FL Underwriting References

Acknowledgments

Generally

FS 695.01 requires a deed or mortgage be recorded to be effectual against third parties; and FS 695.03 requires a deed, mortgage, or other document to be acknowledged to be recorded. Those statutory sections provide as follows: "[n]o conveyance, transfer, or mortgage of real property . . . shall be good and effectual in law . . . against creditors or subsequent purchasers . . . unless the same shall be recorded according to law." Fla.Stat. 695.01. "To entitle any instrument concerning real property to be recorded, the execution must be acknowledged by the party executing it [and] authenticated by a . . . notary public who affixes her or his official seal." Fla.Stat. 695.03. A jurat is not an acknowledgment so a deed or mortgage is not legally recorded if it only contains a jurat but does not have an acknowledgment. Therefore, if a recorded deed or mortgage only contains a jurat it will not provide constructive notice to third parties.

Acknowledgments In Foreign Country

Documents can be signed in a foreign country before a notary of that Country as long as the Notary has a Seal and the Seal indicates that the person is a notary with words such as Notare, Notar or similar language. If the acknowledgment is done in a foreign language, the acknowledgement must be translated and the translation must say 3 things: (1) that the signor appeared before the notary; (2) that the signor acknowledged his signature on the document; and (3) that the signor provided ID or was personally known to the Notary. The Translation is recorded with the original document. So, while the US Embassy is the safest route to take, with the above, an acknowledgment before a foreign notary is acceptable.

After Acquired Title Doctrine

The after acquired title doctrine is also known as estoppel by deed. Under that doctrine, if a person executes a deed or a mortgage before that signor actually has title, as long as that signor warrants the title in the deed or mortgage that they execute, when the signor acquires good title, that good title flows on through to their grantee or mortgagee.

Associations

Association Foreclosures

• See Foreclosures

Association Liens

Under FS 718.116 and 720.3085, Associations have a lien on each unit/parcel and the lien has priority as of the recording date of the condo dec or community CCR's. However, as to first mortgagees of record, the Association's lien [condo and non-condo] only has priority from the date that the lien was recorded. So, an Association cannot foreclose out a first mortgage unless the Association's lien was recorded prior to the first mortgage. Associations can foreclose out junior mortgages regardless of when the junior mortgage was recorded.

• After a first mortgagee obtains title through foreclosure or a deed in lieu, it has liability for unpaid assessments that came due prior to acquiring title limited to the lesser of: (1) the unit/parcel's unpaid common expenses and regular periodic assessments [non-condo statute adds "special assessments"] that came due 12 months prior to acquisition of title; or (2) one percent of the original mortgage debt.
• Duration
  • Non-Condo HOA - 5 years from recording
  • Condominium - 1 year from recording

Refinances Residential Property

• Association Estoppel is not required
• Municipal lien search is not required
• An Indemnity from the owner/borrower in favor of WFG regarding the forgoing is required

Bankruptcy

Chapter 13

Sale Of Property

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead. So, the debtor cannon sell or mortgage the property because they do not have title. Title has to be returned to them in the bankruptcy. One way for the debtor to get title back from the bankruptcy estate in a Chapter 13 is when the Chapter 13 Plan is filed and it provides that the debtor will keep the subject property or at least does not say that it will be sold or surrendered to a lender; and the court enters an Order Confirming the Plan. After the plan is confirmed, title goes back in to the debtor.

• Requirements to insure based on a Chapter 13 Plan:
  • Record a certified copy of the Chapter 13 Plan
  • Record a certified copy of the Order Approving the Plan
  • Record a certified copy of the pertinent pages from the bankruptcy docket showing that there was no appeal of the Order Approving the Plan.

Constructive Abandonment

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead so the debtor cannot sell or mortgage the property because they do not have title. Title has to be returned to them in the bankruptcy. When the bankruptcy is closed and the property is listed on Schedule A and the Bankruptcy Trustee does not sell the property, title vests back in to the debtor when the bankruptcy is closed i.e. terminated. This is known as constructive abandonment.

• Requirements to insure based on constructive abandonment:
  • Record a certified copy of Schedule A showing that the subject property was listed.
  • Record a certified copy of the bankruptcy docket showing that the bankruptcy case is closed.

Homestead - Judgments

Filing bankruptcy only removes the personal debt but does not remove a judgment lien from property without a further Order from the bankruptcy court. However, when property is claimed as homestead, the agent may be able to insure over the judgment(s) using WFG's Affidavit of Homestead procedure. Contact Underwriting for the Conditions For Use and the Affidavit of Homestead.

Homestead - Sale Of

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead. After filing bankruptcy, the debtor cannont sell or mortgage the property because the debtor does not have title. Title has to be returned to the debtor in the bankruptcy. One way of returning title to homestead to the debtor within the bankruptcy is to list the property as Exempt on Schedule C of the bankruptcy. Then the creditors and the Trustee have 30 days after the meeting of creditors to object to any exemptions on Schedule C. If they do not object in that 30-day period, title goes back to the debtor so he/she can sell or mortgage the homestead/property.

• Requirements To Sell Homestead Property When Owner Files Bankruptcy:
  • Record a certified copy of Schedule C to show that the property was listed as Exempt in the bankruptcy
  • Record a certified copy of the Docket to show that neither the Trustee nor any creditors objected to the claim on Schedule C that the property is exempt from the bankruptcy estate.

Judgments - Property Acquired After Bankruptcy

As long as the debt/judgment is listed on Schedule F in the bankruptcy and the debtor obtains a discharge in the bankruptcy, the judgment would not attach to property acquired after the discharge was entered.

• Requirements to insure over the judgment(s):
  • Record certified copy of Schedule F showing the debt/judgment.
  • Record certified copy of the discharge.
  • Record certified copy of the first page of the bankruptcy docket showing that the bankruptcy is closed.

Notice Of Intent To Sell By Trustee

For non-homestead, the bankruptcy trustee can file a Notice of Intent to Sell with negative notice. What that means is, if nobody (creditors or the debtor) file an objection to the sale within the 21-day period from the date that Notice of Intent to Sell was mailed, the Trustee can sell the property without a court order. If the debtor or a creditor object to the Notice of Intent to Sell, then a hearing and a bankruptcy court order would be required.

• Requirements to insure a sale by the Trustee:
  • Wait for the 21-day period to expire.
  • Review the current docket to confirm that no objections to the Notice of Sale were filed
  • Record certified copies of the following:
    • 1. Notice of Intent to Sell
    • 2. Docket evidencing no Objections to the Notice of Intent to Sell were filed during the 21-day period
  • If an objection to the Notice of Intent to Sell is filed, record certified copies of the following:
    • 1. Notice of Intent to Sell
    • 2. Order Denying the objection and authorizing sale'
    • 3. Bankruptcy Docket

Stripping Liens

• See Main Menu
  • National & Multi-State Topics
    • Bankruptcy
      • Stripping Liens

Butler Rebates

The Butler Rebate or discount comes out of the agent’s portion of the premium. The agent remits to the Underwriter the full share due to the Underwriter as if no Butler Rebate/Discount was given. Let’s say that a $200 discount on a $100,000 deal is to be given as a Butler Rebate/Discount. Before going to the column on the HUD / CD to show the premium charged, off to the left of the column on the HUD / CD, show the full premium of $575 less $200 Butler Discount; and then in the actual column put the premium charge as $375. Remit to the Underwriter based upon the full $575.

Foreclosures

Association Foreclosures and Small Lien Foreclosures

In Association foreclosures and small lien foreclosures, WFG requires personal service of process on the former owners instead of constructive service i.e. publication, as a risk analysis proposition. While constructive service is a legal way to serve a person, WFG will not rely it in small lien foreclosures including Association foreclosures because we need o be sure that the owner knew he/she was going to lose their property for that small lien amount.

Competing Foreclosures

If mortgage being foreclosed is a first mortgage and if the Association is brought in to the mortgage foreclosure, the Association can be wiped even when it obtains a Certificate of Title in the Association foreclosure subject to the lender having to pay the lender’s safe harbor amount of Association fees to the Association. However, when a 3d party purchases title at the Association’s foreclosure sale and obtains a Certificate of Title, while that 3d party’s title is also wiped out by the mortgage foreclosure, WFG is concerned that the 3d party may not realize that the title obtained in the Association foreclosure was eliminated in the mortgage foreclosure and may not voluntarily vacate the property. Therefore, even though the 3d party’s title is eliminated, WFG does not want to have to pay, on behalf of its insured owner, to eject the 3d party. Therefore, we usually require a deed from that 3d party purchaser. However, in lieu of a deed, WFG will accept an affidavit from the seller or seller’s representative that the property is vacant i.e. that the 3d party is not in possession of the property.

Homestead Devise

See Probate.

Deed from Entireties ownership into Tenancy in Common in the H&W may constitute waiver of homestead such that subsequent conveyance of the 1/2 interest by will does not violate homestead devise restrictions. Stone v. Stone (4th DCA 2014)

Probate

Questions To Ask When Titleholder Is Deceased

When the titleholder is deceased, the following questions should always be asked in order to determine who has title to the property; and to determine who deeds are needed from:

• Was the property the homestead of the decedent?
• Was the decedent survived by a spouse?
• Was the decedent survived by any minor children?
• Did the decedent have a Will?
• To whom did the Will devise the homestead to?
• Has the decedent’s estate been probated in Florida?

Definitions

Testate means that the decedent had a Will.

Intestate means that the decedent did not have a Will.

Devise is a gift in a Will, and the beneficiaries in the Will are known as “Devisees”. F.S. 731.201(10) and (11).

Heirs. When the decedent does not have a Will, relatives of the decedent who inherit property according to Florida’s intestate laws are called “Heirs”. Devisees are Beneficiaries under a Will; and Heirs are Beneficiaries when the decedent does not have a Will. F.S. 731.201(20).

Beneficiary applies to both Devisees under a Will and to Heirs under Florida’s intestacy laws. F.S. 731.201(2).

Protected Homestead [M]eans the property described in s. 4(a)(1), Art. X of the State Constitution on which at the death of the owner the exemption inures to the owner’s surviving spouse or heirs under s. 4(b), Art. X of the State Constitution.”

F.S. 731.201(33). Snyder v. Davis, 699 So.2d 999 (Fla. 1997) held that the word “heirs” under Art. X, Sec. 4(b) of the Florida Constitution includes remote devisees under a Will.

Title Passes On Death

The decedent’s death is the event that passes title to the beneficiaries. F.S. 732.101(2), 732.514, and Title Standards 5.1 and 5.2. Based upon those statutory sections and the Title Standards, title passes automatically at the moment of death to the beneficiaries named in the Will, or to the heirs if there is no Will. Heirs are determined according to Florida’s intestate laws. See F.S.732.102 and 732.103 for Florida’s intestate succession.

Why Is Probate Required?

If title passes upon death, why is a probate necessary? Florida Statute Section 733.103(1) provides that: “[u]ntil admitted to probate in this state … the will shall be ineffective to prove title to, or the right to possession of, property of the testator.” Therefore, even though title passes immediately to the beneficiaries upon death, those beneficiaries will not be legally recognized until a probate has been filed.

Authority of Personal Representative

With respect to a personal representative’s authority to convey title, F.S. 733.608 provides that: “All real and personal property of the decedent, except the protected homestead … shall be assets in the hands of the personal representative”; and F.S. 733.607 provides that: “… every personal representative has a right to, and shall take possession or control of, the decedent’s property, except protected homestead”. Based upon these statutory sections, a personal representative can only convey title to non-homestead property or unprotected homestead. Only when the property is clearly not the homestead of the decedent can the personal representative convey the property. An example would be vacant land, or when there is a court order determining other property to be the homestead of the decedent. Even though a personal representative has no authority over homestead property, we always require a deed from the personal representative to eliminate the interest of the estate.

However, if there is an Order determining the property to be the homestead of the decedent, a deed from the personal representative would not be necessary because the personal representative has no authority over homestead property and the court has determined the property to be homestead. When we do not have solid proof that the property was the homestead of the decedent, we require a deed from the personal representative to eliminate the estate’s interest just in case the property was not the homestead of the decedent.

Court Order. If there is a court Order authorizing the personal representative to convey the homestead property, is a deed from the personal representative sufficient to convey good title without obtaining deeds from the beneficiaries? The answer is “no” because a personal representative has no authority over homestead property even with a court order.

Restrictions On Devises Of Homestead Property

Regarding a devise of homestead property, Article X, Section 4(c) of the Florida Constitution and F.S. 732.4015(1), provide that: “the homestead shall not be subject to devise if the owner is survived by a spouse or minor child, except the homestead may be devised to the owner's spouse if there is no minor child.” Regarding intestate (no Will) property, F.S. 732.401(1) provides that: “If not devised as authorized by law and the constitution, the homestead shall descend in the same manner as other intestate property; but if the decedent is survived by a spouse and one or more descendants, the surviving spouse shall take a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death per stirpes.”

Restrictions of Devises of Homestead

The foregoing Constitutional Section and Statutory Sections restrict who the homestead property can be devised to (gifted to in a Will) if the decedent is survived by a spouse and/or minor children.

• Spouse = Spouse Only. If the decedent is survived by a spouse and no minor children, the only person that the homestead property can be devised to is the spouse. A devise [a gift in the Will] of the homestead property to anybody other than the spouse will fail, and the homestead will be inherited as intestate property as if there had been no Will i.e. the spouse will receive a life estate and the decedent’s descendants in being at the time of the decedent’s death, if any, will receive the remainder. If there is only a surviving spouse and no descendants, then the spouse inherits the entire fee in the homestead, not just a life estate.

• Minor = Nobody. If the decedent is survived by a minor child, the homestead property cannot be devised to anybody. In this situation, any devise (gift in the Will) of the homestead will fail and the minor child (or children) will receive title to the homestead property under Florida’s intestate laws as if there had been no Will. F.S. 732.401(1) and 732.103. If the decedent is also survived by a spouse and the minor child or children, the spouse will inherit a life estate and all of the children [minors too] will inherit the remainder.

Examples of Probate Law is Applied to Homestead:

Example One.

Title is vested solely in the decedent and he was survived by a spouse and adult children.

• The decedent’s Will devised the homestead to his spouse. That devise would be valid because the only person that he is allowed to devise the homestead to, in this situation, is his spouse. F.S. 732.4015(1).
• The decedent’s Will devised the homestead to the adult children. Under F.S. 732.4015(1) and 732.401(1), the only person that the decedent can devise the homestead property to is his spouse. Since his Will devised the homestead to somebody other than his spouse, that devise would fail and the homestead would pass as if there was no Will i.e. as intestate property, pursuant to F.S. 732.401(1). Under that section, the surviving spouse would inherit a life estate and the adult children would receive a remainder interest. Pursuant to F.S. 732.401(2), in lieu of the life estate, the surviving spouse may elect to take an undivided one-half interest in the homestead as a tenant in common with the children, who would inherit the other one-half interest.

Example Two.

The decedent, who was the sole titleholder, was survived by a spouse and minor children. His Will devised the homestead to his spouse.

• In this situation, the homestead cannot be validly devised to anyone because the decedent was survived by minor children. Therefore, the homestead will be inherited according to F.S. 732.401(1) as if there was no Will. Under that statue, the surviving spouse will receive a life estate and the decedent’s descendants [the children] will receive the remainder interest. Pursuant to F.S. 732.401(2), in lieu of the life estate, the surviving spouse may elect to take an un-divided one-half interest in the homestead as a tenant in common with the children, who would inherit the other one-half interest.

Example Three.

The decedent was survived by two adult children and two minor children. The decedent’s Will devised one-half of the homestead to the adult children and one-half of the homestead to the adult children, as trustees for the minor children.

• That devise would fail because under Art. X, Section 4(c) of the Florida Constitution, F.S. 732.4015(1), and 732.401(1), when the decedent is survived by a minor(s), the homestead cannot be devised to anyone. Therefore, the homestead would be inherited according to Florida’s intestate laws, F.S. 732.4015(1), 732.401(1), and 732.103 as if there had been no Will. Florida Statute 732.103 provides that: “The part of the intestate estate not passing to the surviving spouse under s. 732.102, or the entire intestate estate if there is no surviving spouse, descends as follows: (1) To the lineal descendants of the decedent.” Since all of the children, adults and minors, are the lineal descendants of the decedent, they would “inherit” the homestead under the forgoing statutes.

Example Four.

The decedent was survived by minor children only and his Will devised the homestead to those minor children.

• Oddly, that devise would fail because under Art. X, Section 4(c) of the Florida Constitution, F.S. 732.4015(1), 732.401(1), and 732.103, when the decedent is survived by a minor child or minor children, the homestead cannot be devised to anyone. Therefore, the homestead would be inherited according to Florida’s intestate laws as if there had been no Will. Since the minor children are the lineal descendants of the decedent, they would “inherit” the homestead under forgoing laws. So, even though the devise of the homestead to the minor children in the Will fails, the minor children would still inherit the homestead property.

Example Five.

The decedent is survived by adult children only and his Will devised the homestead to those adult children.

• That devise would be valid and the adult children would receive the homestead as devisees under the Will. The reason that this devise is valid is because the decedent was not survived by a spouse or minor children, so he could devise the homestead to whomever he desires.

Example Six.

Assume the same facts as Example No. Six except that the decedent devised the homestead to one child instead of all of his adult children.

• Since the decedent was not survived by a spouse or a minor child, he may devise the homestead to whomever he desires, even somebody other than his children, so the devise to one child would be valid.

Homestead Devise Restrictions Applied to Trusts

See Trusts

Reforeclosure

Al LaSorte Reforeclosure - the Good, the Bad and the Ugly

After a year and a half dueling with foreclosure defense counsel, you finally have a foreclosure judgment in hand and a sale date scheduled when you learn of a subordinate lienor whose lien pre-dates the foreclosure suit, but which you didn’t name as a defendant because the pre-suit title search failed to uncover it.

Just for a moment, panic sets in. The client is counting on getting title at the upcoming clerk’s sale and won’t be happy. What to do?

Never fear, all is not lost. There is a remedy (albeit, one with a catch) – reforeclosure.

Where a subordinate lienholder is omitted in a foreclosure action, its lien is not extinguished, unlike the lien of any lienor properly named and served. But that doesn’t necessarily give the omitted lienor a windfall. The lien can still be foreclosed out, even after the clerk’s sale has occurred. While the successful high bidder at the sale takes its title subject to the omitted lien, it can eliminate the omitted lien via a re-foreclosure suit:

“The remedies of a purchaser at the foreclosure sale against an omitted junior mortgagee are a motion to compel redemption by the junior, or re-foreclosure in a suit de novo. The omitted junior mortgagee may defend in the same manner as if the initial foreclosure had not happened. Abdoney v. York, 903 So. 2d 981, 983 (Fla. 2d DCA 2005).” Marina Funding Group, Inc. v. Peninsula Property Holdings, Inc., 950 So.2d 428 (Fla. 4th DCA 2007).

The reforeclosing plaintiff need not be the lender; if the clerk’s sale has already occurred, the certificate of title holder may reforeclose as well, as the successor to the superior lienholder (mortgagee). White v. Mid-State Savings & Loan Ass’n, 530 So.2d 959 (Fla. 5th DCA 1988).

The re-foreclosure can be accomplished by a motion to compel re-foreclosure, or if the foreclosure action is already closed, by a separate suit. Therein, the complaint names only the omitted lienor as a defendant. It alleges that the lien is inferior to the foreclosed mortgage, that the lienor was inadvertently omitted from the foreclosure action, and that had it been named, this lien would have been eliminated by the foreclosure sale.

Re-foreclosure is a two-step process. The first is to obtain an order giving the lienor a set time (usually thirty days) to redeem the property by paying into the court registry the same amount it could have paid in order to redeem the property and save its lien, had it been named properly in the original foreclosure suit (i.e., the amount owed on the superior mortgage as of the date of the original foreclosure action). This can usually be handled via summary judgment. The order also provides that if the lienor fails to redeem by the deadline, the court will enter judgment removing the lien from the property.

The second step occurs once the lienor fails to redeem the property within the set time period. After the deadline runs, a motion for entry of judgment extinguishing the lien is usually all that is needed. The court enters judgment, the lien is extinguished, and you have a happy client.

Note – reforeclosure is usually a safe procedure for clearing title to property. But here’s the catch: where there is equity in the property above the redemption price, there is risk that the omitted lienor will exercise its redemption right and buy the property out from under the plaintiff. Let’s say you foreclose a $200,000 mortgage on a property worth $400,000, and in doing so you omit a $250,000 second mortgage. Let’s further say a third party buys at the clerk’s sale for $350,000, thinking she got a great deal. If that buyer then discovers the omitted second mortgage, she can file a reforeclosure action to attempt to eliminate it and clear up her title.

But in the ensuing reforeclosure, the lienor will have the opportunity to redeem the property for the same $200,000 it could have redeemed it for in the original foreclosure action.

“The term “right of redemption” takes on different meanings depending on whether it refers to the right of a mortgagor or a subordinate or junior mortgage. When a mortgagor redeems, his property is freed from the redeemed mortgage. “Redemption” in the context of a junior mortgagee or other junior lienor, “it refers to his right to satisfy a prior mortgage by payment of the debt it secures and thereby become equitably subrogated to all rights of the prior mortgagee.” Engels v. Valdesuso, 497 So. 2d 698, 700 n.1 (Fla. 3d DCA 1986).

Since in our hypothetical the property is worth double the amount of the mortgage that got foreclosed, the missed lienor has every incentive to come up with $200,000 and redeem within the thirty day period, thereby being subrogated to the original lender’s $200,000 lien position, per Marina Funding, supra. It then would have the newly-acquired $200,000 first lien, plus its own second lien of $250,000, for a total of $450,000 in liens on a property worth $400,000, using up all the equity in the property. The purchaser at the clerk’s sale would have nothing to show for her $350,000 purchase. Not such a smart deal, after all!

Moral of the story – reforeclosure can be an effective tool for eliminating omitted subordinate liens. But it only makes sense where the mortgage that was foreclosed (and therefore the price for subordinate lienors to exercise their redemption rights) is comfortably less than the value of the property.

Note – the term “reforeclosure” only applies to omitted subordinate lienholders, not to owners of the subject property itself. Where an owner is omitted in a foreclosure complaint, the foreclosure judgment is void. As such, filing a new action to name the correct owner is not a “reforeclosure,” but rather simply a “foreclosure.” English v. Bankers Trust Co. of California, 895 So.2d 1120 (Fla. 4th DCA 2005).

Same-Sex Marriage

Obergefell v. Hodges, 135 S.Ct. 2584 (SC 2015) – Same-Sex Marriages

On June 26, 2015, the United States Supreme Court issued its decision in the Obergefell v. Hodges. In that case, the U.S. Supreme Court held that States are required to recognize same-sex marriages under the Equal Protection Clause of the 14th Amendment to the U.S. Constitution. Prior to the Obergefell case, Florida’s Constitution and Statutes defined marriage as being between a man and a woman. After the Obergefell case, WFG issued Bulletin No. FL2015-10 confirming that same-sex marriage is now recognized in Florida and that same-sex couples should be treated the same as any other married couple for title insurance purposes.

The Bulletin addressed the following issues:

• Vesting.
  • If a same-sex couple or an opposite-sex couple intends to hold title as tenants by the entirety, title should be vested as follows: “A and B, a married couple” rather than “A and B, husband and wife”.
  • When conveying jointly held property, the grantors should be described as: “A and B, a married couple”.
  • When conveying homestead property held solely by A, the grantor clause should be: “A, joined by [his/her] spouse, B”.
  • For non-homestead property owned by one spouse, the usual “non-homestead” disclaimer should be included in the deed.

• Entireties and Other Creditor Protections. Same-sex couples are afforded the same creditor protections as any other married couple, including protections under estates by the entirety, homestead, and other exemption laws.

What is the retroactive effect of the Obergefell case?

• How does Obergefell affect vesting, entireties, survivorship, and probate for same-sex couples who took title prior to the Obergefell case?
• What effect does the Obergefell case have on title acquired by a same-sex couple who took title prior to Obergefell as “A and B”?
  • Is title vested in the couple as tenants by the entirety?
  • Was a tenancy by the entirety created automatically when the Obergefell case was decided?
  • Does that couple need to execute a deed to themselves to create a tenancy by the entirety?

Whether title became vested in the same-sex couple as tenants by the entirety prior to the Obergefell case affects how judgments against one spouse are treated. And, it affects how title is vested upon the death of one spouse. Additionally, what are the homestead rights of a surviving spouse when the other spouse, who was solely vested in title to homestead property, died prior to the Obergefell case?

• Does the surviving spouse have all of the homestead rights of a surviving spouse?

What if one spouse, who was solely vested in title to homestead property, conveyed the homestead property - prior to the Obergefell case, without joinder of the other spouse.

• Is that conveyance invalid since there was no joinder of spouse?

If any of the above “retroactive” situations arise in a current transaction, you need to contact WFG Underwriting for guidance.

SURVEYS

Surveys - Use of Prior Surveys and Reliance on Prior Policies

Background

Every title commitment should have a standard survey exception similar to this: “Encroachments, overlays, boundary line disputes, and other matters disclosed by a survey meeting the standards of practice for surveying.” That exception will be carried over to the policy unless a survey meeting the conditions set forth in Florida Statute 627.7842(1)(a) is obtained for the closing. Florida Statute 627.7842(1)(a) provides, as follows:

“If a survey meeting the standards of practice for surveying required by the Department of Agriculture and Consumer Services and certified to the title insurer by a registered Florida surveyor has been completed on the property within 90 days before the date of closing, the title policy may only except from coverage the encroachments, overlays, boundary line disputes, and other matters which are actually shown on the survey.”

If a survey meeting the conditions set forth in F.S. 627.7842(1)(a) is obtained for the closing, you are required to delete the standard survey exception but may make specific exceptions in the policy for encroachments, overlaps, and other matters shown on the survey.

Use of Prior Surveys

WFG will allow you to use a prior survey to delete the standard survey exception for a sale or a mortgage under the following conditions:

• The transaction is for residential property.
• The prior survey, which can be of any age, is certified to the current owner.
• The owner executes a survey affidavit confirming that there have been no improvements made to the property or to the adjoining property since the date of

the survey.

With the prior survey and the survey affidavit, you may delete the standard survey exception. However, you must make specific exceptions for encroachments, overlaps, and other matters shown on the survey. You may issue a Form 9 (9-06, 9.1-06, or 9.2-06) to the lender and/or buyer under the same requirements to issue a Form 9 when a new survey is obtained.

Use of Prior Policies

As discussed above, F.S. 627.7842(1)(a) requires that the standard survey exception be deleted and not included in the title policy when a survey meeting the standards of practice for surveying is obtained for the closing. Based on that statutory requirement, if an owner’s policy or a lender’s policy does not contain the standard survey exception, a survey must have been obtained for that transaction; otherwise the standard survey exception would not have been deleted from the policy.

Based on the forgoing, WFG will allow you to delete the standard survey exception without a survey under the following conditions:

• The transaction is a refinance of residential property.
• The owner/mortgagor provides you with a copy of either an owner’s policy insuring the current owner, or a lenders’ policy insuring the owner’s mortgage.
• The prior policy does not contain the standard survey exception.
• The owner/mortgagor executes a survey affidavit confirming that there have been no improvements made to the property or to the adjoining property since the date of the policy.

You must make exceptions for all survey matters shown as exceptions in the prior policy. You may issue a Form 9-06 to the lender under the same requirements to issue a Form 9 when a survey is obtained.

Forms for the two affidavits referenced herein can be found at the following: [Hyperlink for survey affidavit for use with prior survey] [Hyperlink for survey affidavit for use with prior policy]

Tax Deeds

What Are WFG’s Florida requirements to insure title based on tax deeds.

After a tax deed has been issued for at least 4 years, F.S.95.191 and 95.192 provide protection to a tax deed grantee from claims by the former owner(s) and other adverse claimants as long as the tax deed grantee has been in actual possession of the property during that 4-year period and the former owner(s) was not in actual possession of the property during the first year after the tax deed was issued. If those conditions are met, the former owner(s) and other adverse claimants are prohibited from bringing a lawsuit to recover possession of the property.

Based on F.S. 95.191 and 95.192, WFG’s requirements to insure title based on tax deeds is separated into two categories:

• Tax deeds recorded less than 4 years, and
• Tax deeds recorded 4 years or longer.

I. Requirements to insure title based on tax deeds recorded less than 4 years: The ownership interests, mortgages, judgments, liens, and other interests to be eliminated can be separated in to three groups, as follows:

• Ownership interests, mortgages, judgments, and other liens not referenced in the Tax Deed procedure. Obtain a title search to determine if there are any ownership interests, mortgages, judgments, liens, or other interests in the back chain of title that were not addressed in the tax deed procedure. You must obtain deeds, mortgage releases, judgment releases, lien releases, and other documents required by the title search to perfect title to the back chain.
• Ownership interests, mortgages, judgments, and other liens that were listed in the in the Tax Deed procedure but were not properly served with notice of the Tax Deed sale. Review the Tax Deed file to confirm that notice of the Tax Deed Sale was properly mailed by the Clerk of Circuit Court to the addresses contained in the deeds, mortgages, judgments, liens, and other interests for all legal titleholders, mortgagees, judgment holders, lienholders, and all other parties on the tax collector’s list of persons to be notified of the Tax Deed sale. You must obtain deeds, mortgage releases, judgment releases, and lien releases from all legal titleholders, mortgagees, judgment holders, and lienholders who were on the tax collector’s list but who were not given notice of the Tax Deed sale at the address contained in their deed, mortgage, judgment, or other lien.
• Ownership interests, mortgages, judgments, and other liens that were listed in the in the Tax Deed procedure and who received proper notice of the Tax Deed sale. Quiet title lawsuit against all legal titleholders, mortgagees, judgment holders, and other lien holders – whose interests were purportedly eliminated by the tax deed procedure and who did receive proper notice of the tax deed sale, culminating in a final judgment quieting title in to the tax deed grantee [his/her/its successors or grantee(s)].

• Agent must provide Underwriting with copies of the following:
  • Complete copy of tax deed file
  • From the quiet title lawsuit:
    • Complaint
    • All summonses and returns of service
    • All answers filed
    • Final judgment quieting title
    • All other documentation required by Underwriting

Underwriting will review the summonses, returns of service, and answers filed - if any, for all former owner(s), mortgagees, and lien holders to ascertain the interests that were eliminated by the quiet title case. After that review, Underwriting will determine whether any additional deeds, mortgage releases, lien releases, or other documents are required.

II. Requirements to insure title based on tax deeds recorded 4 years or longer.

• The ownership interests, mortgages, judgments, liens, and other interests to be eliminated can be separated in to two groups, as follows:
  • Ownership interests, mortgages, judgments, and other liens not referenced in the Tax Deed procedure. Obtain a title search to determine if there are any ownership interests, mortgages, judgments, liens, or other interests in the back chain of title that were not addressed in the tax deed procedure. You must obtain deeds, mortgage releases, judgment releases, lien releases, and other documents required by the title search to perfect title to the back chain.
  • Ownership interests, mortgages, judgments, and other liens that were listed in the Tax Deed procedure but were not properly served with notice of the Tax Deed sale. Review the Tax Deed file to confirm that notice of the Tax Deed Sale was properly mailed by the Clerk of Circuit Court to the addresses contained in the deeds, mortgages, judgments, liens, and other interests for all legal titleholders, mortgagees, judgment holders, lienholders, and all other parties in tax collector’s list of persons to be notified of the Tax Deed sale. You must obtain deeds, mortgage releases, judgment releases, and lien releases from all legal titleholders, mortgagees, judgment holders, and lienholders who were on the tax collector’s list but who were not given notice of the Tax Deed sale at the address contained in their deed, mortgage, judgment, or other lien.
• Agent to provide Underwriting with complete copy of tax deed file.
• Underwriting will review the tax deed file to ascertain the interests that were eliminated by the tax deed procedure. After that review, Underwriting will determine whether any additional deeds, mortgage releases, judgment releases, lien releases, or other documents are required.

While Florida Statutes 95.191 and 95.192 provide statutory protection to tax deed grantees as discussed herein, WFG may not rely on that protection to insure over mortgages after a review of the tax deed file. That decision will depend on the following:

• Whether notice of the tax deed sale was provided to the lender at the addresses listed in the mortgage
• Proof that that lender held the mortgage
• The face amount of the mortgage
• The age of the mortgage
• Evaluation of the risk

Affidavit of Possession.

The tax deed grantee must execute an Affidavit of Possession establishing the tax deed grantee’s actual possession of the property during the 4-year period after the tax deed was issued; and establishing that the former owner(s) was not in actual possession of the property during the first year after the tax deed was issued. The Affidavit of Possession must be recorded.

Tax Deed Services.

WFG will not rely on certificates from tax deed services in lieu of a quiet title lawsuit to insure title based on a tax deed recorded less than 4 years.

Interests Not Eliminated By a Tax Deed.

Certain interests cannot be eliminated by the tax deed procedure and must be released from the property or listed as exceptions in the policy; and there are other interests that WFG is not willing to insure over. Those interests are:

• Governmental liens held by municipalities, Counties, special districts, and community development districts. F.S. 197.552.
• Covenants and restrictions. F.S. 197.573.
• Easements for conservation, public service purposes, ingress and egress, telephone, pipelines, power transmission, and drainage. F.S. 197.572.
• Oil, gas, and mineral rights.
• Federal tax liens. While it may be possible to eliminate Federal tax liens with proper notice to the Internal Revenue Service, WFG will require all Federal tax liens be released from the property or listed as exceptions in the policy.
• Association fees and assessments. WFG will not insure over Association fees, dues, costs, or special assessments. F.S. 718.116(1)(a) and 720.3085(2)(b) make all owners jointly and severally liable with the previous owner for all unpaid assessments.

Note: A company by the name of Judicial Research can obtain copies of court file documents for a fee. Their number is: 305-379-3900.

Affidavit of Possession- Form attached hereto: FL 2016-05 Affidavit of Possession For Tax Deed

TRUSTS

Homestead Devise Restrictions Applied To Trusts

Homestead Devise Restrictions. The two devise restrictions under Article X, Section 4(c) of the Florida Constitution apply when title to homestead property is vested in a trustee of a revocable trust. Those two devise restrictions are:

• Spouse = Spouse Only. As explained in the Probate Section, this means that when the deceased title-holder is survived by a spouse and no minor children, the only person that the homestead can be devised to (gifted by a Will) is the spouse.

• Minor = Nobody. As explained in the Probate Section, this means that when the deceased title-holder is survived by a minor child or minor children, whether there is also a surviving spouse or adult children, the homestead cannot be devised (gifted by a Will) to anybody.

Revocable Trust. “Any portion of a trust with respect to which a decedent who is the grantor has at the decedent’s death a right of revocation, as defined in paragraph (e),

• * *

(e) For purposes of this subsection, a “right of revocation” is a power retained by the decedent, held in any capacity, to: 1. Amend or revoke the trust and revest the principal of the trust in the decedent; or 2. Withdraw or appoint the principal of the trust to or for the decedent’s benefit.” F.S. 733.707(3)(e).

Homestead Devise Restrictions Applied To Revocable Trusts

A. F.S. 732.4015 entitled Devise of Homestead, provides as follows:

(1) As provided by the Florida Constitution, the homestead shall not be subject to devise if the owner is survived by a spouse or a minor child or minor children, except that the homestead may be devised to the owner’s spouse if there is no minor child or minor children.

(2) For the purposes of subsection (1), the term:

(a) “Owner” includes the grantor of a trust described in s. 733.707(3) that is evidenced by a written instrument which is in existence at the time of the grantor’s death as if the interest held in trust was owned by the grantor.

(b) “Devise” includes a disposition by trust of that portion of the trust estate which, if titled in the name of the grantor of the trust, would be the grantor’s homestead.

B. F.S.732.4015(2) applies the devise restrictions in Article X, Section 4(c) of the Florida Constitution to revocable trusts.

“Owner” is defined in F.S.732.4015(2) to include the grantor [settlor] of a trust; and F.S. 733.707(3) referenced in F.S.732.4015(2)(a) pertains to revocable trusts.

“Devise” is defined in F.S.732.4015(2) to include a disposition of homestead through a revocable trust.

Therefore, if the settlor of a revocable trust dies survived by a spouse or minor child, the two devise restrictions under the Florida Constitution would apply and would affect whether title to the homestead can pass through the trust.

Homestead Law Applies to Title Held In A Revocable Trust.

The homestead devise restrictions applicable to title held by individuals also applies when homestead vested in a Trustee of a revocable trust. In the case of Aronson v. Aronson, 81 So.3d 515 (3 DCA 2012), the homestead property was vested in Hillard Aronson as Trustee of the Hillard Aronson revocable trust. Hillard was the settlor of the trust. Hillard died survived by a spouse and adult children. The Trust provided that on Hillard’s death, Hillard’s surviving spouse, Doreen Aronson, would receive a life estate and his two adult sons, James and Jonathan, would receive the remainder interest. Due to the devise restrictions under Art. X, Section 4(c) of the Florida Constitution, the only person that the Trust could distribute the homestead to on the death of Hillard was his spouse, Doreen. Since the Trust only gave Doreen a life estate rather than fee title when Hillard died, the 3d DCA held that title could not pass through the trust but passed under Florida’s intestate laws. The 3d DCA held that “At the moment of Hillard’s death, his homestead property passed outside of probate, [citations omitted] in a twinkle of an eye, as it were, to his wife for life, and thereafter to his surviving sons, James and Jonathan per stirpes.”. Ironically, Doreen ended up receiving what the trust had provided for i.e. a life estate, and the sons got the remainder interest.

The Aronson case changed the way that Underwriters view homestead property held by a trustee of a revocable trust. After Aronson, the title industry no longer views the deed into the trust as automatically invalid if the settlor of the trust dies survived by a spouse. Now, for purposes of analyzing what happens to title to homestead property held in a trust upon the death of the Settlor, the deed in to the trustee is viewed as valid and the Trust is viewed as if it is a Will. For purposes of determining if one of the homestead devise restrictions was violated on the death of the Settlor, the title is viewed as if it is vested in the Settlor of the trust in his individual capacity rather than as Trustee of the trust. Therefore, if the Settlor dies survived by a spouse and no minor children, the spouse devise restriction would apply and the Trust must be reviewed as if it was a Will to determine if, upon the death of the Settlor, the trust gives fee title to the homestead property to the Settlor’s spouse. If the Trust distributes the homestead to somebody other than the settlor’s spouse, or gives the spouse less than a 100% fee interest in the homestead, that distribution would fail and the homestead would pass as intestate property under F.S. 732.4015(1) and 732.401(1). Under those sections, the surviving spouse would receive a life estate and the children would receive a remainder interest. Even if the Trust provides that on the death of the Settlor the surviving spouse receives a life estate and the children receive the remainder interest, that distribution would fail even though the distribution under the intestate statutes ends-up the same way as provided for in the Trust.

Examples:

Example One.

Title to homestead property is vested solely in a Trustee of a revocable trust, who is the Settlor of the Trust. The Settlor dies survived by a spouse and adult children. Since there are no minor children, only the spouse devise restriction applies. Remember “Spouse = Spouse Only”. So, you have to view the Trust as if it is a Will to ascertain whether the Trust expressly transfers complete ownership of the homestead property to the Settlor’s spouse on the death of the Settlor. If the Trust does not clearly transfer a 100% ownership interest in the homestead to the surviving spouse upon the death of the Settlor, the “Spouse Only” devise restriction applies because the only person that the homestead can be transferred to through the Trust, in this situation, is the spouse of the Settlor.

If the Trust does not clearly give the homestead to the surviving spouse upon the death of the Settlor, the attempted transfer of the homestead through the Trust to people other than the spouse would fail, and the homestead would pass like intestate (no Will) property, pursuant to F.S. 732.401(1), to the surviving spouse for life and the remainder interest to the adult children. In a non-Trust situation, pursuant to F.S. 732.401(2), the surviving spouse may elect to take an undivided one-half interest in the homestead in lieu of the life estate, it is not clear as to whether that election is applicable in a trust situation. However, when the surviving spouse deeds out, we don’t want the deed to limit the conveyed estate to a “life estate”, the deed should be for a full fee interest.

Who do we need deeds from in this Example?

• Successor Trustee. The successor trustee should convey individually and as successor Trustee of the trust. However, if the Successor Trustee is NOT also a beneficiary of the trust, then the Successor Trustee will not have to execute the deed in his/her individual capacity. In that event, the Trust Certificate will need to confirm that the Successor Trustee is NOT a beneficiary of the trust.
• Settlor’s Surviving Spouse – who is usually the successor trustee.
• Settlor’s children (lineal descendants)
• Affidavit Confirming Heirs. Instead of requiring a probate on the deceased Settlor/Trustee, we will accept an Affidavit from the surviving spouse and all of the children of the deceased Settlor/Trustee confirming that those children are all of the children [lineal heirs] of the deceased Settlor/Trustee. The Affidavit must be recorded.
• Record a Trust Certificate signed by the Successor Trustee.

Example Two

Title is vested in husband and wife as Co-Trustees of their revocable trust. They are both Settlors of the Trust. The Husband dies survived by a spouse and adult children. We have the same result as in Example No. 1. Since there are no minor children, the only devise restriction that applies is the Spouse Restriction. Remember “Spouse = Spouse Only”. So, as in Example No. 1, you have to view the Trust as if it is a Will to see if upon the death of the Settlor, the Trust gives the homestead to the deceased Settlor’s spouse.

If the Trust does not clearly give the homestead to the surviving spouse upon the death of the Settlor, the “Spouse Only” devise restriction would apply because the only person that the homestead can be transferred to through the Trust in this situation is the surviving spouse of the deceased Settlor. If the Trust does not clearly give the homestead to the surviving spouse, the attempted transfer of the homestead through the Trust of less than a 100% interest in the homestead to the Settlor’s surviving spouse would fail, and the homestead would pass, like intestate property under F.S. 732.401(1) to the surviving spouse for life and a remainder interest to the adult children.

Who do we need deeds from?

• Successor Trustee. The successor trustee should convey individually and as successor Trustee. However, if the Successor Trustee is NOT also a beneficiary of the trust, then the Successor Trustee will not have to execute the deed in his/her individual capacity. The Trust Certificate will need to confirm that the uccessor Trustee is NOT also a beneficiary of the trust.
• Settlor’s Surviving Spouse
• Settlor’s children (lineal descendants)
• Affidavit Confirming Heirs. Instead of requiring a probate on the deceased Settlor/Trustee, we will accept an Affidavit from the surviving spouse and all of the children of the deceased Settlor/Trustee confirming that those children are all of the children [lineal heirs] of the deceased Settlor/Trustee. The Affidavit must be recorded.
• Record a Trust Certificate signed by the Successor Trustee.

Example Three

Title is vested in husband and wife as Co-Trustees of their revocable trust. They are both Settlors of the Trust. Husband dies survived by his spouse and adult children. We have the same situation as in Examples 1 and 2 except one fact regarding the Trust will be changed below. As in Examples 1 and 2, since there are no minor children, the only devise restriction that applies is the Spouse Restriction. Remember “Spouse = Spouse Only”. So, as in Examples 1 and 2, you have to view the Trust as if it is a Will to determine if, upon the death of the Settlor, the Trust transfers the homestead to the Settlor’s spouse.

The one fact that is different here from Examples 1 and 2 is that in this example the Trust expressly transfers the homestead to the surviving spouse after the death of the first Settlor/Trustee to die. Article X, Section 4(c) of the Florida Constitution and F.S. 732.4015(1), provide that: “the homestead shall not be subject to devise if the owner is survived by a spouse or minor child, except the homestead may be devised to the owner's spouse if there is no minor child.” In this Example, there are no minor children so the disposition through the Trust to the surviving spouse is valid.

Who do we need deeds from?

• Surviving Spouse - individually and as sole surviving Trustee of the Trust
• Do not need deeds from the children
• Trust Certificate signed by the Successor Trustee. Attach pages from the Trust confirming that upon the death of the Settlor, the Trust transferred 100% fee title in the homestead to the Settlor’s spouse. The Trust Certificate must be recorded.

Example Four

Title is vested in husband and wife as Trustees of their separate trusts. They are both Settlors of their separate Trusts. Husband dies survived by his spouse and adult children. As to title vested in the husband’s Trust, we have the same result as in Examples 1 and 2. Since there are no minor children, the only devise restriction that applies is the Spouse Restriction. Remember “Spouse = Spouse Only”. So, as in Examples 1 and 2, you have to view the husband’s Trust as if it is a Will to determine if, upon the death of the Settlor, the Trust transfers the homestead to the Settlor’s spouse as to the one-half interest owned by the deceased husband/Settlor/Trustee.

If the Trust does not clearly give the homestead to the surviving spouse upon the death of the husband/Settlor/Trustee , the “Spouse Only” devise restriction would apply because the only person that the homestead can be transferred to through the Trust, in this situation, is the surviving spouse of the deceased husband/Settlor/Trustee. If the Trust does not clearly give the homestead to the surviving spouse of the deceased husband/Settlor/Trustee, the attempted transfer of the homestead through the Trust to people other than the spouse, or of less than a full 100% fee interest to the surviving spouse, would fail and the homestead would pass like intestate property pursuant to F.S. 732.401(1) to the surviving spouse for life and a remainder to the adult children.

Who do we need deeds from?

• Surviving Spouse - individually and as successor Trustee of the deceased spouse’s Trust
• Surviving Spouse - individually and as Trustee of her Trust
• Children of the deceased husband/Settlor/Trustee
• Affidavit Confirming Heirs. Instead of requiring a probate on the deceased husband/Settlor/Trustee, we will accept an Affidavit from the surviving spouse and all of the children of the deceased Settlor/Trustee confirming that those children are all of the children [lineal heirs] of the deceased husband/Settlor/Trustee. The Affidavit must be recorded.
• Record Trust Certificate signed by the Successor Trustee of the husband’s Trust.
• Record Trust Certificate for the surviving spouse’s Trust.

Trust Requirements

If record title is vested in a Trustee of a Trust and there is evidence that the Settlor/Trustee is dead, make the following requirements: A. If the property was the homestead of ______________, deceased/Settlor/Trustee of the _______________ Trust dated _____________, and if _________________, Settlor/Trustee was survived by a spouse and no minor children, the following will be required:

1. Deed from ___________________, individually and as successor Trustee of the ___________Trust, joined by spouse if subject property is the homestead of the successor Trustee to ____________________, purchaser.

2. Deed from _______________, the surviving spouse of the deceased Settlor/Trustee to ____________________, purchaser.

3. Deeds from ________________________, the lineal descendants [children of the deceased Settlor/Trustee and children of deceased children of the Settlor/Trustee] of the deceased Settlor/Trustee to ____________________, purchaser.

Note regarding requirement A3 herein: deeds from the lineal descendants of ________________, deceased Settlor/Trustee will not be necessary if the Trust expressly provides that on the death of ________________, Settlor/Trustee of the ______________ Trust, that title to a 100% interest the homestead property goes to the surviving spouse of the deceased Settlor/Trustee.

4. If the deeds required in Subparagraph 3 herein are necessary, record an Affidavit of Heirship from the surviving spouse of the deceased Settlor/Trustee and from the children of the deceased Settlor/Trustee confirming that they are all of the children [and children of deceased children, if applicable], of the deceased Settlor/Trustee of the __________________________ Trust.

5. Record a Trust Certificate for the _______________ Trust dated _____________.

6. Record a Death Certificate for ______________, Settlor/Trustee of the _________________ Trust dated _____________.

B. If the property was the homestead of ______________, Settlor/Trustee of the _______________ Trust dated _____________, and if _________________, Settlor/Trustee was survived by a spouse and minor children, the following will be required:

1. Deed from ___________________, individually and as successor Trustee of the ________________ Trust, joined by spouse if subject property is the homestead of the successor Trustee to ____________________, purchaser.

2. Deed from _______________, surviving spouse of the deceased Settlor/Trustee to ____________________, purchaser.

3. Deed(s) from ______________________, the Judicially Appointed Guardian for _________________________ , the minor children of _________________ , deceased Settlor/Trustee to ____________________, purchaser.

• Record a certified copy of the Letters of Guardianship for _________________ the Guardian of ____________________.
• Record a certified copy of the Guardianship Order Authorizing the conveyance of the subject property by the Guardian for ________________________________ .

4. Record a Trust Certificate for the _______________ Trust dated _____________.

5. Record an Affidavit of Heirship from the surviving spouse of the deceased Settlor/Trustee and from the Guardian for the minor children of the deceased Trustee confirming that those minor children are all of the children of the deceased Settlor/Trustee of the ________________ Trust.

6. Record Death Certificate for ______________, Settlor/Trustee of the _______________________ Trust dated _____________ .