Bulletin: FL2023003

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Bulletin: FL2023003

Bulletin Document
V 8
Date: June 28, 2023
To: All Florida Issuing Offices
RE: LEGISLATIVE UPDATE - Selected Florida 2023 Legislation

Dear Associates:

The following is a summary of legislation passed during the 2023 Regular Session that may impact the title industry.

Property Fraud

HB 1419/Ch 2023- 238 created several new statues which take effect July 1, 2023, (except as noted) and amends existing statues as summarized below:

  • F.S. §28.2225 establishes an anti-fraud pilot program in Lee County for a period of two years. The statute allows the clerk to require any individual presenting a deed for recording, whether in person or through an electronic recording service, to produce government- issued photo identification. The clerk may refuse to record a deed or other instrument when the person presenting it refuses to produce the required personal identification. The clerk must maintain information relating to documents recorded and at the expiration of the two-year pilot program, the data obtained will be reviewed to determine if it helped to reduce real estate fraud.
  • FS § 28.47 requires clerks of the court to create and maintain a free notification service. People who register for the service will be informed that a transaction associated with the registrant’s monitored identity has been recorded in the public records of the county. (This section becomes effective July 1, 2024)
  • FS § 65.091 provides for a cause of action to allow property owners to quiet title against anyone who attempts to fraudulently convey their land. The plaintiff is entitled to summary procedure and the court shall advance the case on the calendar.
  • FS § 689.025 was amended to provide a statutory form of quitclaim deed. The statute specifically states the deed may include the tax parcel identification number but that the number is not a part of the legal description and may not be used as a substitute for the legal description required by the statute. The statute is a companion to FS §689.02 which provides for a statutory form of warranty deed.
  • FS § 695.26 was amended to require that the post office address of all witnesses be legibly printed, typewritten, or stamped in any recorded instrument which serves to convey, assign, encumber or otherwise dispose of the property. This adds to the existing requirement that the name of the witness be so included. (This section is effective January 1, 2024)

Residential Loan Alternative Agreements

SB 770/Ch 2023 -117 takes effect July 1, 2023, and creates FS §475.279. This new law is a response to the proliferation of recorded listing agreements used by MV Realty which purport to create 40-year liens and require 3% payoffs to release. The statute defines “Residential Loan Alternative Agreements” (“Alternative Agreements”) as a written legal instrument between a person and a seller or owner of residential real property that:

  • Grants an exclusive right to a person to act as a broker;
  • Has an effective duration, inclusive of renewals, of more than two years; and
  • Requires the person to pay monetary compensation to the seller or owner.

The bill prohibits Alternative Agreements from authorizing a person to place a lien or otherwise encumber any residential real property. Nor can an Alternative Agreement constitute a lien, an encumbrance, or a security interest in the residential real property and may not be enforced by a lien or constructive trust in the residential real property or upon the proceeds of sale. The Alternative Agreements may not be assigned and become void if the listing services do not begin within 90 days after the execution of the agreement by both parties. A listing agreement that does not meet these requirements is unenforceable in law or equity and may not be recorded by the clerk of the circuit court. Additionally, the bill deems a violation of this section to be an unfair or deceptive trade practice within the meaning of FDUTPA.

The legislative ‘fix’ provided for in the statute would appear to bring some relief to consumers going forward as any agreement entered into after the effective date of the statute would be subject to the terms of the statute. However, it is questionable whether the terms of the statute are effective as to pre-existing agreements already of record. Memorandums/agreements found in title searches recorded prior to July 1, 2023, may not be ignored and a release must be obtained prior to issuing a policy without exception for a recorded agreement.

Estoppel Certificates

SB 708/Ch 2023- 135 takes effect October 1, 2023, and amends FS § 701.04 pertaining to estoppel letters as follows:

  • The mortgagee or its servicing agent must provide an estoppel letter within 10 days of receiving a written request. The existing statute allows for 14 days. If the written request is made by a person other than the mortgagor, the request must now include a copy of the instrument showing such person’s title in the property or other lawful authorization and the mortgagee or servicer must notify the mortgagor of the request.
  • The estoppel letter must include the unpaid balance of the loan as of the date specified in the estoppel letter, including an itemization of the principal, interest and other charges comprising the unpaid balance and the interest accruing on a per-day basis.
  • Unless there is a Lis Pendens as part of a foreclosure action or a suggestion of bankruptcy for the mortgagor or title holder, the mortgagee or its servicer may not qualify, condition, or disclaim reliance on the letter and any attempt to do so is void and unenforceable. This does not prevent a corrected letter from being sent but it must be received by 3:00 P.M. at least one (1) business day before a payment is issued in reliance on the previous estoppel letter for the revised letter to supersede the prior letter. The lender may still collect any sums not reflected in a timely received estoppel letter from the mortgagor, but the mortgagee is required to honor the letter in terms of releasing the property from the mortgage.
  • If a payment is received at the location and in a manner specified in the estoppel letter, the mortgagee or its servicer must accept the funds received and apply such payment to the unpaid balance.
  • Within 60 days after full payment of the unpaid balance on a loan secured by a mortgage or paid pursuant to an estoppel letter, the mortgagee or mortgage servicing agent shall execute an instrument in writing acknowledging release of the mortgage and have it recorded in the official records of the county in which the property is located. The recorded release does not relieve the mortgagor from any personal liability for money still owed.

Department of Financial Services Title Agent Licensing Revisions

HB 487/Chapter 2023- 144 takes effect July 1, 2023, and amends various provisions of FS § 626 pertaining to agent/agency licensing and appointment. The Act adds additional matters the department may review in determining whether to issue, renew, suspend, or revoke the license or appointment of a title agent or title agency, which includes:

  • Having been found guilty of or having pleaded guilty or nolo contendere to a misdemeanor directly related to the financial services business.
  • Cancellation of the applicant's, licensee's, or appointee's resident license in a state other than Florida.
  • Misappropriation, conversion, or improper withholding of funds to which such person is not legally entitled, and which are received in a fiduciary capacity and held as part of an escrow agreement or real estate sales contract, or as provided on a settlement statement in a real estate transaction.
  • Revocation or cancellation of a licensee's resident license in a jurisdiction other than this state.
  • Having been the subject of, or having had a license, permit, appointment, registration, or other authority to conduct business subject to, any decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, final agency action, or administrative order by any court of competent jurisdiction, administrative law proceeding, state agency, federal agency, national securities, commodities, or option exchange, or national securities, commodities, or option association involving a violation of any federal or state securities or commodities law or any rule or regulation adopted thereunder, or a violation of any rule or regulation of any national securities, commodities, or options exchange or national securities, commodities, or options association.

Construction Liens

HB 331/Chapter 2023- 226 takes effect October 1, 2023, and revises the Mechanics Lien Statute under FS §713 to modify the current “stop/start process” used when construction has begun, and priority of a mortgage must be established.

The 2023 amendment changes the existing requirements for an owner to record a Notice of Termination (“NOT”). Under amended subsection 713.132(3), the NOT may be filed by the owner at any time after all lienors have been paid in full. It is no longer required that construction be ceased/completed. The change allows the owner to record a notice of termination at any time when all lienors have been paid in full or pro rata in accordance with s. 713.06 and facilitates parties obtaining new financing prior to completion of construction.

713.132(5) was also amended and recognizes that lienors not-in-privity with the owner have up to 45 days after starting work to serve a notice to owner, notwithstanding the filing of the NOT prior to the expiration of the 45-day filing period. While the priority of the lien of these late filing lienors is not cut off by the NOT in this circumstance, the statute requires the owner to serve the NOT on these late filing lienors and the termination of the Notice of Commencement becomes effective against these parties 30 days after service of the NOT upon them.

Sunbiz Bill

SB 948/Chapter 2023- 53 the “Sunbiz Bill” takes effect July 1, 2023. The Act allows, but does not require, the Department of State to implement a password-protected system as follows: (i) for any record electronically received and require filers to produce supplemental materials to use such system including, but not limited to an original signature of the filer and verification of credentials; and (ii) that allows entities organized under certain Florida Statutes (such as corporations and limited liability companies) to identify authorized account holders for the purpose of electronically filing records.

Limitations on land ownership by principals from certain Foreign Countries

SB 264/Ch 2023- 33 creates FS § 692.201-205 and takes effect July 1, 2023. The Act establishes new restrictions which generally forbid ownership of land by parties affiliated with a Foreign Country of Concern (FCC) that involve agricultural lands and lands located within a ten-mile radius of a military installation or critical infrastructure. Guidance and information on this Statute may be found in STG 2023 Bulletin FL2023-002.

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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.


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