Real Estate Law Article

Selective Enforcement

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Is it important for homeowners associations to consistently enforce restrictive covenants and association bylaws and rules, especially when such covenants or rules are no longer desirable?

A: Homeowners associations and other “deed restricted” developments are communities with restrictive covenants and rules regarding use of property within the community. Generally, within these communities, an association is created with authority to enforce these restrictive covenants. If you live in a deed restricted community, and you would like to build a fence around your house, but the restrictive covenants prohibit construction of a fence, then even though it is your property, you cannot, excluding certain exceptions, construct a fence.

However, what happens if the association fails or selectively enforces its rules? The association consists of the property owners within the community, and its board consists of elected owners. Generally, these individuals are not attorneys with expansive knowledge of Florida law, or even their own declaration of covenants. Further, as time goes on, communities change, and restrictive covenants or rules that were desirable when the community was formed are no longer wanted or needed. As such, a community’s restrictive covenants, whether intentionally or otherwise, are oftentimes not enforced, or if they are, only sporadically and selectively.

While it may be tempting to ignore certain restrictive covenants, or provide exceptions to the same, associations should resist such actions. If an association fails to enforce a restrictive covenant, or if it enforces it only against certain owners, such restrictive covenant may become unenforceable. Therefore, if an association permits one property owner to build a cosmetically appealing fence in violation of the restrictive covenants, it may be prohibited from preventing another homeowner from constructing a fence that is much less appealing.

If there are certain restrictive covenants or rules that the association and its property owners no longer want to enforce, or at the very least want to lessen such rule’s restrictions, the better avenue, as opposed to simply ignoring these rules, is to amend the community’s covenants to reflect the desires of its owners. This will allow the association to continue to enforce its rules, while amending the rules to better conform to expectations and desires of property owners. Therefore, if a community desires to allow fences, but wants to limit types and dimensions of such fences, the association should amend its restrictive covenants to allow fences, and specifically provide for the types and dimensions of fences that are permitted.

The December 31st edition of “The Law” will discuss federal tax liens and their effect on the sale of real estate.


Real Estate Law Article

What is a Land Trust

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Should I use a land trust when purchasing property?

A: Land trusts first appeared in the United States in Illinois in the 1890s. Land trusts were codified in Florida law in 1963. During the past few decades, land trusts have grown in popularity among real estate investors purchasing property.

A Land Trust Agreement creates a land trust and vests title to real property in a trustee by a publicly recorded Deed conferring on the trustee certain powers and authority.

The buyer is the beneficiary of the land trust and chooses the trustee. Usually the buyer’s close friend, family member, business associate, or attorney serves as the trustee. Pursuant to the Land Trust Agreement, the beneficiary retains the power of direction to instruct and direct the trustee to act in accordance with the beneficiary’s wishes, and the trustee serves in a ministerial capacity.

A buyer may choose to use a land trust to keep his name out of the public records. The Land Trust Agreement can be kept confidential and prohibit the trustee from disclosing the details of the Land Trust Agreement without the beneficiary’s consent or court order.

In a land trust, the interest of the beneficiary is usually treated as personal property. This allows for easier transfer of the beneficiary’s interest by way of an Assignment of Beneficial Interest without the need for witnesses and public recording of a Deed.

A buyer may choose to use a land trust for liability avoidance reasons as well. According to law, the beneficiary of a land trust, solely by being a beneficiary, is not personally liable for any judgment, decree, or court order for a debt, obligation, or liability of the land trust.

If there are multiple buyers or a group of investors, each buyer or investor may own a percentage of the beneficial interest in the land trust property, and beneficiaries may own their interests as tenants in common, joint tenants with right of survivorship, or tenants by the entireties (i.e., husband and wife). Corporations, limited liability companies, and limited partnerships may also be beneficiaries under a Land Trust Agreement. In the event there are multiple beneficiaries, a Beneficiary Agreement should be implemented to govern the relationship among the beneficiaries in the event there is a disagreement or a beneficiary passes away.

The November 19th edition of “The Law” will review the standards and recent case law regarding whether private entities that work in concert with the government are subject to public records laws.


Real Estate Law Article

Protecting Tenants at Foreclosure

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Are tenants protected at foreclosure?

A: Yes, but right now only limitedly by a recent state law. Previously, the federal Protecting Tenants at Foreclosure Act prevented most banks or buyers obtaining a property through foreclosure from evicting rent-paying tenants without providing 90 days’ notice. And unless the buyer intended to occupy the home, he would have to respect the lease. That law expired at the end of 2014, and for the first five months of this year, Florida (like about half the states) had virtually no protection for tenants at foreclosure.

As of June 2, 2015, Florida enacted a law that requires merely 30 days’ notice to so-called “bona fide tenants” before removal after a foreclosure, regardless of the lease and regardless of whether the foreclosure buyer intends to occupy the property. A bona fide tenant, under both the expired federal law and the current Florida law, is better known as an “arms’ length tenant”, because he cannot be the prior homeowner’s child, spouse or parent and he needs to be paying at or near market value rent. Even though the new owner need not respect the lease, he must respect other tenant rights, such as the prohibition against the landlord locking out the tenant, turning off water or removing doors. Once the 30 days expires, a mere affidavit in the foreclosure action can be enough to get the tenant removed.

In short, Florida has created a 30-day notice requirement for tenants who are truly at arms’ length with their landlords and were occupying the premises before the foreclosure buyer obtained title. This is far short of the intended protections of the expired federal Act and puts us short of the protections of approximately a dozen other states. However, notably, the protections under Florida law appear to apply to other lien foreclosures in addition to just the traditional “federally related mortgage loan” covered by the federal Act.

 Although the more protective federal Act has expired, house and senate bills have been proposed this year to reenact the law.


The October 22nd edition of “The Law” will cover selecting the right attorney and title company services when dealing with real estate that is subject to a last will and testament.

Questions can be submitted online to

Real Estate Law Article

Title Insurance – Part 2

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: What is title insurance, and do I need to purchase it when buying a home?

A: Title insurance is essential for buyers and protects you from title issues that may not be known when you purchase. Before closing, the title company or attorney handling the transaction (known as the “closing agent”) provides a title commitment to the buyer. The commitment, based on a title search, indicates that the closing agent will issue an insurance policy assuring good, marketable title to the property. The policy insures up to the purchase price.

A title insurance policy typically protects against oddities or defects in the history of property ownership (the “chain of title”), including failure of a spouse to sign a deed conveying his or her ownership interest; long-lost heirs of previous owners claiming interest in your property; or unsatisfied or unreleased prior mortgages, taxes, judgments, or other liens. The commitment will contain exceptions limiting the buyer’s coverage. Having an attorney review the commitment prior to closing is wise.

In Florida, usually the seller pays for the “owner’s policy”, which protects the buyer. The standard form “As Is” Residential Contract for Sale and Purchase, which is the most common used in Florida, allows the seller to designate the closing agent, with the seller paying for the title search and owner’s policy.

In Florida, standard rates for title insurance are (a) $5.75 per $1,000 of coverage up to $100,000, (b) $5.00 per $1,000 from over $100,000 up to $1,000,000, (c) $2.50 per $1,000 from over $1,000,000 up to $5,000,000, (d) $2.25 per $1,000 from over $5,000,000 up to $10,000,000, and (e) $2.00 per $1,000 for over $10,000,000. For example, a seller would expect to pay a premium of $575 for an owner’s title insurance policy insuring a purchase price of $100,000. Homeowners should hold onto their policy documents after closing, because in certain circumstances, a cheaper “reissue rate” may apply if the seller can locate his prior policy.

For a general overview of the title insurance process, including the lender’s title policy, refer to our May 8, 2014 article written by real estate shareholder Michael Workman, available at

The August 27th edition of “The Law” will cover legal issues related to service providers, contractors, or employees who fail to do work when paid in advance.

Real Estate Law Article

Integrated Disclosure Rule

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: When closing on my home, I do not want to feel forced to sign documents without time to review and ask questions. Are there consumer protections for these transactions?

A: One measure is the new “Integrated Disclosure Rule”, which provides time for the borrower to review new Loan Estimate and Closing Disclosure forms. The Rule goes into effect for loan applications received by a lender on or after August 1.

The Loan Estimate will replace the current Good Faith Estimate (GFE) and initial Truth-in-Lending Disclosure (TIL), which are received by the borrower early in a real estate deal.  The Loan Estimate will be sent to the borrower within 3 business days of the loan application and, unless waived by the borrower, at least 7 business days before the borrower becomes contractually obligated to the lender (typically at closing).

The Closing Disclosure will replace the final TIL and Settlement Statement (HUD-1 or HUD-1A), which are often received by the borrower the day of closing and detail loan and closing costs, loan terms, title insurance coverage, and the balance due.  The Closing Disclosure must be received by the borrower at least 3 business days before closing.

These changes protect borrowers from pressure of reviewing a Settlement Statement at the last minute, without much opportunity to question differences between original estimates and final closing documents.

The Rule applies to most “closed-end” consumer real estate, construction-only, vacant land, and 25 acre (or more) mortgage loans.  It also applies to credit extended to certain trusts for tax or estate planning purposes.  Cash deals without a lender, “open-end” loans like home equity lines of credits (HELOCs), reverse mortgages, mobile home and unattached dwelling mortgages, and lenders making fewer than 5 mortgages a year are excluded.  Low-income housing assistance programs may be partially exempt.

An attorney is a wise decision in any real estate transaction to help you navigate through the purchase of your new home and to ensure your interests are protected.

The July 2nd edition of “The Law” will discuss the importance of distinctions between independent contractors and employees.

Real Estate Law Article

Toolbox Grows for HOAs with Delinquent Owners

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: How can homeowners’ associations collect assessments while awaiting a first mortgage holder foreclosure?

A: Depressed property values and myriad bank-owned properties have left lenders slow to foreclose. Homeowners may enjoy delay; but, HOAs can lose out on their assessments.

Recent changes in Florida law have altered the assessment collection landscape.

First, an HOA can now foreclose on its lien for unpaid assessments without cutting off a future buyer’s liability for past assessments. Associations now have an incentive to foreclose, take ownership and rent out the premises during the pendency of the first mortgage foreclosure.

Second, associations can now request an “order to show cause” at the outset of the mortgage foreclosure, forcing the court to require the homeowner to show cause for why a foreclosure judgment should not be immediately entered. This change may end up greatly reducing a lender’s delay.

As most associations are aware, associations typically can recover up to 12 months of past assessments from the foreclosing lender if the lender takes title after the foreclosure sale.

Please note, however, that a federal court in January cut off that liability because of lender-friendly language in one association’s governing documents. It is of the utmost importance for associations to review and amend documents as necessary to remove impediments to collecting assessments.

The March 13 edition of “Simply the Law” will cover maximizing homestead exemptions, particularly for senior citizens.

Questions may be submitted online only to