposit, was not unconscionable. Thus, the court ruled in favor of Baron on her counterclaim and in favor of the broker on his cross-claim, finding each to be entitled to one-half of the $38,500 deposit.
The Fourth District Court of Appeal affirmed the judgment, concluding that the default provision was enforceable and that the amount forfeited was not unconscionable. The court rejected the conflicting rationale of the Third District Court of Appeal in Cortes.
[1] The issue before this Court is whether the default provision in the real estate contract was enforceable as a liquidated damages clause or was an unenforceable penalty clause. The default provision reads as follows:
1. DEFAULT BY BUYER: If Buyer fails to perform the Contract within the time specified, the deposit(s) made or agreed to be made by Buyer may be retained or recovered by or for the account of the Seller as liquidated damages, consideration for the execution of the Contract and in full settlement of any claims; whereupon all parties shall be relieved of all obligations under the Contract; * 328 or Seller, at his option, may proceed at law or in equity to enforce his rights under the Contract.
[2] It is well settled that in Florida the parties to a contract may stipulate in advance to an amount to be paid or retained as liquidated damages in the event of a breach. Poinsettia Dairy Prods. V. Wessel Co., 123 Fla. 120, 166 So. 306 (1936); Southern Menhaden Co. v. How, 71 Fla. 128, 70 So. 1000 (1916). In Hyman v. Cohen, 73 So.2d 393 (Fla.1954), this Court established the test as to when a liquidated damages provision will be upheld and not stricken as a penalty clause. First, the damages consequent upon a breach must not be readily ascertainable. Second, the sum stipulated to be forfeited must not be so grossly disproportionate to any damages that might reasonably be expected to follow from a breach as to show that the parties could have intended only to induce full performance, rather than to liquidate their damages.
[3] We agree with the court below that the forfeiture of the $38,500 deposit was not
24 unconscionable. The deposit represented only 10% of the purchase price and half of this had to be paid to the broker. The $38,500 was not so grossly disproportionate to any damages that might reasonably be expected to follow from a breach of the contract so as to show that the parties intended only to induce full performance. See Hooper v. Breneman, 417 So.2d 315 (Fla. 5th DCA 1982). The controversy in this case arises from the existence of the option granted to the seller either to retain the security deposit as liquidated damages or to bring an action at law for actual damages.
In Stenor, Inc. v. Lester, 58 So.2d 673 (Fla.1951), this Court held that a lease provision which gave the lessor an option either to retain the deposit as liquidated damages or to apply it pro tanto against his actual damages constituted a penalty clause rather than an enforceable liquidated damages clause. Accord Glynn v. Roberson, 58 So.2d 676 (Fla.1952).
The following year in Kanter v. Safran, 68 So.2d 553, 562 (Fla.1953), this Court invalidated a lease provision which permitted the lessor to retain the security deposit upon the lessee’s breach and further provided that the lessor “may call upon the lessee to respond for any existing damages, should the actual damages exceed the amount of the security fund.” We stated:
It is apparent that the parties to the lease agreement in the instant case did not intend to liquidate their damages by stipulating for the forfeiture of the deposit upon cancellation of the lease by the lessor for the default of the lessee.
Paragraph (b), supra, expressly states that the lessors “may call upon the lessee to respond for any existing damages, should the actual damages exceed the amount of the security fund * * *.” Under such circumstances, the provision of forfeiture cannot be sustained as a provision for liquidated damages. See Stenor, Inc., v. Lester, Fla., 58 So.2d 673.
Kanter, 68 So.2d at 562.
In Pappas v. Deringer, 145 So.2d 770 (Fla. DCA 1962), the Third District Court of Appeal considered a provision which gave the lessor the option of retaining the security deposit as liquidated damages if the lessee defaulted. The court first reasoned that except for the option which was granted to the lessor, this provision met the two-prong test of Hyman for a valid liquidated damages clause. The court then observed:
[W]hat is the effect of the option of the lessor? If the lessor failed to exercise his option, the lessee would be entitled to receive all of the unrefunded deposit; but he would at the same time be liable for the actual damages. It stands to reason that the option would be exercised unless the actual damages were greater than the security deposit. Thus the lessee is in the position of being
25 liable to lose the security deposit or pay the actual damages, whichever is greater.
Pappas, 145 So.2d at 772. The court held:
[A]n option granted to the lessor to either take the stipulated amount (security deposit) as damages or to refuse to be limited by that amount and thus become entitled to a greater amount of damages, *329 destroys the character of the forfeiture as agreed damages and the forfeiture becomes a penalty.
Id. at 773.
This principle was first applied to a real estate sales contract in Cortes.1 The default clause, which was almost identical to that involved in the instant case, read as follows:
Q. DEFAULT: If buyer fails to perform this contract within the time specified, the deposit paid by the buyer may be retained by or for the account of seller as consideration for the execution of this agreement and in full settlement of any claims for damages, and all obligations under this contract or seller at his option may proceed at law or in equity to enforce his legal rights under this contract.
Cortes, 494 So.2d at 524. The court reversed the award of the deposit as liquidated damages upon the authority of its earlier decision in Pappas.
Baron contends that Cortes is distinguishable because it was decided upon the reasonable disparity in remedy alternatives available to sellers and buyers, while in this case no disparity exists between the seller and buyers. This argument is grounded upon a reference to the lack of mutuality contained in the Cortes opinion as well as in some of the other cases discussed in this opinion.2 However, we do not read Cortes or any of the prior cases in which the term “mutuality” appears as meaning that an option by one party either to retain the deposit or seek actual damages is enforceable whenever the other party also has a right to choose remedies.3 Rather, we interpret these opinions to mean that the existence of the option reflects that the parties did not have the mutual intention to stipulate to a fixed amount as their liquidated damages in the event of a breach.4
1The difference between a real estate sales contract and a lease does not affect the analysis of whether a given liquidated damages clause is valid under general principles of law pertaining to contracts and damages.
2 Significantly, none of these cases even discussed the contractual remedies which may have been available to the other
26 party.
3 We recognize that a lack of mutuality of remedies between the parties may be a separate reason why a court may refuse to enforce a default provision of a contract. See Blue Lakes Apartments, Ltd. V. George Gowing, Inc., 464 So.2d 705 (Fla. 4thDCA 1985).
4 See Aron and Perry, Default Provisions in Contracts for the Sale of Real Property, 61 Fla. B.J. 109 (1987), in which the authors make a similar analysis of the Cortes opinion.
27 We also disagree with Baron’s argument that this Court’s decision in Hutchison v. Tompkins, 259 So.2d 129 (Fla.1972), is controlling. We reviewed the decision in Hutchison v. Tompkins, 240 So.2d 180 (Fla. 4th DCA 1970), to resolve a conflict with this Court’s prior opinion in Hyman. Under the rationale of the Fourth District Court of Appeal, a liquidated damages clause would constitute a penalty if the damages were readily ascertainable at the time of breach, regardless of whether the damages were not ascertainable at the time the contract was executed. By contrast, in Hyman this Court had decided that in order for a liquidated damages clause to be construed as a penalty it was necessary for the damages to be readily ascertainable at the time of the drawing of the contract. In Hutchison we reaffirmed the validity of the Hyman rationale and held that the liquidated damages clause could stand if the damages were not readily ascertainable at the time of the drawing of the contract. While it appears that the forfeiture clause in Hutchison gave the seller the option to retain the deposit as liquidated damages, the effect of the existence of the option was not an issue in the case.
The reason why the forfeiture clause must fail in this case is that the option granted to Baron either to choose liquidated damages or to sue for actual damages indicated the intent to penalize the defaulting buyer and negates the intent to liquidate damages in the event of a breach. The buyer under a liquidate damages provision *330 with such an option is always at risk for damages greater than the liquidated sum. On the other hand, if the actual damages are less than the liquidated sum, the buyer is nevertheless obligated by the liquidated damages clause because the seller will take the deposit under that clause. Because neither party intends the stipulated sum to be the agreed-upon measure of damages, the provision cannot be a valid liquidated damages clause.
The decision we reach today is in harmony with authorities from other jurisdictions. Real Estate World, Inc. v. Southeastern Land Fund, Inc., 137 Ga.App. 771,224 S.E.2d 747 (Ct.App.1976), overruled on other grounds, Mock v. Canterbury Realty Co., 152 Ga.App. 872, 264 S.E.2d 489 (Ct.App. 1980); Jarro Bldg. Indus. Corp. v. Schwartz, 54 Misc.2d 13, 281 N.Y.S.2d 420 (App. Term 1967); Dalston Constr. Corp. v. Wallace, 26 Misc.2d 698, 214 N.Y.S.2d 191 (Dist.Ct.1960). In J. Calamari and J. Perillo, The Law of Contracts S 14-32, at 645 (3d ed., 1987), the authors state:
S 14-32. Two Pitfalls of Draftsmanship:
The Shotgun Clause and the Have Cake and Eat It Clause:
. . . .
28 Another pitfall into which contract draftsmen have plunged involves an attempt to fix damages in the event of a breach with an option on the part of the aggrieved party to sue for such additional actual damages as he may establish. These have been struck down as they do not involve a reasonable attempt to definitively estimate the loss.
See also Comment, Liquidated Damages: A Comparison of the Common Law and the Uniform Commercial Code, 45 Fordham L.Rev. 1349, 1367-68 (1977).
We hold that the default provision in the subject contract was not enforceable as a liquidated damages clause. The provision constituted a penalty as a matter of law because the existence of the option negated the intent to liquidate damages.5 We quash the following decision with directions to remand the case for a trial on the actual damages incurred by Baron as a result of the breach of contract.
It is so ordered.
SHAW, C.J., and OVERTON, EHRLICH, BARKETT and KOCAN, JJ., concur.
McDONALD, J., dissents.
REAL ESTATE BROKER
Textbook page 123
A real estate salesperson must be over 18 and a resident of Florida. She/he can only sue his/her broker for recovery of commission. The real estate agent or broker must clearly designate whether she/he is acting in the capacity of a buyer’s agent or seller’s agent. This disclosure must be made at the first substantive contact. F.S. 475.17 (qualifications to practice) and F.S. 475.278 (authorized brokerage relationships).
5 We express no opinion with respect to whether the same result would occur if the Uniform Commercial Code were applicable to this transaction, nor do we imply that a liquidated damages clause which merely provided the option of pursuing equitable remedies would be unenforceable. See J. Calamari and J. Perillo, The Law of Contracts S 14-33, at 645 (3d ed. 1987); Comment, Liquidated Damages: A Comparison of the Common Law and the Uniform Commercial Code, 45 Fordham L.Rev. 1349, 1371-75 (1977).
29 CHAPTER 7 PREPARATION AND REVIEW OF A REAL ESTATE CONTRACT
THE PARTIES
Textbook page 137
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 145
The purchaser does bear the risk of loss unless otherwise stated in the contract. The standard Florida Bar and Florida Real Estate Commission Contract for Sale provides that the seller will repair the property or pass the proceeds from insurance coverage to the seller. Florida does not adhere to the Uniform Vendor and Purchaser’s Risk Act.
SURVIVAL
Textbook page 148
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.
30 CHAPTER 8 DEEDS
GENERAL WARRANTY DEED
Textbook page 204
See Exhibit 8–1 for an example of a General Warranty Deed.
EXHIBIT 8–1 A General Warranty Deed
[Leave 1.5 square inches of space for the clerk as required by F.S. 695.26(1)(e).] 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:
[Insert legal description]
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.
31 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 ______
32 LIMITED SPECIAL WARRANTY DEED
Textbook page 205
See Exhibit 8–2 for an example of a Limited (Special) Warranty Deed.
EXHIBIT 8–2 A Special Warranty Deed
[Leave 1.5 square inches of space for the clerk as required by F.S. 695.26(1)(e).] 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 ______.
[Insert legal description]
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]
33 Witness Grantor
34 (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 ______
QUITCLAIM DEED Textbook page 223
See Exhibit 8–3 for a sample quitclaim deed. It is referred to as a quitclaim deed as opposed to a release deed or bargain and sale deed.
35 EXHIBIT 8–3 Quitclaim Deed
[Leave 1.5 square inches of space for the clerk as required by F.S. 695.26(1)(e).] 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:
[Insert legal description] 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 ______
36 WRITTEN INSTRUMENT Textbook page 207
Today a deed need not contain any particular language in order to be valid.
SIGNATURE OF THE GRANTOR
Textbook page 208
Only the grantor is required to sign the deed. The grantee does not sign even if there is an assumption of the mortgage or if it involves the transfer of a condominium. F.S. 689.01 (how real estate conveyed).
WITNESSES OF DEEDS
Textbook page 208
A deed of conveyances of interests in excess of one (1) year must be witnessed by two people other than the grantor. The two witnesses, along with the grantor, must be competent. F.S. 689.01.
37 CHAPTER 9 FINANCING SOURCES IN REAL ESTATE TRANSACTIONS
SOURCES OF MORTGAGE LOANS
Textbook page 237
The information in this section regarding lending applies to Florida as lending is primarily regulated on a federal level.
PERMANENT AND CONSTRUCTION LOANS
Textbook page 241
The practice in Florida is to distribute moneys in increments during the course of construction, while retaining 10% to protect against cost overruns.
38 CHAPTER 10 LEGAL ASPECTS OF REAL ESTATE FINANCE
USURY
Textbook page 264
The maximum rate of interest in Florida is 18% per annum simple interest. However, if the amount loaned exceeds $500,000 the rate may exceed this ceiling. F.S. 687.03 (“unlawful rates of interest”).
EXECUTION
Textbook page 264
It is not required to record a note or attach a copy to the deed.
MORTGAGES, DEEDS OF TRUST, AND SECURITY DEEDS
Textbook page 266
The security interest is a mortgage. See the Florida mortgage contained within this chapter, Exhibit 10–5.
CANCELLATION OR SATISFACTION OF MORTGAGE
Textbook page 271
This case involves a father that alleged that his daughter used undue influence to force him to execute a satisfaction of mortgage.
Dunn v. White, 500 So.2d 565 (Fla. 2d DCA 1986)
This is an appeal from a judgment which denied plaintiff’s request to declare a satisfaction of deed of trust null and void. On cross-appeal, defendant challenges the trial court’s order which voided a warranty deed which transferred property to defendant. The plaintiff, Robert F. Dunn, filed an amended complaint alleging that the defendant, his daughter, Ruth Dunn White, abused her close family relationship with him and by exercise of undue influence caused him to execute certain legal documents on November 3, 1983. These documents were signed by the father at a time when he was age 95 and in ill health, having recently been released from the hospital. The documents consisted of a warranty deed conveying property to his daughter Ruth, a durable power of attorney, last will and testament, and a satisfaction of a deed of trust which cancelled his daughter’s obligation to repay sums due the father for his sale of land to her.
39 The plaintiff died February 19, 1985, and his eldest son was substituted as plaintiff. At trial, there was substantial, competent evidence to show that the daughter, Ruth, was in a close relationship with her father and that she actively induced her father to sign the documents in question. The trial judge found that the attorney who had been selected by the daughter explained the effect of the instruments to Robert F. Dunn and that the father understood them. Nevertheless, the court further found that as a result of the confidential relationship and her active procurement, a presumption arose that the instruments were produced by undue influence. In Re Estate of Carpenter, 253 So.2d 697 (Fla.1971).
From the evidence and trial judge’s findings, it is apparent the daughter did not meet the test of Williamson v. Kirby, 379 So.2d 693 (Fla.2d DCA 1980), as she did not offer a reasonable explanation for her active involvement in the execution of these legal instruments. Thus, the trial court correctly declared the warranty deed void. Yet, the court held the satisfaction of the deed of trust to be valid. On this point, we think the trial court erred. Since execution of the deed of trust was part of the same transaction as the deed which was found to be void, the evidence reveals the same undue influence as exercised by the daughter in respect to securing execution of the warranty deed.
We find no error in the other point raised by the plaintiff. We reject the defendant’s cross-appeal as being non-meritorious.
TYPES OF FORECLOSURE
Textbook page 273
Judicial foreclosure is required in Florida.
Judicial Foreclosure
Textbook page 273
The best way to understand the judicial sales procedure in Florida is to follow Florida Statue 45.031.
45.031 Judicial sales procedure: In any sale of real or personal property under an order or judgment, the following procedure may be followed as an alternative to any other sale procedure if so ordered by the court:
(1) SALE BY CLERK—In the order or final judgment, the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof, on terms and conditions specified in the order or judgment. A sale may be
40 held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time. Any sale held more than 35 days after the final judgment or order shall not affect the validity or finality of the final judgment or order or any sale held pursuant thereto. Notice of sale shall be published once a week for 2 consecutive weeks in a newspaper of general circulation, as defined in chapter 50, published in the county where the sale is to be held. The second publication shall be at least 5 days before the sale. The notice shall contain:
(a) A description of the property to be sold.
(b) The time and place of sale.
(c) A statement that the sale will be made pursuant to the order or final judgment.
(d) The caption of the action.
(e) The name of the clerk making the sale.
The clerk shall receive a service charge of $40 for his services in making, recording, and certifying the sale and title that shall be assessed as costs. The court, in its discretion, may enlarge the time of the sale. Notice of the changed time of sale shall be published as provided herein.
(2) DEPOSIT REQUIRED—At the time of the sale, the successful high bidder shall post with the clerk a deposit equal to 5% of the final bid. The deposit shall be applied to the sale price at the time of payment. If final payment is not made within the prescribed period, the clerk shall readvertise the sale as provided in this section and pay all costs of the sale from the deposit. Any remaining funds shall be applied toward the judgment.
(3) CERTIFICATION OF SALE—After a sale of the property the clerk shall promptly file a certificate of sale and serve a copy of it on each party not in default in substantially the following form:
(Caption of Action)
CERTIFICATE OF SALE The undersigned clerk of the court certifies that notice of public sale of the property described in the order or final judgment was published in _____, a newspaper circulated in _____ County in Florida, in the manner shown by the proof of publication attached, and on ___, 20___, the property was offered for public sale to the highest and best bidder for cash. The highest and best bid received for the property was submitted by _____, to whom the property was sold. The proceeds of the sale are retained for distribution in accordance with the order or final judgment, WITNESS my hand and the seal of this court on ___, 20___. ______(Clerk) By ______(Deputy Clerk)
41 (4) CERTIFICATE OF TITLE—If no objections to the sale are filed within 10 days after filing the certificate of sale, the clerk shall file a certificate of title and serve a copy of it on each party not in default in substantially the following form:
(Caption of Action)
CERTIFICATE OF TITLE The undersigned clerk of the court certifies that he executed and filed a certificate of sale in this action on ___, 19___, for the property described herein and that no objections to the sale have been filed within the time allowed for filing objections. The following property in _____ County, Florida: (description) Was sold to ______WITNESS my hand and the seal of the court on ___, 20___. ______(Clerk) By ______(Deputy Clerk) (5) CONFIRMATION—When the certificate of title is filed the sale shall stand confirmed, and title to the property shall pass to the purchaser named in the certificate without the necessity of any further proceedings or instruments.
(6) RECORDING—The certificate of title shall be recorded by the clerk.
(7) DISBURSEMENTS OF PROCEEDS—On filing a certificate of title, the clerk shall disburse the proceeds of the sale in accordance with the order or final judgment and shall file a report of such disbursements and serve a copy of it on each party not in default, and on the Department of Revenue if the department was named as a defendant in the action or if the Agency for Workforce Innovation or the Department of Labor and Employment Security was named as a defendant while the Department of Revenue was performing unemployment compensation tax collection services pursuant to a contract with the Agency for Workforce Innovation, in substantially the following form:
(Caption of Action)
CERTIFICATE OF DISBURSEMENTS The undersigned clerk of the court certifies that he disbursed the proceeds received from the sale of the property as provided in the order or final judgment to the persons and in the amounts as follows: Name Amount Total WITNESS my hand and the seal of the court on ___, 20___.
42 ______(Clerk) By ______(Deputy Clerk)
If no objections to the report are served within 10 days after it is filed, the disbursements by the clerk shall stand approved as reported. If timely objections to the report are served, they shall be heard by the court. Service of objections to the report does not affect or cloud the title of the purchaser of the property in any manner.
(8) VALUE OF PROPERTY—The amount of the bid for the property at the sale shall be conclusively presumed to be sufficient consideration for the sale. Any party may serve an objection to the amount of the bid within 10 days after the clerk files the certificate of sale. If timely objections to the bid are served, the objections shall be heard by the court. Service of objections to the amount of the bid does not affect or cloud the title of the purchaser in any manner. If the case is one in which a deficiency judgment may be sought and application is made for a deficiency, the amount bid at the sale may be considered by the court as one of the factors in determining a deficiency under the usual equitable principles.
(9) EXECUTION SALES—This section shall not apply to property sold under executions.
EFFECT OF A VALID FORECLOSURE SALE
Textbook page 274
Redemption after sale is not provided for in Florida. F.S. 702.07 (power of courts and judges to set aside foreclosure decrees at any time before sale).
DEBTOR’S REMEDIES OR DEFENSES TO FORECLOSURE
Textbook page 275
There is a provision to set aside a foreclosure sale when there is a mistake, fraud, misconduct, or other irregularity which results in an injustice. Brown v. Mirror Invest. Corp., 471 So.2d 589 (Fla. 4th DCA 1985). The property sold pursuant to a judicial sale is deemed to be adequate.
43 CHAPTER 11 MORTGAGE FORMS AND PROVISIONS
RESIDENTIAL MORTGAGE PROVISIONS
Textbook page 318
The FNMA/FHLMC form is used in Florida as it is required for federally backed mortgages.
HAZARDOUS WASTES
Textbook page 338
The owner is responsible for removal of hazardous waste from the property. An indemnity provision covering this is typical for Florida lenders, especially in commercial transactions.
44 CHAPTER 12 TITLE EXAMINATIONS
BONA FIDE PURCHASER FOR VALUE RULE
Textbook page 358
The Massachusetts definition of chain of title is followed in Florida.
CONSTRUCTIVE NOTICE
Textbook page 359
When an error occurs in transcribing the instrument into the permanent record book, constructive notice is not given to the recorded instrument.
RECORDING STATUTES
Textbook page 360
Florida Statutes Chapter 695 is a notice recording statute (conveyances to be recorded).
GRANTEE AND GRANTOR INDICES
Textbook page 364
Both grantor and grantee indices are maintained in Florida. Many counties now provide these indices on-line.
PLAT INDEX
Textbook page 365
All counties within Florida maintain plat books based upon location designations. Many counties have this information available on-line.
NAME VARIANCES
Textbook page 372
A certified copy of an amendment changing the corporate name may be obtained from the Secretary of State’s Offices in Tallahassee.
MECHANICS’ AND MATERIALMEN’S LIENS
Textbook page 374
The posting of a bond will not usually release the property from the mechanics’ and
45 materialmen’s liens.
46 CHAPTER 13 TITLE INSURANCE
TITLE INSURANCE (OPENING SECTION)
Textbook page 382
ALTA is used in Florida.
PRACTICE TIPS FOR THE PREPARATION AND REVIEW OF A TITLE INSURANCE COMMITMENT
Textbook page 398
Title insurance is issued by lawyers, either through law firms or through title insurance companies.
47 CHAPTER 14 REAL ESTATE CLOSINGS
THE ENVIRONMENT
Textbook page 439
Title companies handle most residential closings. Commercial closings are held at both title companies and law firms.
REVIEWING THE REAL ESTATE CONTRACT
Textbook page 441
Use a checklist like the example shown in Exhibit 14–1 to review the real estate contract.
EXHIBIT 14–1 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
48 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
49 Textbook page 449
A termite inspection is required in every real estate sale which contains a building on the property. F.S. 475.422 (disclosure). A termite clearance letter is not enough. A full report is required. Failure to comply with section 475.422 may subject licensees to disciplinary action pursuant to F.S. 475.25 (discipline).
50 CHAPTER 15 GOVERNMENT REGULATION OF REAL ESTATE CLOSINGS
The information presented in this chapter is also applicable in Florida.
51 CHAPTER 16 REAL ESTATE CLOSING FORMS AND EXAMPLES
DEEDS
Textbook page 498
See Chapter 8 section for sample Florida Documents.
52 CHAPTER 17 CONDOMINIUMS AND COOPERATIVES
CONDOMINIUM
Textbook page 562
The Condominium Act is contained in F.S. Chapter 718. It is very comprehensive as Florida has a large and ever increasing number of condominiums. It is divided into six (6) major parts.
BIRTH OF A CONDOMINIUM
Textbook page 562
The following are the statutory provisions regarding a condominium declaration:
Condominium Declaration in Florida
Contents of Condominium Declarations, F.S. 718.104(4)(a)-(m). The declaration must contain or provide for the following matters:
1. A statement submitting the property to condominium ownership;
2. 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;”
3. The legal description of the land and, if a leasehold estate is submitted to condominium, an identification of the lease;
4. 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;
5. A survey of the land which meets the minimum technical standards set forth by the Board of Professional Land Surveyors, 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 play 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 in the following discussion. The amendment may be accomplished by referring to the recording of date of a survey of the condominium that
53 complies with the certificate. A certificate of a surveyor 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 the building in which the units to be conveyed are located have been substantially completed, and such certification 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” means certification by a surveyor in the form provided herein and may include, along with certification by a surveyor, 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 as provided herein;
6. The undivided share of ownership in 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 fractio al basis;
7. The proportions or percentages of and manner of sharing common expenses and owning common surplus, which, for a residential condominium, must be the same as the undivided shares of ownership of the common elements and common surplus appurtenant to each unit as
54 provided in paragraph (6).
8. 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 a declaration recorded on or after July 1, 2000, for a condominium operated by a multicondominium association 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;
9. The name of th\e association, which must be a corporation for profit or a corporation not for profit;
10. Unit owners’ membership and voting rights in the association;
11. The document or documents creating the association, which may be attached as an exhibit;
12. 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;
13. Other desired provisions not inconsistent with this chapter;
14. 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:
Any such lien is subordinate to the rights of unit owners; or
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.
15. If timeshare estates will or may be created with respect to any unit in the condominium, a
55 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;
16. The declaration as originally recorded or as amended under the procedures provided therein may include covenants and restrictions concerning the use, occupancy, and transfer of the units permitted by law with reference to real property. However, the rule against perpetuities shall not defeat a right given any person or entity by the declaration for the purpose of allowing unit owners to retain reasonable control over the use, occupancy, and transfer of units.
17. A person who joins in, or consents to the execution of, a declaration subjects his or her interest in the condominium property to the provisions of the declaration.
18. All provisions of the declaration are enforceable equitable servitudes, run with the land, and are effective until the condominium is terminated.
ARTICLES AND BYLAWS OF A CONDOMINIUM ASSOCIATION
Textbook page 563
The condominium association may be either a profit or nonprofit corporation. F.S. 718.111(1)(a) (corporate entity).
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. F.S. 718.1255.
COOPERATIVE
Textbook page 566
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, F.S. 719 (cooperative act).
TIME-SHARES
56 Textbook page 568
This is a common form of ownership because of Florida’s popularity as a tourist destination. See, generally, F.S. 721.
It is hard to go to any of Florida’s more popular vacation destinations without being approached by someone trying to interest you in a time-share. Time-share salespeople are in booths in malls, near and within tourist attractions, and literally walking up and down the beaches. Even Walt Disney World has its own form of vacation ownership. It is a unique form of time-share ownership. Instead of owning a particular unit or week, you own an interest in the Vacation Club. Depending on how large your point value is, you may accumulate points over several years, determining the location and length of your stay. To make this even more appealing, Disney is continuing to expand the location sites of its Vacation Club holdings. They currently comply with all Florida time-share requirements and must continue to do so not only in this state, but in any state where they are located. In Florida, club resorts include Vero Beach, Old Key West, Boardwalk Villas, and Wilderness Lodge. See
The vacation club time-share plans require exhaustive public offering statement disclosures. F.S. 721.52(4).
57 CHAPTER 18 LEASES
COMMON LAW AND LEASES
Textbook page 596
A warranty of habitability is imposed on the landlord. F.S. 83.51 (landlord’s obligation to maintain premises).
DAMAGE OR DESTRUCTION TO THE PREMISES
Textbook page 604
The tenant is not obligated to continue paying rent once the property is damaged, so long as the tenant did not create the damage or the provisions in the lease did not provide otherwise.
OBLIGATION OF REPAIR
Textbook page 605
The landlord is obligated to inspect the premises and to repair defective premises. F.S. 83.51 (landlord’s obligation to maintain premises). Florida adheres to the majority rule regarding habitability.
MEMORANDUM OF LEASE
Textbook page 610
Leases for more than 1 year are not required to be recorded. Leases for 1 year or longer must be recorded in order to provide proper notice. F.S. 695.01 (conveyances to be recorded).
58