Page 85 - Akerman | 2016 Guide to Doing Business in Florida

grantor. A special warranty deed is akin to a covenant deed in some other
jurisdictions. A quit claim deed generally does not contain any of the
traditional covenants or warranties of title, and is often granted to clear title
defects, in lieu of foreclosure, or in connection with the winding down of the
affairs of a dissolved entity. All deeds must be executed in front of two
subscribing witnesses and a notary public. Unlike some states, there is no per
se prohibition in Florida against insuring a quitclaim deed; however, insuring a
quit claim deed may require additional examination and approvals by the
respective title insurer.

(b) Bill of Sale. If personal property is being transferred with commercial real
property, then a bill of sale is customarily delivered. A bill of sale may be in the
form of a quitclaim bill of sale or may contain such representations and
warranties as the parties negotiate. For purposes of payment of documentary
stamp taxes, if the subject transaction includes both real property and
tangible personal property, then the purchase price may be allocated
between the real property, which is subject to the documentary stamp tax,
and the tangible personal property, which is not subject to the documentary
stamp tax. It is important to note that the Florida Department of Revenue has
rules for such apportionment. In addition, if the purchase price is allocated
between the real property and the tangible personal property, it is possible
that such allocation may trigger sales tax due on the personal property. There
are Florida Department of Revenue rules and Technical Assistance
Advisements to assist in such a determination.

(c) Mortgage. There is no statutory form of mortgage in Florida. The general
requirements for a mortgage under Florida law are the intent of the mortgagor
to mortgage the real property, consideration, an adequate description of the
real property, a statement of the mortgagor’s obligation, and delivery and
acceptance of the mortgagee. In Florida, a mortgage is a lien, not an interest
in real property. Therefore, witnesses are not an essential element of a
mortgage. A mortgage is perfected by the recording of the instrument in the
public records of the county in which the mortgaged real property is located.
The recording of a mortgage provides constructive notice to all creditors and
bona fide purchasers. Acknowledgement of a mortgage is required to comply
with the recording statute. With proper language, a mortgage may also serve
as a security agreement, a fixture filing, and as an assignment of leases and
rents. The Florida documentary stamp tax is due on all notes or other
obligations to pay debt secured by mortgages recorded in the State of Florida
at the rate of $.35 cents on each $100.00 or fraction thereof of the
indebtedness or obligation evidenced thereby. There is no limit on the
documentary stamp tax due for mortgages or liens filed or recorded in Florida.
Certain mortgages, characterized by statute as balloon mortgages, i.e., if the
final payment of principal due and payable on maturity is greater than twice
the amount of regular or periodic payment of the mortgage, that do not fall
under a statutory exemption, must contain a statutory disclosure of their
status as a balloon mortgage.

(d) Financing. In Florida, common law governs most elements of commercial real
estate financing transactions. Most complex real estate financing transactions
are initially documented by a loan commitment followed by a formal loan

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