DAVID A. SILVERSTONE
FLORIDA PROBATE AND ESTATES LAWYER.
Florida Real Estate Law FAQ
1) When I am purchasing a property, do I need an attorney to review the contract?
Yes. A purchase of real estate involves substantial financial investment. Even a standard form real estate contract contains many provisions which the average person is not aware of or does not understand. Most people have no knowledge as to the events which must take place leading up to a real estate closing, what the typical costs are, what the inspection and repair obligations are of the parties, how long it takes to get final mortgage approval, and what disclosures must be made. Having an expert with experience and knowledge of the legalities of real estate transactions and contracts working for you can give peace of mind, save money, and, more importantly, avoid costly mistakes, misunderstandings, and misrepresentations all of which could result in litigation.
2) If I am buying real property, do I need a lawyer to represent me at the closing?
It is recommended, that each party be represented by a real estate attorney. At a closing, the parties are shown a closing statement, which contains many numbers. The average person does not know whether the charges on the closing statement are proper, nor whether they are correct. Most people just accept the numbers as correct. An experienced real estate attorney knows how to read the closing statement, and may find substantial errors or overcharges which, when corrected, can save you money.
Every closing must have either a title company or an attorney represent the buyer, as the “settlement agent” or “closing agent”. The closing agent insures the title, coordinates the closing, prepares the closing statement, handles all of the funds, and records all of the documents. The advantage of using an attorney instead of a title company is that you will have legal representation with an attorney. An attorney has a duty to protect your interests at a closing, which means pointing out problems, advising you as to your rights, and advocating for you in the event of problems. Title companies cannot advise you as to whether the transaction is fair, whether it complies with the contract, or whether it is in your best interest.
In a real estate transaction, you may find “advice” coming from many quarters; from the realtor, from a mortgage broker, from a title company. The “advice” coming from those parties may be more calculated to ensure that they receive their commission, rather than to ensure that you receive a fair deal. They may take advantage of your lack of knowledge. Only an attorney is under a duty to properly advise you.
3) What is the Homestead Exemption?
Florida’s homestead exemption has several aspects. A “homestead” is defined as a person’s primary residence. There is a tax exemption. The first $25,000.00 of the value of a homestead is exempt from property taxes.
The homestead tax exemption must be applied for at the Property Appraiser’s office. They require you to bring a recorded copy of your deed, and of your closing statement, as well as two forms of identification. The deadline for filing for the homestead exemption for year is March 1st of the year following the year you bought the property. However, you must have owned the property since January 1st of that year to qualify.
Florida’s homestead law also prevents one spouse from selling or mortgaging the homestead without the other spouse’s signature. This is an important protection, which protects the family home, and can prevent fraud, especially in cases of divorce.
Florida’s homestead law also protects a person’s property from their creditors taking the property to satisfy debts. It also protects the homesteaded property against most judgments and liens.
4) Why should I put my spouse’s name on the title to the property?
The legal term for holding title to real property as husband and wife is called a “tenancy by the entireties”. It is very beneficial to own real property as tenancy by the entireties. When property is titled this way, the property is protected from judgments and liens against just the husband or just the wife. In order for a judgment or lien to be enforceable against property held as tenants by the entireties, the judgment has to be against both husband and wife.
5) I want to sell my deceased father’s/mother’s husband’s/wife’s property. Do I have to go through probate?
That depends. If the deceased person held title jointly with another person, either as “husband and wife” (tenants by the entireties), or as “joint tenants with right of survivorship”, then the property automatically passes to the surviving person(s) named on the deed. If, however, title is held solely in the deceased person’s name, then the property must go through probate. Probate is a court proceeding where a judge determines who has inherited the property, and enters a court order transferring the property to that person or persons. Until this is done, the property is in “legal limbo”, since no living person has any right to the property until it goes through the probate courts.
6) I am in the process of getting divorced, and I want to buy a property. Can I do this without my spouse claiming some interest in the property?
It can be done, but there are major pitfalls. Generally, during divorce proceedings, all real property and personal property owned by either party is subject to being divided between the parties. Usually the mortgage company wants the spouse to sign off of the mortgage. A divorcing spouse may not wish to sign a mortgage with their soon-to-be ex spouse. It is generally better to wait until the divorce is complete before purchasing real property. If you wish to still do this, it is essential that you consult with an experienced family law attorney, who may be able to draft a binding agreement with the other spouse with regard to the property.
7) What is Title Insurance, and do I need it?
Title insurance is an insurance policy which states that you had clear and marketable title to real property at the time your deed was recorded. As with other types of insurance, it seems like an unnecessary expense until you need it. Why do people need it? What if you bought a home from Mr. Jones, and then after you started living there, you got served with a lawsuit from Mrs. Jones, claiming her signature on the deed was a forgery, and asking that you give the property back? What if you went to sell your home, and you found out that there are judgments and liens on the property, which apparently were never paid off by the former owner, which you have to pay them in order to sell the property with clear title? What it you bought a property from someone who was being foreclosed upon, paid off their mortgage, and took title to the property, only to find that the foreclosure sale was never stopped, and someone else bought it at the foreclosure sale? These are all real examples of instances in which the title insurance company got involved to settle the problem. In each instance, they either settled by paying money, or they provided attorneys to represent the homeowners in court. In fact, all lenders require title insurance, but all purchasers need it as well in order to protect the substantial investment that real property is.