Last Update: 02/24/16
Florida law is very protective of land titles and there are lots of legal requirements to be met in documenting ownership of real estate. For instance, real estate ownership must be documented in writing and that document must meet certain legal requirements. (See Florida Statute 689.01 et seq.) Why? Strict laws are needed to protect ownership and transfer of land – as well as providing recourse when fraud or wrongdoing occurs.
Above: Forged land documents are not new as shown by this 1748 forgery of a land grant involving famous American forger James Reavis.
Florida Real Estate Transfers Ownership Via a Deed
Ownership interest in land is shown in Florida by a document known as a “deed” which is filed in the real property records of the county in which the land sits.
There are several kinds of “deeds” in Florida, however, depending upon the type of ownership involved and the “warranty” of title that is being given by the Seller (or Grantor) of the land to the Buyer (or Grantee).
Here are three common types of Florida deeds:
1. Florida General Warranty Deed: This is the biggie. Here, the Grantor (Seller) conveys to the Grantee (Buyer)100% of their right, title, and interest in the real estate and also warrants that the Grantor is the legal owner of the land and that land is owned free and clear. A General Warranty Deed conveys “absolute fee simple” in the real estate – and if there is a challenge, the deed protects the Grantee because the Grantor will be legally bound to defend against any claims made against the land by anyone or anything.
2. Florida Special (or Limited) Warranty Deed: This is not as good for the Buyer. This deed is the same as a General Warranty Deed EXCEPT that the Grantor isn’t promising and duty bound to defend that Grantee from any future challenge to the 100% right into the real estate as shown on the deed. Property held by lenders after foreclosures usually passes into the hands of future buyers via this type of deed.
3. Quit Claim Deed: It’s a toss of the dice here because the Grantor conveys whatever right and interest in the real estate that he or she may have (if anything). If it turns out that under Florida law, the Grantor owned zip of the real estate, then this deed conveys zip to the Grantee. These are used in divorce cases where one spouse conveys property to another as part of the divorce settlement.
Florida Scam Alert: Bank-Owned Foreclosed REO Property Being “Sold” With Fraudulent Deeds to Unsuspecting Buyers
With all the vacant homes sitting in Florida neighborhoods, owned by Florida banks after foreclosure, it’s no wonder that evildoers are thinking up ways to take advantage of the situation. A few months ago, the story of Presscott Rosche was making news: seems Pressott Rosche (some sort of partnership) was using phony deeds on foreclosed properties to substantiate “ownership” in dozens of homes which it was then renting out to unsuspecting tenants.
The Miami Herald reported in March 2013 that there were over 6200 homes owned by banks in Miami-Dade County, and that in 2012, two people were arrested in Broward County for trying to get homes via forged deeds.
Larry Tolchinsky’s Tip:
Recently, Old Republic (via TheFund.com) sent a warning out to Florida foreclosure defense lawyers that they were finding several claims coming out of the State of Florida where there were foreclosed properties owned by lenders (Bank REO Properties) that were attempting to transfer title via fake deeds were FORGERY is involved.
According to what Old Republic is seeing come across its desks, the fake deeds are “special warranty” deeds with a notarized signature of someone who is shown to be a Bank Officer (and often the notary is from South Carolina). The “grantee” in the deed is a Trust. Interestingly (and one clue that something’s wacky here), the grantee is not a person – in the case of a trust, you would expect to see the name of an individual named in their role as “Trustee for the [insert name] Trust.”
Old Republic reports that the land itself may have sat in the trust’s “ownership” for several months so it doesn’t appear to be a fast flip of land for a quick sale (and grab of cash). Not many stamps are paid (another clue).
Which means that there are innocent buyers buying land from lenders as foreclosed REO property and they are not getting good paper for the deal. Lenders will be responsible here: banks are going to have to make things right, usually with a formal Quiet Title lawsuit filed in a Florida court, to get official confirmation of the bank’s ownership of the land and therefore, the ability of the bank to transfer title to that innocent buyer.
Do you have a good deed on your REO Foreclosure Land?
If you have bought land that was foreclosed upon by a Florida bank, then you may want to check to make sure that your REO deed (or one in your chain of title, if you bought a home or condo from someone who had got the property in a bank REO foreclosure sale) is valid.
Call and make sure that the “officer” on the deed really works at the bank. Call and chat with a Florida foreclosure defense attorney about your concerns. It’s important to know that your land title is conveying clear title to you — because if it’s not, that’s a bug that is going to come back and bite you in the future when you try to sell the land – or someone else walks up, claiming an ownership interest.
A good piece of advice when you and your family are purchasing or selling your family home in one of the biggest transactions of your life is to at least talk with a Florida real estate lawyer. Getting someone to review all of the paperwork including the all important promissory note, isn’t as costly as most of us think it is. And it’s always a lot cheaper than paying to fix a problem after a closing occurs. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
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