Is an attorney required in Florida to close on my real estate sale or purchase?

In many states, the services of a licensed attorney are required when the transaction involves real estate.  However, in Florida, an attorney is not required to close real property.  We recommend you always use the services of a real estate attorney. 

Isn’t it more expense to close with a real estate attorney than with a title agent? 

Our firm can close your important real estate transaction for the same or less than a local title agency that may not even employ an attorney.  At the Davis Basta Law Firm, you always get the benefit of an experienced real estate attorney being involved in your transaction. 

What is the promissory note?

A promissory note is the promise to pay back borrowed money or the evidence of a debt.  If you loan money to someone, even a close family member, it is important to secure repayment of your loan if possible.  At the very least, reduce any agreements to a writing. 

What is the mortgage?

The mortgage is evidence of security for the promissory note and will describe the property that is being used as security if the loan is not paid back.  The mortgage “follows the note” because if you do not pay back the note (loan), the mortgage will allow the lender to go after the security. 

I did not get the loan on the property or sign the promissory note, why do I have to sign the mortgage? 

If you are a spouse or owner in the real property being given for security on a note, the lender will also require your signature on the mortgage even if you are not taking out the loan.  This is so for a variety of reasons, one being that as a person with interest in the property, they want to be sure that you are aware that the property is being mortgaged. 

What is a title insurance policy? 

A title insurance policy insures the status of title in the name of the owner of the policy.  Although a forged instrument may not be discovered during the examination of the title, it would be covered by the title insurance policy.  Most lenders require their borrower to provide a policy to cover the amount of the mortgage.  We also recommend that each owner of the property also have an owner’s policy to protect themselves against any potential adverse claims against their title.   

What is the difference between underwriters of title insurance? 

We proudly offer title policies underwritten by Attorney’s Title Insurance Fund.  The rates are promulgated by the State so you pay no more for the title insurance policy by using the services of a real estate attorney who underwrites with The Fund than you would to go through another underwriter.  Trust your policy to The Fund’s members.  Perhaps you have already heard the ads.  Don’t go it alone.  Attorney’s Title Insurance Fund supports its real estate attorney members by providing valuable, relevant, and timely information, as well as innovative products and services that allow attorneys to conduct transactions electronically, easily, and efficiently.  Additionally, their strong technology base and educational support create an environment that enhances the attorney’s knowledge.  We believe this is why The Fund is the largest single title insurance underwriter and title information provider in the State of Florida.  We are proud to do business with them as a real estate attorney. 

What is a Deed in Lieu?

A deed-in-lieu of foreclosure is a process whereby the lender agrees to accept the deed (or title to the property) in lieu, or as an alternative to pursuing a legal action for foreclosure.  In today’s market, there are other legal issues surrounding this type of alternative that you should discuss with an attorney including the issue of a potential deficiency judgment. 

What is a Short Sale?

In a short sale situation, the property is sold for an amount that is less than the amount that was borrowed or is less than is currently owed on the promissory note.   Hence the word “short” sale.  The sales price is not enough money to satisfy the liens on the property, usually the lender(s).   There have been recent and important favorable changes in the law making this type of arrangement very appealing to the homeowner.   

If the bank approves a short sale, will I be responsible for any deficiency judgment?

We make sure if we are working with your broker/realtor or are working for you directly, that we discuss the potential for any deficiency with the Bank prior to the sale of the real property.  If you are unsure, you should contact your realtor, lender, or contact our office.

What is a deficiency judgment?

A deficiency judgment typically follows a legal action in foreclosure.  The lender sues the borrower for the difference between the amount originally loaned to the borrower and the amount of the security interest. 

Borrowers should be aware that even if you simply gave the keys to the lender and the lender didn't have to go through the foreclosure process to get the title to the home, the lender may still have legal right to obtain a judgment against you for the remaining balance on the loan. 

You may also be liable to the insurance company if your lender required PMI insurance and the insurance paid the lender to cover a deficiency. 

What is a Loan Modification/Forbearance Agreement?

Your lender may be willing to change or modify the terms of your loan.  This is often a good option for someone who was unable to make their payments or is struggling due to a temporary inability to pay due to a lay off or job change.  The lender may be willing to forego current payments by adding them to the end of the loan.   It is important to talk to your lender about these options.  People often ask our office if they qualify for a loan modification or forbearance plan, and the answer is generally “no, if you do not ask.” 

What is a Loan Assumption?

A buyer or another party is willing to assume the terms of your loan. 

What happens if the National Firearms Act is violated? 

We recommend that class 3 weapon owners do not rely on boilerplate forms or software designed to create trusts.  When the NFA is violated, the individuals who violate the act are subject to substantial fines, criminal charges, and forfeiture of ALL weapons, NOT JUST THOSE REGULATED.  

The gun trust prepared is a revocable living trust, which is a trust created during your lifetime, which you can revoke or amend whenever you wish. A living trust has a trustee(s) (who may be you) who has the responsibility of managing the property transferred to the trust. Upon your death, the trustee is typically directed to distribute the trust property to the beneficiaries, or to continue to hold it and manage it for the benefit of the beneficiaries.

A Successor Trustee is the person named in the Revocable Trust agreement who will assume control of the trust if the original trustee(s) die, or becomes unable or unwilling to act. There can be one or several back-up trustees to take over the Trust in the order you designate.

A Trustee is a fiduciary. As a fiduciary, the trustee stands in a position of confidence and trust with respect to the beneficiaries. Trustees must act in the best interests of the beneficiaries, and can be sued by the beneficiaries if they act improperly.

Some other questions frequently asked by individuals seeking a gun trust include:
 
Why do I need a gun trust?
 
The truth is, you don’t need a gun trust.  However, many of our clients have indicated that law enforcement agencies have been reluctant to give out the necessary certification to acquire a Class III item.  Creating a corporation is another method available, but requires an annual fee and does not provide the privacy that a trust provides.
 
Are there any possession issues that I need to be concerned about with a trust?
 
Yes.  Possession is a critical issue that must be addressed to make certain that those individuals you want to have access to the Class III item are not in danger of prosecution.  These are issues that must be addressed in the trust.  Safeguards like a safe or lockbox, where only those legally permitted to possess the Class III item have access, are precautions to be considered.
 
What is the NFA?
 
NFA stands for the National Firearms Act.  The Act is a federal statute which imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those firearms. 
 
What is ATF?
 
ATF stands for the Bureau of Alcohol, Tobacco, Firearms and Explosives.  ATF is the agency which enforces Federal statutes and regulations dealing with firearms and explosives.
 
Are there certain states that do not permit possession of Class III items?
 
Yes.  Fortunately, the State of Florida is not one of those states.  When we do receive calls from individuals from out of state, we always suggest that they contact an attorney in their state who is familiar with gun trusts.    

What happens to the Class III item upon the passing of the Grantor(s)?
 
The Class III item would typically go to the beneficiary, but a properly drafted trust will address what the successor trustee must do to be in compliance with the law, and also address what to do if the beneficiary is a minor.
 
This is a brief synopsis regarding a revocable living trust, but is not intended to be all inclusive, and you are encourage to become familiar with Florida Statute 736, that details the rights and responsibilities of a trustee under a trust.

What is a sole proprietorship? 

Many small businesses start out as sole proprietorships.  These businesses are owned by one person.  Sole proprietors own all the assets of the business and the profits generated.  They also assume responsibility for any of its liabilities or debts.  Legally, you are one in the same with the business.

What is a Partnership?

In a Partnership, two or more people share ownership of a single business, and like proprietorships, the law does not distinguish between the business and its owners.  We recommend that partners have a legal agreement indicating how decisions will be made, profits shared, disputes resolved, future admission of partners, buyouts, and what steps will be taken if dissolution of the partnership is necessary.  There are several different partnerships that can be considered: General Partnership, Limited Partnership and Partnership with limited liability, and Joint Venture.

What is a Corporation?

A corporation chartered by the state in which it is headquartered is considered by law to be a unique entity, separate and apart from those who own it.  A corporation can be taxed, sued, and can enter into contractual agreements. The owners of a corporation are its shareholders, and the shareholders elect a board of directors to oversee the major policies and decisions.  Another issue is the difference between an S corporation vs. a C corporation for tax purposes.  The corporation has a life of its own and does not dissolve when ownership changes hands. 

What is a Limited Liability Company (LLC)

The LLC is probably the most common form of business ownership today.  It is a hybrid business structure designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.  The owners are members, and the duration of the LLC is typically determined when the organization papers are filed.  The time limit can be continued by a vote of the members at the time of expiration.  LLCs must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets, continuity of life, centralization of management, and free transferability of ownership interests.