Your friend of a friend from Michigan, Mr. Buyer, tells you he is newly retired, single, and ready to start the next chapter of his life in the Sunshine State, so he reaches out to you as his real estate agent to begin the property hunt. Two weeks later, he has found his dream home and after several days of grueling negotiations, you are under contract! Fast forward, and inspections have passed, the property has appraised, loan approval has been met, and Mr. Buyer gets his clear to close. Everything is moving along perfectly… but wait, Mr. Buyer is separated from his wife and legally still married! Oh no!
While many states in the United States recognize legal separation, Florida is not one of them. When purchasing a primary residence in the state of Florida, the Florida Constitution grants homestead protection to its residents. Florida homestead rights dictate the spouse of the titleholder has rights to the property, regardless of whether both parties live at that property. According to the Florida Constitution, Article X, Section 4, whether you are married, married but separated, or married but going through a divorce, it does not matter. Until the divorce is final, when purchasing a primary residence, your spouse must sign the mortgage and other loan acknowledgments, even if they are not on the loan and never intend to live on the property.
So how can you get Mr. Buyer to the closing table without having his wife join in on the mortgage? There are two options:
1) If Mr. Buyer has the funds, he can purchase the property using cash; or
2) If Mr. Buyer is using the property as his secondary residence or an investment property, his lender can likely add a non-homestead recital clause to the mortgage which will avoid spousal joinder. An example of a non-homestead recital clause is “Mr. Buyer states that this Property does not constitute his homestead and that he resides at 1234 Primary Lane, Lansing, MI, 49528.” It is of utmost importance to mention that Mr. Buyer will be required to sign an Affidavit of Occupancy at Closing stating that he intends to use the property as his secondary residence or investment property. If Mr. Buyer lies on his Affidavit of Occupancy, it could open him up to liability for mortgage fraud.
If neither of the above options are viable choices and the property will be his primary residence, unfortunately, Mr. Buyer will be required to have his spouse sign off on the mortgage and sign a few other loan acknowledgments. When working with buyers who are obtaining financing for their purchase in Florida, we encourage you to have an upfront conversation about their intended use of the property with them. If the buyer is still legally married, it is better to know at the beginning of the home search, as opposed to days before closing.
As always, should you have any questions with regard to when a spouse is required to join in on a mortgage, or any other questions pertaining to Florida’s homestead protection, we urge you to consult with your local real estate attorney.
Mallory Moretti, Esq.
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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