Winter Park Home, Volume 8/ Issue 1, 2010
Legal document forms that are widely available on line, at office supply stores, and other similar sources may seem like a great money-saving option, but they can create serious problems when improperly prepared or used incorrectly. When clients call asking if they can prepare a deed, contract, or other real estate document, using one or more of these legal forms, I always caution them regarding the pitfalls. While simply filling in the blanks of these documents may appear self-evident and easy to do, there is no guarantee that individuals will prepare them correctly, execute them properly, or select the appropriate document for their particular purpose.
Let’s take a look at some of the problems that can result when deed are prepared by individuals other than a qualified real property attorney. The do-it-yourself results often create situations in which significantly more money may need to be spent later to fix a problem that could have been avoided by initially retaining a qualified real estate attorney to prepare the document correctly the first time.
David Jones, for example, agreed to sell property to his friends, Pete and Bessy Smith. To avoid costs, the parties agreed that Mr. Jones would prepare the deed and coordinate the execution and recording of the deed. The deed was properly notarized, but there was only one witness on the deed. Ten months after the deed was recorded a $50,000.00 federal tax lien was recorded in the public records against Mr. Jones. Two months later Mr. and Mrs. Smith decided they wanted to obtain a mortgage on the property, and were told by the title underwriter who would be insuring the mortgage that they (or Mr. Jones, who has left town) would first have to pay off this tax lien.
Mr. Smith called me for advice. I had to advise him that Florida law requires two witnesses for each grantor on a deed for it to be legally valid and enforceable. The federal tax lien against Mr. Jones, although recorded 10 months after the recording of the deed, does in fact attach to the Smith property. I further explain that, due to the lack of two witnesses on the deed, under Florida law this deed did not effectively transfer the property to the Smiths, which means Mr. Jones still retains an interest in the property. That property interest can be attached by federal tax liens and other judgment creditors of Mr. Jones.
If the deed had been recorded for more than five (5) years, and no liens had been filed against Mr. Jones during that time period, the lack of sufficient witnesses would be resolved by a curative Florida statute. However, for the first five years, any defect in the deed caused by lack of sufficient witnesses would prevent the buyer from having clear title to the property.
Consider the case of John Johnson. John owns a home. He and his wife, Mary, reside on the property. John wants to avoid probating his home after his death, and also wants to provide for his wife and two of his four adult children. John, as sole owner and grantor, conveys the property to himself, his wife, and his two children, all as joint tenants with rights of survivorship. Mary dies first and John’s death occurs later. The two children, as survivors under the joint tenancy provisions of the deed, sign a contract to sell the property. Under the terms of the contract, the Sellers obtain a title search of the property. The title commitment reflects that the property is now owned by the heirs of John Johnson – and not by the two children under the survivorship terms of the deed. The title commitment further provides that John’s estate must be probated to determine the current owners of the property. What went wrong? Homestead! Florida law provides that a husband can convey solely owned homestead property to himself and his wife. A transfer of any interest in homestead property to anyone other than the spouse is subject to the joinder requirement. In other words, since John’s wife didn’t execute the deed, the transfer to the two children is void, defeating the intent of the grantor.
Legal description errors often occur in home-made deeds. The test of the sufficiency of a legal description is whether a surveyor, by applying rules of surveying, can locate the property based solely on the legal description set forth in the deed. Let’s assume, for example, there are 10 Blocks in a subdivision, and that there is a Lot 5 in each of these Blocks. A grantor who owns Lot 5 of Block 1 mistakenly conveys Lot 5 in Block 9. This conveyance is obviously defective on its face. Often, the Grantor (or even the Grantee) will attempt to correct the legal description by re-recording the deed, after first striking through the defective portion of the legal description (Block 9), and inserting the correct legal description (Block 1). This “corrective deed” is not valid, since the deed, to be effective under Florida law, would have to be re-signed by the Grantor, re-witnessed, and re-notarized. In addition, the correction would have to be initialed.
Once a document has been recorded, the legal description cannot be unilaterally changed and re-recorded, unless it is re-executed with the above formalities. Alternatively, a new deed is needed. Otherwise, a quiet title action may be necessary to determine the ownership of the property. A new deed, prepared by an experienced real estate practitioner, would have avoided the effort and expense in curing this problem at a later date.
These are only a few examples of the many problems that can be created by a person who is not fully versed in Florida real estate law. In each of these examples, the Grantor would have saved considerable time and money if he had consulted with an experienced real estate attorney who understood the ramifications of Florida law in the preparation and execution of deeds.
Deeds and contracts are technical legal documents. They need to be accurately prepared, properly executed, witnessed, and notarized. Although non-professionals are not required by law to retain an experienced real estate attorney when preparing documents for their own personal use, these same individuals need to be aware that problems could result by incorrectly preparing or executing a document.
Let the preparer beware!Visit our website for more information on this subject.Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.
Orlando Sentinel, September 20, 2010
