In a blended or second marriage situation, we are often asked about taking title to Florida homestead property, and specifically, whether it is possible to take title without one of the spouse’s names on the deed.
From a title underwriter perspective, it is certainly possible to take title with only one spouse’s name on a deed, and even a deed to homestead property, BUT, there will be issues, as discussed below.
A related question we sometimes get is why a lender requires a spouse to “join” in the mortgage if they are not on the title and not on the note.
I am sure you all get the question asking why a spouse must sign a listing agreement and contract for sale when they are not on the title.
It all comes down to a spouse’s homestead rights in Florida. Homestead rights in Florida are established by statute, case law, and even the Florida Constitution. These rights substantially affect how homestead property is mortgaged, as well as conveyed during life and after death. And when Florida judges refer to Florida homestead rights as a “legal chameleon” and a “multi-headed hydra”, it is apparent that homestead issues are never simple.
In the big picture, if the real estate owned is a vacation or investment property and is not the permanent residence of the owner, then a spouse will not have “homestead” rights. But if it is homestead (and sometimes that can be a difficult legal and factual question), or will become homestead property, at that point, the spouse will obtain certain rights to the homestead under applicable law.
Homestead laws in Florida are very complicated, but for general purposes, cover three important areas:
- Asset protection – Homestead in Florida cannot be force sold (foreclosed) to satisfy creditor claims unless the creditor has a security or voluntary lien interest against the property (through a mortgage or a construction lien, for example). This is not really relevant to a spousal rights discussion, but this asset protection is a very important right and the property status as homestead should be reviewed to make sure it qualifies for that protection.
- Property tax – Homestead in Florida entitles the owner of the property to: a) claim a property tax credit by reducing the taxable value of the property by $50,000 (and possibly more if other exemptions apply); and b) cap annual property tax increases to no more than 3% per year. Again, this is not really relevant to a spousal rights discussion, except that it is often difficult for married couples to qualify for separate homesteads (e.g., wife in Florida, and husband in another state).
- Devise and Descent – Certain Florida statutes (and the Florida Constitution) provide a spouse certain rights to inherit homestead property, even if they are not named in title. To terminate or waive those rights, a binding pre- or post-nuptial agreement is necessary, in which a spouse affirmatively waives these spousal rights. Although the details of such agreements are best left to a separate discussion, there are strict requirements of full asset disclosure and adequate separate legal representation for these agreements to be valid. These agreements are obviously also useful to structure advance property settlement agreements for future separation and divorce, but that is not really a real estate title issue.
The take away is that when only one spouse is going to take title to homestead property in Florida, it must be made clear that the other spouse will still need to sign documentation regarding the mortgaging or conveyance of that property unless they have previously executed a valid and binding waiver of their Florida homestead rights.
Without a non-titled spouse signing a listing agreement and/or contract for sale, there is really no remedy for requiring that non-titled spouse to close. They are under no obligation to waive their homestead rights or sign any deed of conveyance, and they can’t be sued because they are not parties to the listing agreement or contract.
As always, for all contract matters for the purchase and sale of real estate, competent legal counsel should be used, not only to cover the real estate aspects of title, but also the preparation and counselling of both spouses when a pre- or post-nuptial agreement is needed.
Berlin Patten Ebling, PLLC
Article Authored by Chris Caswell, Esq. firstname.lastname@example.org
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