What homeoWners should KnoW about deeds and encumbrances

By Barbara M. Brown, Esquire, with the assistance of law firm intern Sam Hijazi,

Knowing about deeds when buying and selling real estate is essential. Transferring property ownership is a big deal, and as a homeowner, you want to make sure you transfer the title without any problems. There are several types of deeds, each with pros and cons. We want to address the most common questions.

1. What’s the difference between a quit claim deed and a warranty deed?

A warranty deed is a legally binding assurance given to a buyer by a seller. A warranty deed is preferred since it carries a guarantee from the seller that he/she holds clear title. With a quit claim deed, the seller does not have to guarantee anything, which is why a warranty deed is preferred in most cases.

2. Should I get a life estate deed or an enhanced life estate deed?

A life estate deed transfers the property to the beneficiaries automatically after death. A certified copy of a death certificate will need to be recorded. Getting a life estate deed will allow you to avoid the probate process and save on legal fees. There are drawbacks, including it is irrevocable, and if you decide to mortgage or sell the property, you aren’t the sole owner. With an enhanced life estate deed, you can revoke the deed as long as the grantor is alive. The grantor reserves all rights and powers to the property, including mortgaging and selling the property.

3. Why does my spouse need to sign the mortgage if he/she is not on title?

Under Florida’s Constitution, the spouse must sign the mortgage, even if he/she is not financially responsible for any payments. This is due to the vested interests a spouse might have. On the other hand, there are benefits to having the spouse on the deed, including avoiding the probate process and protection from creditors.

4. What are “Doc” stamps on the deed and the mortgage?

A doc (documentary) stamp is a tax imposed on documents that transfer or grant interests, such as deeds and mortgages. These taxes are collected by the closing agent and ultimately paid to the Florida Department of Revenue.

5. Is my homestead protected from judgment creditors?

Article X, Section 4 of the Florida Constitution protects Florida Homestead property from levy and execution by judgment creditors. Any property that is attached to the land is protected from creditors. This does not include personal property that is moveable, such as furniture.