Real Estate

The Benefits of Hiring an Attorney When Purchasing a Home

 When purchasing a home, many legal issues can arise. Hiring an experienced real estate lawyer who is trained to handle the purchase and sale of real property is helpful to navigate the process. 

One of the most important aspects of any real estate deal is the contract. Although standard real estate forms may be used, an attorney can help you understand certain terms that can be confusing. They may also recommend the addition of specific language to reflect the buyer and seller’s agreement and wishes. Attorneys will work with your real estate agent in negotiating contractual terms on your behalf. It is important to ensure that your contract is in compliance with all state laws and county ordinances, and it should address any specific problems that might affect the future use of the property. 

Another important part of a real estate transaction is title insurance. Once you have signed the contract, you will need to obtain title insurance to ensure that the property is free of any encumbrances, such as liens or judgments, that would prevent the seller from having marketable title. A real estate attorney will examine recorded documents affecting title to the property, and then apply the Florida Uniform Title Standards to any title problems that arise during this review. Your attorney can explain the effect of any easements on the property as well as prior agreements or restrictions that were enforced by a prior owner. If the search reveals something problematic relating to title on the property, your attorney can advise you on how to proceed. 

Once you are ready to close on the property, your attorney can prepare all the important closing documents, such as the deed and the closing statement. Your attorney can help you understand the nature and amount of the closing costs, as well as provide advice as needed should any issues arise during the closing process. Once the deed and the mortgage paperwork are signed, your attorney can file and record these documents in the applicable county according to state law. 

Obtaining an attorney is extremely beneficial when it comes to the intricacies involved in real estate transactions. Buying a home is one of the largest purchases you will ever make. An experienced real estate attorney helps to represent your best interests and ensures that the entire process follows the applicable laws of Florida and the county in which the property is located. 

Real Estate

I CAN SEE CLEARLY NOW, IT’S NOT CLOUDY

When purchasing real property in Florida, people will often tell you to make sure that you get “clear title” or “good title” to the property. That sounds like good advice, but what does it really mean? First of all, title is the legal right to control and dispose of property. A deed is evidence of having title to real property, and the different types of deeds were discussed in one of our recent articles. Clear title and good title are different ways of referring to having marketable title to real property. A common definition of marketable title in Florida is title “which a reasonable, prudent person would accept in the ordinary course of business after being fully apprised of the facts and the applicable law.” Additionally, title is marketable if it is free of “clouds” or “defects” such as adverse rights, interests or liens. 

The Florida Uniform Title Standards are a reference for determining whether title is marketable. The preface to the Title Standards describes a title standard as “a voluntary agreement made in advance by members of [The Florida] Bar on the manner of treating a particular title problem when and if it arises.” The Title Standards have not been formally approved by any court or legislative body; however, they are well established principles used by real estate attorneys in Florida when examining title to real property. 

Obtaining title insurance when purchasing real property is the typical way of determining that title is marketable. A real estate attorney will examine recorded documents affecting title to the property, and then apply the Title Standards to any title problems that arise in the examination. Typically a buyer will have a contractual right to object if a seller’s title to real property is unmarketable. Assuming the seller’s title is marketable, the parties can proceed to closing and the buyer will receive an owner’s policy of title insurance. Title insurance is an indemnity against loss resulting from a title defect. If a defect is discovered after closing which renders title unmarketable, and the title insurance policy did not except or exclude the defect from coverage, then the title insurer will typically have to pay up to the policy limits to have the defect removed. 

One of our experienced attorneys can help you with your title questions, as well as closing your real estate transactions. 

Real Estate

Understanding Deeds

For first time homebuyers, or even experienced homebuyers, there are many different aspects of a real estate transaction that seem confusing. One of the most confusing areas can be understanding the different types of deeds. 

A deed is a legal document that transfers the title of real property from the seller to the buyer. In Florida, there are three main types of deeds: general warranty deeds, special warranty deeds and quitclaim deeds. The central differences between these deeds are the covenants (also known as agreements) and warranties that are conveyed by the grantor (the transferring party) to the grantee (the party receiving the deed). 

A general warranty deed gives the buyer the highest level of protection as it provides significant assurances conveyed by the grantor to the grantee. This deed promises that the seller owns the property, has the legal right to sell the property, and that the property is free of liens or encumbrances. In addition, the general warranty deed includes a promise that the new buyer’s ownership will not be impacted by a third-party claim against the property, the seller promises to defend the buyer’s title and will continue to do whatever may be reasonably necessary in the future to perfect title for the buyer. Because of the protections that come with a general warranty deed, this type of deed is the most commonly used deed in sales of residential properties. 

The second type of deed, the special warranty deed, doesn’t provide as much protection for the grantee as the general warranty deed mentioned above. In a special warranty deed, the grantor promises only that the grantor did not create title defects. The grantor is not responsible for and represents nothing about any claims or title defects that arose prior to grantor’s ownership of the property. This type of deed is more commonly used in sales of commercial property. 

Lastly, a quitclaim deed provides the least amount of protection for the grantee. This deed simply transfers any interest that the grantor may have in the property to the grantee and does not warrant the grantor has any interest in the property at all to convey. While the quitclaim deed may seem risky for the grantee, it is useful in some scenarios. It’s commonly used between family members to retitle property, such as adding or removing a family member from the title, in times of divorce or to clear up questions of title on a property with persons of unknown interest. 

The different types of deeds may seem complicated, but an experienced real estate attorney can make sure all of your closing documents are prepared properly and represent your best interests. 

Miranda K. Martinez is a 2019 graduate of Stetson University’s College of Law and recently joined Clark, Campbell, Lancaster & Munson, P.A., in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

Implied Warranties When Selling Residential Real Property

When purchasing residential real property, purchasers and sellers should consider warranties that the seller will provide to the purchaser. Typically, warranties are expressly stated in the contract the purchaser and seller negotiate. However, new home builders who sell residential real property provide certain minimum warranties to the purchaser, regardless of whether or not those warranties are included in the contract. It is important to recognize these warranties exist and that new home builders may disclaim certain aspects of the warranties using the correct contract language. 

Warranties that are included in the sale of property or goods that are not included in the contract are known as implied warranties. There are several implied warranties that Florida courts applied to the sale of residential real property. These include: (1) the implied warranty to construct according to plans; (2) the implied warranty to construct in a workmanlike manner; and (3) the implied warranty of habitability. 

The implied warranty to construct according to plans concerns a warranty from the builder of a new home to the purchaser that the purchaser’s new home has been built according to the specifications outlined in the building plans. This is breached when the builder failed to construct the building according to those construction plans and the purchaser suffered damages as a result of that failure. 

The implied warranty construct in a workmanlike manner means that the home is constructed in a manner that is in accordance with the accepted norm of the industry. This warranty may be breached when the builder sold construction materials and workmanship, had a reason to know the particular purpose for the construction, the purchaser then relied upon the builder’s skill or judgment for the construction, and then the final product was defective and the purchaser suffered damages as a result. 

Finally, the implied warranty of habitability warrants that the newly constructed residence does not contain any latent defects that would make the residence unfit for living within. A breach of this warranty may occur when a purchaser takes possession of a new residence and a latent defect in the residence makes the premises uninhabitable. 

So, what if the seller of a home wants to preclude certain aspects of an implied warranty? Under Florida law, the seller and purchaser may exclude certain and specific items from an implied warranty through a disclaimer with clear and unambiguous language that clearly reflects both parties’ expectations as to what items are not warranted. This means that general or broad disclaimers of implied warranties are not effective to disclaim specific items covered in an implied warranty. 

Most of the law regarding implied warranties is not contained in the Florida Statutes, but rather is case law created by judges in different judicial circuits throughout the state of Florida, making the rulings on implied warranties inconsistent throughout the state. As always, when preparing contracts involving real property, it is important to consult with an attorney about important issues such as implied warranties. 

Real Estate

Borrowing Money Secured by Real Estate

When borrowing money to acquire or refinance real property in Florida, the lender will prepare an entire loan package for you to sign at closing. The two main documents in the loan package are the promissory note and the mortgage. The promissory note creates the primary contractual obligation for you to repay the loan to the lender. Generally, the note will include things like the amount that you are borrowing, the term of the note, the interest rate being charged and the amount of your payments. You will want to look carefully at other provisions of the note that could impact repayment, such as late charges, default interest rate and prepayment provisions.

The mortgage secures repayment of the promissory note. It will be recorded in the public records of the county where your real property is located. The mortgage will typically have representations and warranties that you make to the lender regarding you and your ownership of the property. Additionally, the mortgage will have covenants with which you will be required to comply as long as your loan is outstanding. Typical mortgage covenants include things like maintaining the property, keeping the property insured and paying the real estate taxes. According to Florida law, a mortgage only grants a consensual lien on the real property in favor of your lender and is not deemed to be a conveyance of the legal title or the right of possession; however, the mortgage will also contain default provisions and what the lender’s remedies are in the event of a default. A typical remedy is judicial foreclosure of the lien, which could result in the lender ultimately owning your property if you do not repay the loan.

Promissory notes and mortgages are subject to documentary stamp taxes in Florida. These documents are taxed at a rate of 35 cents per $100, or any fraction thereof, of the amount of the indebtedness indicated in the document. Mortgages are typically also subject to a nonrecurring intangible tax imposed at the rate of 2 mills (.002) on each dollar secured by the mortgage. Note that some mortgages, such as those in favor of a credit union, are exempt from the intangible tax.

One of our experienced attorneys can help you with your loan questions, as well as closing your real estate transactions.

Real Estate

The Impact of Easements on Real Property

By: Kyle H. Jensen

A person interested in purchasing real property should always determine whether any easements burden or benefit the real property and the impact such easements have on the real property. An easement is a right held by a person to use another person’s real property, or portion thereof. Generally, easements provide non-owners with the right to have access over, run utilities through, or drain onto a portion of an owner’s real property. Easements can be granted to specific individuals or for the benefit of the owners of other real property not burdened by the easement. An easement burdens real property when the real property is subject to and restricted by the rights granted by the easement. An easement benefits real property when the real property and its owner are benefitted by and entitled to use the rights granted by the easement.

It is important for purchasers to determine if there are any easements that burden the real property they are interested in because such easements may restrict or even prohibit a purchaser’s intended use or development of the real property. If, for example, an access easement runs over a portion of the real property where the purchaser wants to construct a building, the purchaser would be prohibited from constructing such building because it would block the access easement rights granted to another party. There may be ways to work around the easement, such as relocating the easement area or constructing improvements that do not block the easement; however, a purchaser should always resolve these issues before closing to avoid purchasing real property that cannot be operated or developed for its intended use.

It is also important for prospective purchasers to determine if there are easements that benefit the real property they are interested in, or if they need to obtain a beneficial easement, especially when purchasing vacant property. If a purchaser is interested in real property that does not have access to a public road, then such purchaser must either confirm the real property is benefited by an access easement that provides the real property with sufficient access to a public road or require the seller to obtain an access easement. A purchaser should remember that even if the real property has access to a private road, there is no guaranty that the owner of the real property has the right to use such private road unless there is an easement that grants such rights. Furthermore, when purchasing vacant property, a purchaser should determine whether the real property has access to utilities, and, if not, require the seller to obtain utility easements from the adjacent real property to provide necessary access. Accordingly, purchasers should always carefully inspect all easements that burden or benefit the real property they intend to purchase. Failure to do so may result in purchasing real property that cannot be used or developed in the manner the purchaser intended.

Kyle Jensen is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

Eminent Domain and Just Compensation

By: Zachary H. Brown

How does government acquire the land it uses to install utilities or construct new roads? It exercises an authority that is called eminent domain. Eminent domain allows the government to take private property if it is for a “public use.” The phrase “public use” is contentious since, depending on who is defining it, could greatly limit or increase the government’s authority to take private property. This article gives some background on what eminent domain is, and how property owners can either fight it or at least be fully compensated for it.

The Fifth Amendment to the United States Constitution, in part, reads that no person shall be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” Courts have usually deferred to what the legislature defines as “public use” rather than deciding for themselves. A generic definition of a public use is that the property does not have to be used by the public, but rather the property must be taken for a public purpose. Courts have ruled that this public purpose can be served through a governmental department, or even a private enterprise, and still satisfy the “public use” requirement.

Governments use eminent domain for a number of different reasons. Some are obvious, but others are somewhat surprising. Eminent domain is most commonly used when governments have to do things such as acquire land for roads, or build power lines, where the government is providing an important function to the local community. However, government will, in some cases, acquire downtrodden or “blighted” areas of the community and attempt to redevelop them in order to increase the economic and cultural output of those areas. Governments can do this because positive economic development is a good for the public, therefore the taking of private property is done for a public purpose.

As mentioned, government can only take property using eminent domain when it gives the property owner just compensation. What exactly is just compensation? Most people would say the fair market value of whatever land the government is trying to take. However, the question can be more difficult than that. What if the property has structures on it, connects one piece of the property owner’s land to another, or the taking negatively impacts the use of the remainder of their property? Florida law dictates that the answer to those questions is something that is decided by  a jury selected from citizens in the local community.

If a property owner feels that the compensation offered was not just, challenging the government can get expensive. That’s why the Florida Legislature has enacted a law that states the property owner has a right to reasonable attorney’s fees and appropriate expert costs for eminent domain proceedings in the Circuit Court. There are limits on this right, and courts have held that this right only extends to fees that are “incurred in the defense” of eminent domain proceedings. It is important to consult with an attorney before deciding if an eminent domain case is worth fighting in court.

Eminent domain is a powerful, but very necessary, tool the government uses to provide important functions for its constituents. However, it can be an infringement on private property owner’s rights unlike anything else the government does. If you become aware of or receive notice of an eminent domain action that may impact your property, it is important to consult with a local attorney about the rights and remedies that you may have.

Zach Brown is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

Distinguishing Variances and Special Exceptions

By: Zachary H. Brown
Clark, Campbell, Lancaster & Munson, P.A.

There are many avenues that property owners could travel to get around certain restrictions that local governments impose upon property throughout their jurisdiction.  Sometimes local governments will restrict, for example, how high buildings can be built, or how property can be used.  Such restrictions play an important role in how local governments plan and zone our communities.  The most common tools that allow property owners to get around these restrictions are variances and special exceptions.

The primary difference between a variance and a special exception is that a variance grants a property owner the ability to use his or her property in a manner that is completely against local regulations, while a special exception is a circumstance that local governments specifically recognize before drafting a law, and will make provisions that recognize exceptions in the regulation itself.  Each tool comes with its own benefits and drawbacks, but after a brief explanation they may be slightly easier to understand for property owners seeking to develop their property.

A variance is granted only when a property owner shows an undue hardship created by unique circumstances that the property owner did not create.  The law is very clear that if the hardship is created by the property owner, a variance should not be granted.   For example, is a hardship self-created if you buy a piece of property expecting to put a gas station on it, but local zoning laws prohibit gas stations in that zone?  Florida courts have held in that situation, the hardship was self-created because that person knew of the zoning laws before buying the property, and thus created the hardship for himself.  In essence, ignorance of local laws does not create undue hardships for property owners.

Typically, variances can fall into two categories – use variances and area variances.  Use variances allow for property owners to use their property in a way not allowed by law, such as using your property in a zoning district that prohibits certain uses.  An area variance allows property to be developed in a way that violates some dimensional requirement imposed by local regulations.  This is most commonly found in height restrictions or setback requirements in local land development codes, where those restrictions limit development in such a way that development of the property is considered impossible.

Special exceptions are used by local governments when a particular use of the land is potentially problematic, but can be allowed if subjected to heightened development standards.  These are also frequently referred to as special use permits or conditional use permits.  Common examples of special exceptions are adding religious buildings or schools to local neighborhoods where residential property is the primary use.  Local governments will grant these requests, but likely only by requiring certain “conditions” be met prior to approval of the use.  There are a number of different conditions local governments can impose, but a few of them include landscaping features, parking upgrades, or right-of-way conveyances.

These are just a few common tools that are available for those property owners seeking to develop their property.  As always, the best course of action is to retain a local attorney to assist with this process.

Zach Brown is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

Defect Disclosure Requirements for a Residential Sale

Historically, when real property was being bought and sold the doctrine of caveat emptor or “let the buyer beware” controlled. Under this doctrine, it was the buyer’s sole responsibility to determine if any defects were affecting the property and the seller had no obligation to bring such defects to the buyer’s attention.

Many jurisdictions, including Florida, have abandoned the doctrine of caveat emptor to an extent and have created a duty for sellers to disclose certain defects. In a Florida residential sale, where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer. If the seller fails to disclose latent defects, then the buyer can bring a lawsuit against the seller for damages relating to any such defect.

Importantly, selling a house “as-is,” or including an “as is” clause in a residential sales contract does not excuse the seller’s duty to disclose latent defects. An “as-is” sale is a sale in which the seller has no obligations to make repairs to the property but the seller still must disclose any known latent defects.

When selling your home, it is important to make any disclosures regarding potential latent defects in writing. If you make disclosures regarding latent defects orally you may have difficulty proving at a later date that you made the disclosures. If a buyer then brings a lawsuit against you for failing to disclose a latent defect, you might not be in as strong a position as if you had made the disclosure in writing at the outset. As a best practice, when disclosing latent defects, do so in writing.

A seller is only responsible for disclosing latent defects which the seller has actual knowledge. A seller’s obligation to disclose latent defects does not turn the seller into a guarantor as to every condition of the house being defect-free. If a buyer purchases a home and discovers a latent defect, he or she will not be able to hold the seller liable unless the seller knew of the defect and the defect materially affects the value of the property. This protects sellers from being in the almost impossible position of being responsible for any latent defect in a home that becomes known to a buyer after the sale.

The Florida statutes make certain exceptions regarding disclosure of some latent defects which certain buyers may consider to be material. For example, a seller has no obligation to disclose that an occupant of the property is infected with HIV or AIDS; or that the property was the site of a homicide, suicide, or death.

If you have purchased a home and discovered a latent defect for which you believe the seller had actual knowledge and failed to disclose, you should promptly consult with an attorney to explore any legal options you might have. Similarly, if you are a seller who

has been contacted regarding a claimed latent defect in a house you sold, you should promptly contact an attorney to discuss your legal options.

Matt Kelly is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

To Survey or Not To Survey

By: Kyle Jensen, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Q: Should I obtain a survey for real property I am purchasing?

There are many issues a buyer must consider and pitfalls a buyer must avoid when purchasing real property, regardless of whether the buyer is acquiring a large commercial center or the buyer’s first home. Accordingly, an experienced buyer will thoroughly investigate prospective real property to determine whether such real property is suitable for the buyer’s intended purposes. One of the most important steps buyers often take when investigating real property is to obtain a survey.

A survey of real property is, in part, a depiction of the real property that portrays its boundary lines and dimensions and all of the improvements, easements, and other attributes located within the real property. The survey allows the buyer to, among other things, confirm the actual boundaries and dimensions of the real property, confirm none of the neighboring properties’ improvements encroach upon the real property, and confirm none of the improvements located on the real property encroach upon any easements or encroach into any adjacent property.

Once a survey is obtained, the buyer should thoroughly review the survey, with the assistance of a knowledgeable real estate attorney if possible, to determine there are no major defects on the real property, and that the real property is suitable for the buyer’s intended uses. For example, if a buyer purchases a residential home with the intention of constructing a porch on the back of the home, the buyer should confirm there are no easements or other encumbrances running behind the home that would prevent the buyer from constructing such porch; or if a buyer purchases a commercial property within a busy commercial center, the buyer should confirm none of the improvements located within the real property, such as the building sign, encroach upon the adjacent property.

The failure to obtain, or thoroughly inspect, a survey of real property can cause significant problems for the buyer after closing. In the examples above, the buyer of the residential property may be prohibited from constructing a porch in his or her back yard because the buyer failed to discover a utility easement in favor of a local utility company running behind the home; or the buyer of the commercial property may be required to demolish and rebuild its sign because it failed to discover the sign was actually located on adjacent property.

Therefore, while it may be tempting for a buyer to forego obtaining a survey in an attempt to save money, failure to obtain a survey can actually cost a buyer money in the long run, and, in the most severe of situations, may result in the buyer being unable to utilize the real property for the buyer’s intended purposes.

Kyle Jensen is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.