Summarized – 2022’s Real Estate Experts Market Predictions

On the Rise.  In 2022, Housing prices, rents, mortgage rates, home sales, and income / wages / salary / paychecks are all expected to rise.  2022 will hit the 2nd highest sales level in 15 years, defeated only by 2021.

Inventory will increase, but not enough.  Inventory will rise only 0.30%.   Homes are expected to continue to sell quickly, meaning buyers still need to make quick decisions to win offers.

Where to find sellers who can sell.  Sellers most poised to take advantage of this hot seller’s market, are sellers who do not need to buy a replacement house immediately; for example, heirs/beneficiaries of real estate, second homes, vacation homes. 

Home Price Appreciation continues but slows.  Home appreciation relates to house or investment property increasing in value over a period of time.  In 2021, Florida homes appreciated by 14.00%. In 2022, home values will continue to appreciate but slowly. Predictions from Fannie Mae estimate appreciation (+7%), NAR estimates appreciation (+2.2%).

Mortgage Rates will Rise slightly due to inflation The Consumer Price Index (CPI) measures changes in price of goods and services.  Inflation is when prices for the same goods and services begin to increase.  So when inflation rises, so does interest rates. Why?  Because the cost of money today for the loan you are borrowing is going to be worth less to the bank when it is repaid sometime in the future.  In 2022, rates are projected to rise to 3.60 – 3.70% but not to worry, because historically speaking when looking at the last 50 years, rates will still be considered very very low.  To get an idea, last year’s average monthly rate from January through December for a 30-year-fixed-rate-mortgage looked like: (2.74 -> 2.81 -> 3.08 -> 3.06 -> 2.96 -> 2.98 -> 2.87 -> 2.84 -> 2.90 -> 3.07 -> 3.14 -> 3.20%).

Why Buy Now?  (1) Sales prices have increased year-after-year sine 2012 (i.e. for a decade!) and will continue to increase but moderately (2.9%).   That may not sound like a lot but on a 500,000 house that’s about $15K.  (2)  Declining unemployment and increased wages means more home buyers entering the market; (3) As people become more social and comfortable, they will return to buying in condos and cities; (4) 45 Million millennial (ages 26-35) first-time-home-buyers are entering the housing market. (5) Because of the competitive labor market, smart recruiters will allow (or tolerate) remote working.  Remote workers who previously could not afford new housing, can now expand their home search options practically limitlessly now that commuting is not a factor. (6) International buyers are allowed to travel to the U.S. if they:

(7) Federal moratorium on residential evictions was lifted on July 2021; and (8) Federal moratorium on residential foreclosures ended September 2021.  The foreclosure process will have a delayed kick-off since banks first need to send out a 30 day “Notice of Acceleration” letter, and then upon failure to pay, the bank can sue to foreclose.  Evictions and foreclosures will increase supply.  Foreclosures are also a matter of public record, so bargain hunters will be jockeying to buy.

Factors hurting housing sales(1) Affordability to buy remain a problem. (2) Not enough homes.  Home supply is 4 Million short from buyer demands. accord., Freddie Mac.  (3) Many homebuilders went out of business after the 2008 housing crash, leading to a historic housing shortage; (4) Investors are jockeying to snap up homes as the tight supply keeps pushing prices higher.  (5) 28% of homeowners choose not to sell because they can’t find a new home to buy.

Rentals and investments.  Rental vacancies are at historic lows (5.7%-6.8%). Rents grew 30% in 2020.  Rental prices will continue to increase because, home prices continue to rise and those who cannot afford to buy will continue to rent.  Alternative options are move back in with family.  Rising rents will continue to entice investors to buy income producing property.  Investment sales will increase 3.6% in Dade and Broward in 2022.

Sources for this story include:,,, and

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author Randy Gilbert, J.D. is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

Real Estate Closings Afterhours And on Weekends – Real Time Payments (RTP®)

Consumer Expectations.   It starts with the consumer experience.  We all want things to happen as quickly, easily, and securely as humanly possible.  Think back 10 years ago, and you were perfectly happy receiving a package within five (5) business days.  Nowadays, we have amazon prime promising same or next day delivery coupled with Uber Eats, Domino’s, Lyft, UPS and others’ real time tracking.  So, What do we want?  “EVERYTHING!”  And When do we want it?  “NOW!”  With sending and receiving payment it is no different.  Real Time Payments (RTP®) focus on curing cash lag.

What are Real Time Payments (RTP®)?  Global financial banking is robust, large, fast, and effective so how are RTPs additive?  Imagine no blackout times to make or receive a payment.  RTPs are a new way to transfer funds instantaneously anywhere, anytime, including weekends, afterhours, and legal holidays.  RTPs are the first new banking clearinghouse in the U.S. since the 1970s (i.e. over 40 years).  RTPs compliment other types of electronic payments such as ACH, card, and mobile but are distinguishable in that: (1) the payment settles instantly; (2) are final and irrevocable and cannot be clawed back or recovered after sending; and (3) can be sent 24 hours / 7 days a week / 365 days a year, even when other payment options are unavailable.

Availability of RTPs Locally and Internationally?  Despite their mystique in the U.S., RTPs are nothing new.  RTPs have existed in Europe for over fifteen (15) years.  Asia’s RTP market boomed through the pandemic.  Today, there are 56 countries utilizing RTPs with: India conducting over twenty five (25) Billion; China sixteen (16) Billion; and the UK three (3) Billion in annual RTP transactions.  As e-commerce, the global marketplace, and the gig economy (i.e. freelance work or short term labor contracts) grow, demands for RTP is forecast to escalate everywhere.  Banks have made RTPs a top priority for implementation.

Benefits of RTPs?  RTP is designed for both sending and receiving funds to both companies and individuals.  Because of immediate 24/7/365 availability and instantaneous settlement of funds, RTPS are perfect for: Emergency or time sensitive payments (e.g. real estate closings, stopping per diem interest from accruing); Customer billing; Paying vendors or suppliers; E-commerce for online payments, Employees for payroll; and anyone else who expects instant payment for labor, services, or goods delivered.  Parties to the transaction will be able to see where the money is every stage of the way.  Within fifteen (15) seconds, payment confirmation will be received showing whether the transmission was successful or failed. Additionally, for added security, prior to setting up an RTP account, the banks themselves will require some identity proofing of the account holder.

Limitations on RTPs and Workarounds.  $100,000.00 is the current maximum that can be sent at one time.  In some rural areas that may be useful for closing a real estate transaction, but not so much in South Florida.  The work around is that multiple and successive RTPs can be sent.  In as much as the cap can easily be circumvented, there are talks about raising the ceiling to $1 Million for a single transfer.  In the meantime, RTPs can be readily used in real estate transactions by: allowing buyers to make Earnest Money Deposits, or by having title and escrow companies pay disbursements that fall below the $100,000.00 cap.  Moreover, just like wires, there will also be a banking charge for RTPs.  While not a rule, consumers who send RTPs tend not to be charged, with the cost of the RFP being born by the party requesting payment.

What platform is used for RTPs?  RTP messages and data use the ISO 20022 format (first introduced in 2004).  Banks and financial institutions globally are set to transition their payment systems from using SWIFT messages to the highly structured and data-rich ISO 20022 standard.  ISO is the language and model for relaying electronic messages regarding payments between financial institutions.  In techy talk, it gives the financial industry a common platform for sending payments messages and exchanging payments data, using a central dictionary, a standard modelling methodology, and a series of Extensible Markup Language (XML) and Abstract Syntax Notation (ASN.1 ) protocols.  The payment itself carries reference details and unique identifiers for any inquires that arise.

Requests For Payment (RFP) – i.e. sending an electronic bill or invoice.  Billers can send RFPs (requests for payment) to customers or debtors.  Customers or debtors can respond to RFPs from billers (e.g. your bill for $100.00 is due).  In other parts of the world, RFPs are called Requests To Pay.  Because the ISO 20022 platform can retain a substantial amount of data, RFPs can even attach actual documents like the bills or invoices.   The payment received in response to an RFP will include the reference info from the original RFP.

What Additional Information Can Be Sent in RTPs?  RTPs enhance the free flow of information through real time initiation, confirmation, and messaging at every step.  There are three (3) types of non-financial information that can be used.  The Request for Information (RFI) allows the payee to ask for more details about the payment (e.g. I received your payment, What is it for?).  A “Remittance Advice,” can be attached to a payment which can include up to 4000 characters (about 650 words) for invoice numbers and payment details (e.g. like the memo section when sending a wire or check).  “Payment Acknowledgment” from the payee acknowledging their receipt of funds (e.g. Thanks for the payment, it has been posted to your account!).

Preparing your business for RTPs.  On the banking side you will want to update your system to accept the new BAI codes for real time payments.  BAI stands for Bank Administration Institute, and is a file format used by banks to transfer financial data.  These codes have been published to ensure consistency amongst all US banks handling RTPs.  Review and toggle your alert and notification settings for RTPs.  Since RTPs are available 24/7 figure out how you will be responding to payments received after hours, nights, and weekend.  Clarify who has the authority to initiate and then approve RTPs because once the payment is sent it is final and irrevocable.

RTP vs ACH Unlike an ACH debit, with an RTP the biller does not initiate the pulling of funds out of a customer’s account; so there is no risk of returns or other types of rejections once payment is sent by the customer.  In other words, if FPL did an ACH debit it would be up to FPL to prove that the payment was duly authorized by the payor.  Additionally, ACHs are a domestic form of payment in the U.S. and cannot be done internationally.

Can RTPs Enhance Your Real Estate Closings.  Not currently but hopefully soon. There are three (3) ways RTPs could expedite the closing process.  Using RTPs: Buyers could pay their earnest money deposit to the title company; Buyers or Lenders could send the title company funds needed to close; and title companies could make all the necessary disbursements to the appropriate payees in real time. Unfortunately, despite RTPs availability, until banking policies change RTPs are just out-of-reach for the real estate market. According to Bank of America, their Real Time Payments platform unavailable in their Small Business Banking space (i.e. businesses with annual revenues under $10 Million, which pretty much rules out just about every title company). Moreover, according to BOA, RTPs are also not currently available for third party funds accounts such as an IOLTA or Trust account, which are the escrow accounts title companies use to fund.

Conclusion.  With digital closings coming onboard to simplify and expedite real estate transactions, there is a concomitant need for digital funds to pay for it all.  Everyone wants to be able to pay and do things simpler, easier, and safer.  The way consumers are paying have changed and RTPs are the future.

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author Randy Gilbert, J.D. is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

Real Estate’s 2021 Legislative Changes and Updates

Fla. Stat. §119.07 – Inspecting Public Records   Prohibits an agency receiving a public record request from responding to the request by filing an action for declaratory relief against the requester to determine whether that record meets the definition of a public record or if it is confidential or exempt.

Fla. Stat. §125.69 – Code Inspectors – No Investigating Anonymous Complaints.  Code inspector may not investigate potential code or ordinance violations based on anonymous complaints. Complainant must provide their name and address.  Exception, if code inspector has reason to believe violation presents imminent threat to public health, safety, or welfare or imminent destruction of habitat or sensitive resources.

Fla. Stat. §212.031 – Rent Tax On Real Estate Reduced.  Reduces tax rate on rental of commercial real property from 5.5% to 2.0% beginning the second month after the Unemployment Compensation Trust Fund exceeds a balance of $4.07 billion.

Fla. Stat. §212.0596 – Sales Tax on Out-Of-State Retailers.  Out-of-state retailers and marketplace providers with no physical presence in Florida must collect Florida’s sales tax on sales of taxable items delivered to purchasers in Florida if their remote sales exceeded $100,000. Authorizes additional lead-acid battery fee, and waste tire fee.

Fla. Stat. §489.147 – Contractor Prohibited Property Insurance Practices.  Contractors cannot: encourage, instruct, induce, solicit, residential owner to contact a contractor or public adjuster to make a roof insurance claim; offer to waive any insurance deductible or give a thing of value in exchange for being allowed to make a roof insurance claim; accept kickbacks for property insurance claims; interpret insurance policies, advise insureds about their coverage or duties, or adjust property insurance claims; provide insureds with contracts without a good faith estimate of the itemized and detailed cost of services and materials for repairs undertaken.

Fla. Stat. §501.059 – Private Cause Of Action for Telephone Solicitations.  All sales telephone calls, text messages, direct-to-voicemail transmissions, recorded message, using an automated machine to dial must have recipients prior express written consent. Creates private cause of action for $500 or actual damages if more, which may be trebled (3x) by the court.

Fla. Stat. §501.616 – Telephone – Blocking Caller ID, Creating False Phone Number.  No salesperson may prevent transmission of their name or telephone number, or use technology to display a different caller identification number.

Fla. Stat. §501.616 – Telephone Solicitations time frames and limitation on amount of calls. No salesperson may call or send a recorded message outside 8AM-8PM, nor more than three (3) times over 24 hours on the same subject matter.  

Fla. Stat. §626.854(15) – Contractor Prohibition as Public Adjuster or Recommending Public Adjusters.   Contractors and their subs may not advertise, solicit, offer to handle, handle, or perform public adjuster services unless licensed as a public adjuster.  They can recommend a consumer contact their own insurance company.

Fla. Stat. §626.854(22) – Public Adjuster Prohibitions Relating To Roofs.  Offering residential owner rebates, anything of value in exchange for being allowed to: (a) conduct a roof inspection; or (b) Make a roof insurance claim.  Offering or accepting any compensation, inducement, or reward for the referral of roof insurance claims.

Fla. Stat. §715.12 – Construction Contract Prompt Payment Law. Increases late payment interest on construction contracts to the rate specified in §55.03plus twelve percent (12.00%) per annum.

Fla. Stat. §718.111 Condo – $150.00 Transfer Fee.  Increases fee condo may charge for transfer of a unit from $100.00 to $150.00.

Fla. Stat. §718.111 Condo – Renter Right To Inspect.   Allows renters to inspect and copy Declaration of Condo, bylaws, and rules.

Fla. Stat. §718.113 Condo – Unit Owners Right to install Charging Stations.   Permits unit owners with their own designated parking spot to install charging stations for electric or a natural gas fuel vehicle.

Fla. Stat. §718.121 – Condos, Form Of Notice, Prerequisites To Claiming Attorney Fees, Increasing Time To Pay Before Liening. Condos may send invoices and statements via email but only if condo unit owner affirmatively opts in.  Unit owners are entitled to a “Notice of Late Assessment” (on a statutorily prescribed form) stating the amount owed to the Condo before attorney fees may be charged attorney fees.  The “Notice of Late Assessment” must specify the amount owed and allow the owner to pay past due assessments without paying additional attorney fees.  With regards to Condos sending a “NOTICE OF INTENT TO RECORD A CLAIM OF LIEN,” the period of time a unit owner has to pay a monetary obligation after receiving the Condo’s notice is increased from 30 days to 45 days (this now conforms to the 45-day payment period afforded parcel owners in HOAs).

Fla. Stat. §718.202 Condo Developer – Limitation On Use Of Buyer’s Escrowed Funds.   Condo developer may spend escrowed funds on actual costs of construction and development; not marketing, loan, professional, or insurance costs.

Fla. Stat. §720.303 HOA – Guest List Confidentiality.  Information an HOA obtains in a gated community in connection with guests’ visits are not accessible to members or owners.

Fla. Stat. §720.306 HOA – Restrictions On Rentals.  HOA may amend HOA docs to prohibit or regulate rentals of 6 months or less.  May prohibit more than 3 rentals per year.  Inapplicability when 15 or fewer parcels.

Fla. Stat. §732.507 – Effect of Divorce on a Will.  Provision in a will affecting a decedent’s spouse are void upon divorce.  Exception, if the will is executed after the divorce, contrary intention in the will is specifically stated, or the divorce judgment provides otherwise.

Fla. Stat. §768.38 Liability Protections for COVID-19-related Claims.  Makes claims against individuals, businesses, educational institutions, governments and religious institutions very difficult. Civil actions based on COVID-19 must meet the following requirements: (a) The complaint must be pled with particularity; (b) be accompanied by a Florida physician’s affidavit attesting that the plaintiff’s COVID-19 injuries occurred as a result of the defendant’s acts or omissions; (c) generally be commenced within 1 year after the cause of action accrued; (d) Court must then conduct a hearing to determine compliance with the foregoing or dismiss the action without prejudice; (e) Court must also determine whether the defendant made a good faith effort to substantially comply with authoritative or controlling government issued health standards.  If the court determines defendant made a good faith effort, the defendant is immune from civil liability.  If the court determines the defendant did not make such a good faith effort, the plaintiff may continue with their suit but must prove by clear and convincing evidence that the defendant acted with gross negligence.  Different standard applies to health care providers.

Fla. Stat. §823.14 – Florida Right to Farm Act. Limits nuisance claims (e.g. noise, smoke, odors, dust, fumes, particle emissions, or vibration) against farm operations to real estate owners within ½ mile from where nuisance is emanating.  Also limits damages which may be sought.

Fla. Stat. §934.50 – Prohibitions on drone videoing and exceptions.  Without written consent, no person state agency, or a political subdivision may use a drone to record privately owned real property or of the owner, tenant, occupant, invitee, or licensee of such property with the intent to conduct surveillance in violation of such person’s reasonable expectation of privacy. Creates a private cause of action against violators including attorney fees, multipliers, punitive damages, and injunctive relief.

Law enforcement agencies (including code enforcement) may not use drones to gather evidence or other information.  Exceptions include: (a) counter high risk of terrorist attack; (b) search warrant obtained authorizing use of drone; (c) swift action is needed to prevent imminent danger to life or serious damage to property; search for a missing person; prevent imminent: escape of a suspect or destruction of evidence; (d) aerial views of crowds of 50 people or more; (e) assist with traffic management but not to issue traffic citations; (f) collect evidence at a crime or traffic crash scene; (g) Assess  flood, wildlife, natural disaster damage during state of emergency, vegetation or wildlife management on public land or water; (h) fire department personnel to perform tasks within their certification; (i) person engaged in a business or profession licensed by the state, or by an agent, employee, or contractor thereof, if the drone is used only to perform reasonable tasks within the scope of practice or activities permitted under such person’s license; (j) property appraisers for assessing ad valorem taxes; (k) for electric, water, or natural gas utilities; (l) aerial mapping; (m) deliver cargo; (n) capture images necessary to safely operate  or navigate the drone; (o) communication service providers; (p) Fish and Wildlife to eradicate invasive exotic plants or animals on public lands, and suppressing wildfires.

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author Randy Gilbert, J.D. is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

Buying Property During Hurricane Season

We know major storms come, so how should realtors and practitioners in disaster prone areas prepare to minimize disruptions in their transactions? According to the National Hurricane Center, Florida’s hurricane season runs from June 1st to November 30th. Facebook also likes to remind me with pop-ups, that for the past 4 years during the exact same week, my family and I have had to prepare for a major storm. Suffice it to say, hurricanes are here to stay.

Property Insurance considerations. As a precondition to loaning money to buy property lenders generally require borrowers to purchase a property insurance policy with 100% Replacement Cost Value (RCV). Watch out because insurers are supposed to offer RCV policies with a “Law and Ordinance” endorsement which: (1) do not include costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris in the aftermath of a loss; and (2) does include such costs. However, if the insurer does not obtain the policyholder’s written rejection of both coverage options (1) and (2), “any policy covering the dwelling is deemed to include the law and ordinance coverage limited to 25 percent of the dwelling limit.” See, Fla. Stat. §627.7011(1)(a)-(b).

Claims for: Hurricane Michael (10/2018) averaged $57,754, Hurricane Florence (09/2018) $47,138, and Hurricane Harvey (08/2017) $116,823. Hurricane deductibles can be 2%, 5% or 10% of an insurance policy. See, Fla. Stat. §627.701(3)(a). Look for an insurance company that gives an accurate RCV, without over-insuring the property. It’s counterintuitive but, more insurance could mean less coverage for repairs. Consider this scenario, a property costs $1M to purchase, but the insurance agent offers coverage at $1.5M with a 2% deductible. The agent then explains that it will cost more to rebuild (regardless of your purchase price) and that is why the estimate is for $1.5M. First, when buying property, your purchase price included the land and maybe a pool – which generally isn’t going anywhere absent complete Armageddon. So when your agent calculates an RCV, speak to them about how they came up with their RCV estimation. Second think about if you had $60K in damages, the deductible on a $1M Property with a 2% deductible would only be $20K; but if the property were over-insured at $1.5M that deductible would kick up to $30K before any insurance dollars were paid out, meaning less money for the insured. So more insurance can be counter-productive.

Flood Insurance considerations. Flood Insurance is separate from property insuranceeven if hurricane winds and rain caused the flood to occur. The term “flood” includes, “The unusual and rapid accumulation or runoff of surface waters from any source.” Properties in high-risk flood areas with mortgages from federally regulated or insured lenders must have flood insurance (and there is no 30 day waiting period). In moderate/low risk flood areas, lenders may require flood insurance. But if there is no lender at all (e.g. cash buyer) or the lender is a Non-FDIC insured lender (e.g. private) and flood insurance is requested, then prepare to wait because there is a 30 day waiting period imposed by the NFIP (National Flood Insurance Program). As a work around, a buyer can purchase private flood insurance company (i.e. not NFIP backed) or have the seller transfer their existing flood insurance to the buyer. If you don’t have coverage and a storm hits, you may not get federal assistance through FEMA unless the event is declared a federal emergency and even then, post-disaster grants averaged less than $10,000.

Be diligent, when a storm is imminent insurers impose a binding moratorium and will not write new insurance policies, making it impossible to get a loan. Therefore, during storm season it is advisable to have the insurance agent “bind” coverage as soon as possible but postpone the effective date the insurance policy goes into effect until the closing date.

Lender/Mortgage Considerations. Lenders and insurers may elect to re-inspect or re-appraise property for storm damage and can charge their borrowers to re-value the property (i.e. the collateral), and cause delays. Further, if the new cost is bundled into the loan (as opposed to being paid outside of closing), then the Loan Estimate would need to change triggering a new 3 day waiting period under TRID. Moreover, interest rate locks may expire during a storm and cost more money to extend. Admirably, we know some awesome mortgage brokers have chosen to eat these cost for their borrowers.

As-IS Contractual Considerations. While the “As-Is Residential Contract For Sale And Purchase” may have a time-is-of-the-essence clause it specifically addresses casualties, losses, and force majeures in varying ways.

In the event of a disruption due to a force majeure, Section 18G allows for all time periods (not just the closing date) to be “extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract.” It may surprise you to learn that the term “force majeure” broadly includes any extreme weather, act of God, or unusual transportation delays which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome. Could a force majeure include an intervening cancelled flight, a death, fed-ex’s failure to transport required documents? If a delay due to a force majeure arises anytime during the course of a contract (not just on the deadline) the parties should promptly provide the other party with a description of the delay, what was done to lessen the delay, the time adjustments needed.  But extensions are not indefinite. Force Majeures that push the closing date more than 30 days allow either party to cancel the Contract without penalty.

18.G. FORCE MAJEURE: Buyer or Seller shall not be required to perform any obligation under this Contract or be liable to each other for damages so long as performance or non-performance of the obligation, or the availability of services, insurance or required approvals essential to Closing, is disrupted, delayed, caused or prevented by Force Majeure. “Force Majeure” means: hurricanes, floods, extreme weather, earthquakes, fire, or other acts of God, unusual transportation delays, or wars, insurrections, or acts of terrorism, which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome. All time periods, including Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract, provided, however, if such Force Majeure continues to prevent performance under this Contract more than 30 days beyond Closing Date, then either party may terminate this Contract by delivering written notice to the other and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract.”

Typically a due diligence period is around 7 to 15 days; however, Section 10G of the As-IS addresses Flood Insurance by providing 20 days (unless changed) to cancel the contract if the buyer discovers that for insurance purposes the property is “below minimum flood elevation or is ineligible for flood insurance coverage.”

(d) FLOOD ZONE; ELEVATION CERTIFICATION: Buyer is advised to verify by elevation certificate which flood zone the Property is in, whether flood insurance is required by Buyer’s lender, and what restrictions apply to improving the Property and rebuilding in the event of casualty. If Property is in a “Special Flood Hazard Area” or “Coastal Barrier Resources Act” designated area or otherwise protected area identified by the U.S. Fish and Wildlife Service under the Coastal Barrier Resources Act and the lowest floor elevation for the building(s) and/or flood insurance rating purposes is below minimum flood elevation or is ineligible for flood insurance coverage through the National Flood Insurance Program or private flood insurance as defined in 42 U.S.C. §4012a, Buyer may terminate this Contract by delivering written notice to Seller within _____ (if left blank, then 20) days after Effective Date, and Buyer shall be refunded the Deposit thereby releasing Buyer and Seller from all further obligations under this Contract, failing which Buyer accepts existing elevation of buildings and flood zone designation of Property. The National Flood Insurance Program may assess additional fees or adjust premiums for pre-Flood Insurance Rate Map (pre-FIRM) non-primary structures (residential structures in which the insured or spouse does not reside for at least 50% of the year) and an elevation certificate may be required for actuarial rating.”

Maintaining the property and Casualties are addressed in Section 11 and Section 18M of the As-IS. Sellers are generally required to maintain the property, pool, and landscaping excepting ordinary wear and tear. But in the event of a “Casualty Loss” including from a severe storm or fire which occurs prior to closing, the Seller could be liable for repair costs up to 1.5% of the Purchase Price. If the costs exceed 1.5% then the Buyer can cancel without penalty or take the 1.5% and close as-is.

11. PROPERTY MAINTENANCE: Except for ordinary wear and tear and Casualty Loss, Seller shall maintain the Property, including, but not limited to, lawn, shrubbery, and pool, in the condition existing as of Effective Date (“AS IS Maintenance Requirement”).”

18.M. RISK OF LOSS: If, after Effective Date, but before Closing, Property is damaged by fire or other casualty (“Casualty Loss”) and cost of restoration (which shall include cost of pruning or removing damaged trees) does not exceed 1.5% of Purchase Price, cost of restoration shall be an obligation of Seller and Closing shall proceed pursuant to terms of this Contract. If restoration is not completed as of Closing, a sum equal to 125% of estimated cost to complete restoration (not to exceed 1.5% of Purchase Price) will be escrowed at Closing. If actual cost of restoration exceeds escrowed amount, Seller shall pay such actual costs (but, not in excess of 1.5% of Purchase Price). Any unused portion of escrowed amount shall be returned to Seller. If cost of restoration exceeds 1.5% of Purchase Price, Buyer shall elect to either take Property “as is” together with the 1.5%, or receive a refund of the Deposit thereby releasing Buyer and Seller from all further obligations under this Contract. Seller’s sole obligation with respect to tree damage by casualty or other natural occurrence shall be cost of pruning or removal.”

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author Randy Gilbert, J.D. is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

Get Your $#!T Out of My House! – Understanding Bailments

In real estate, buyers commonly ask if they can place their stuff in the home before they even bought the home.  Conversely, sellers commonly ask if they can keep their personal property in the home for a limited time after the sale is completed.  This article addresses: (1) What is the relationship created when someone agrees to hold someone else’s personal property?  (2) What precautions could be taken prior to storing someone else’s property?

Scenario #1, Seller tells Buyer, “I cannot close on time unless you allow me extra time to move my personal property out.” Buyer still agrees to buy the house, but graciously gives Seller seven (7) extra days to move Seller’s stuff out.  Once Buyer owns the house, who is responsible for Seller’s stuff and what if Seller never removes it?

Scenario #2, in today’s aggressive market, buyers are offering sellers “post-occupancy agreements” meaning, the buyer agrees to buy seller’s home, but simultaneously allows the seller to remain in the property after closing for a defined period of time (e.g. 1-2 months) for free.  Same question, who is responsible for Seller’s stuff and what if Seller never removes it?

Bailment.  The above scenarios describe a bailment relationship.  In essence, a bailment is created when the recipient (a bailee) temporarily holds an owner’s (the bailor’s) personal property with the expectation of redelivering the property back to the owner (bailor).[1]  Valeting a car is a common example of a mutually beneficial bailment, where the driver is the bailor (owner) who gets a benefit of being able to park his car, and the valet attendant (recipient) is the bailee who gets paid to store and return the car.   “Unlike a sale or gift, … a bailment involves a change in possession, not title.”[2]

There are different types of bailments such as: those for: (1) the exclusive benefit of the bailor (owner); (2) exclusive benefit of the bailee (recipient); or (3) for both of their mutual benefits.  Classifying the parties’ relationship is important because it defines the “duty of care” the bailee (recipient) must exercise when holding onto the bailor (owner’s) property.   Absent a contract clause redefining the relative rights of the bailor and bailee, the rules of bailment will generally control.

In this article we are talking about a “gratuitous bailment.”  One where the bailor (owner) asks to have their property stored by the bailee (recipient). In that scenario, there really is no benefit to the bailee (recipient).  So under what situation would the bailee (recipient) be responsible should something happen to the bailor (owner’s property) while being stored by the bailee (recipient)?

“If the bailment were gratuitous, it would be necessary to establish gross negligence on the part of the [bailee] in order for the [bailor] to recover against the bailee.”[3]  While gross negligence is very hard to prove; who wants any type of claim to be made at all?

Disclaimer Overkill.  Based on the above scenarios, Bryce Gilbert, Esq., owner, operator, and company attorney for Florida’s Title Insurance Company has proposed potential language, which is admittedly overkill, but the point is to addresses many concepts that the parties may not have thought about, which can be modified to suit your own individual purposes:


  1. Buyer may store Buyer’s personal property within Seller’s Property only in a location where Seller directs.
  2. Buyer may not store dangerous, hazardous, toxic, flammable, or anything that would cause undue risk to Seller.
  3. Seller may reject and refuse to store any of Buyer’s personal property.
  4. Seller is not obligated to inspect Seller’s property prior to taking possession of Seller’s property.
  5. Buyer shall only use licensed and insured movers, and shall name seller as an additional insured.
  6. Buyer shall apply for, obtain, and continue to comply with all Condominium or HOA rules, regulations, and requirements relating to moving.
  7. Buyer’s property is being stored at Buyer’s own and sole risk, and Buyer assumes full responsibility.
  8. Buyer shall purchase insurance coverage relating to Buyer’s personal property.
  9. Buyer fully releases and holds Seller (which includes its agents) harmless of and from any and all liability and damages arising out of, related to, or concerning Buyer’s personal property.
  10. Buyer waives any and all claims against Seller including but not limited to: negligence; gross negligence; intentional tort; recklessness; bailment; bad faith; theft; vandalism; casualty; conversion; trespass to chattel; fraud; civil theft; force majeur; accounting; claims in equity or in law; deterioration; or destruction; arising out of, related to, or concerning Buyer’s personal property whatsoever.
  11. Seller has no: duty of care; obligation to secure, safeguard, protect, prevent unauthorized use; nor keep separate, Buyer’s personal property.
  12. Seller is authorized to relocate Buyer’s property, without Buyer’s prior permission.
  13. Buyer agrees to indemnify and hold Seller harmless for any and all damages, attorney fees, costs, and liability arising out of or related to Buyer’s personal property.
  14. In the event Buyer fails to close on or before the closing date, Seller may demand (by providing notice to either Buyer or Buyer’s realtor which shall be deemed effective upon Buyer) that Buyer promptly and immediately remove Buyer’s personal property using licensed and insured movers within seven (7) calendar days (“Seller’s Notice”); and if Buyer fails to completely remove Buyer’s property then Buyer’s property will be deemed abandoned.
  15. After Buyer’s property is deemed abandoned, Seller may: (1) Charge Buyer $____ day for on-site storage / nuisance as a liquidated damage starting from the date of “Seller’s Notice” until such time as Buyer’s property is fully removed; (2) Take possession of the property; (3) Remove Buyer’s personal property without any liability whatsoever and in whatever manner and means Seller chooses in Seller’s sole and exclusive discretion; and (3) hold Buyer additionally liable for any and attorney fees and costs arising out of or relating to removal, storage, sale, retention, and disposition of the personal property whatsoever.
  16. The parties waive the requirements and application of Florida Chapter 715 relating to Disposition of Personal Property Landlord and Tenant Act..

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author Randy Gilbert, J.D. is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] S & W Air Vac Sys., Inc. v. Dept. of Rev., 697 So. 2d 1313, 1315 (Fla. 5th DCA 1997)

[2] Black’s Law Dictionary (11th ed. 2019) bailment.

[3] Armored Car Service, Inc. v. First Nat. Bank of Miami, 114 So. 2d 431, 434 (Fla. 33rd DCA 1959). (if the bailment relationship is mutually beneficial to both the bailee (recipient) and bailor (owner) then to recover damages against the bailee (recipient) the bailor would only need to prove the much lower standard of ordinary negligence.

Undoing Deeds – Disclaiming Property Rights

So why would someone want to refuse property given to them? 

Scenario #1 – Disinterested.  The first thought cloud that popped into to my head was: two (2) people in a car get pulled over, the passenger throws his bag of drugs to the driver and says, “here it’s yours!”  The driver looks back stupefied – now what?  “I disclaim this belongs to me!” says the driver. The scenario is extreme, but it gets the point across.

Because what prompted me to write this article was, what if a grantor conveyed real estate that the grantee either: never wanted; was mistakenly given; or due to grantee’s predicaments would not be within grantee’s best interest to take?

Scenario #2 – Mistake.  Errors in deeds are more common than you think but not all of them are easily fixed.[1] What if a grantor mistakenly conveys title to the wrong grantee?  Too bad, so sad for that grantor.  A corrective deed may not be used,[2] but as this article addresses there may be a work around.

Scenario #2 – Burdensome.  What if the property was undesirable; plagued by liens, code violations, environmental contamination, waste, an unsafe structure, and it would cost more to rehabilitate than it was worth?

Scenario #3 – Evading Judgment Creditors.Or a more common scenario, what if wealthy Grantor Grandpa wants to leave his three (3) grandchildren valuable property, but prior to or at the time of Grantor Grandpa’s death, one of the three (3) grandchildren, Debtor Dave racked up some serious judgments against him?  If Debtor Dave receives that 1/3rd interest it could be levied against and taken by Debtor Dave’s creditors.  Can a Grantee/Donee/Recipient of property give back property which is already deeded, conveyed, transferred, and recorded in the public records and which shows Debtor Dave as an Owner?

Undoing a Deed Transfer as if it Never Happened.   As a title company we deal with conveying and transferring property, but can a transfer be undone, rescinded, nullified, or cancelled?  I am not talking about transferring the property back – like A transfers to B, the property is vested in B, and then B transfers back to A (i.e. two separate transfers).  What I am talking about is cancelling the vested transfer as if the transfer from A to B never happened?  As if title never left A, and the property never vested in B in the first place?  Is there a way to hit Ctrl + Z, backspace, and just undo a deed?  The answer seems to be Yes.

The Florida Uniform Disclaimer of Property Interests Act (“FUDOPIA”) applies to disclaimers of any interest in or power over property, whenever created, and with limited exception (see below when barred) is the exclusive means under Florida law that a disclaimer may be made.[3]  “Disclaimer” and “Renunciation” both mean, the refusal to accept an interest in or power over property (like when appointed as a trustee, power of attorney, or agent over property).[4]  A person who disclaims an interest or power in property is called the Disclaimant.[5]

When Can a Disclaimer be Made?  Unless barred, a disclaimer can be made at any time.[6]

When are Disclaimers Barred or Disallowed?  You can lose your right to disclaim or renunciate your interest in property. Most poignantly, when taking affirmative action that would be completely inconsistent with disclaiming.  In other words, you cannot have your cake and eat it to.  You cannot utilize or accept an interest in property and then simultaneously disavow that you have any interest in that same property.  So a disclaimer of an interest in property will not be allowed in four (4) instances: (1) a written waiver of the right to disclaim; (2) The disclaimant accepts the property interest before the disclaimer becomes effective; (3) The disclaimant voluntarily assigns, conveys, encumbers, pledges, or transfers the property interest or contracts to do the foregoing before the disclaimer becomes effective; (4) The disclaimant is insolvent when the disclaimer becomes irrevocable. [7]  “Insolvent” means, that the sum of a person’s debts is greater than all of the person’s assets at fair valuation and that the person is generally not paying his or her debts as they become due. [8]

Can the Disclaimer be Partial, or Must it be Entirely?   A person can disclaim all or part, conditionally or unconditionally, any interest in or power over property. [9]  A partial disclaimer may be expressed as a fraction, percentage, monetary amount, term of years, limitation of a power, or any other interest or estate in the property. [10]

Can the Grantor prevent the Grantee from Disclaiming?  No.  Florida apparently does not follow one of the more creative playground rules known as “No take backs!”  In Florida, a person may disclaim their interest even if its creator imposed a restriction or limitation on the right to disclaim.  So a grantor cannot deed property to a grantee and eliminate the grantee’s right to renunciate or disclaim the property by including words to the effect of “No take backs.”  If a disclaimant makes a disclaimer then it is considered unconditional unless the disclaimant explicitly provides otherwise in the disclaimer.[11]

What are the Requirements for an Effective Disclaimer?  To be effective, a disclaimer must be: (1) in writing, (2) declare the writing as a disclaimer, (3) describe the interest or power disclaimed, (4) be signed by the person making the disclaimer, and (5) witnessed[12] and (6) acknowledged[13] in the manner provided for deeds of real estate to be recorded[14] in this state.[15]  Generally, a deed needs to be in writing, signed in the presence of two subscribing witnesses, properly signed and notarized, and meet certain requirements before it may be recorded.[16]

Delivering the Disclaimer.  In addition, for a disclaimer to be effective, the original disclaimer must be either delivered or filed.[17]  Delivery of a disclaimer may be effected by personal delivery, first-class mail, or any other method that results in its receipt.[18] Notwithstanding, delivery of a disclaimer of an interest in or relating to real estate is presumed upon recording the disclaimer in the county where the real estate is located.  A disclaimer sent by first-class mail is deemed delivered on the date it is postmarked, delivery by other methods are effective upon receipt.

When a Disclaimer is Invoked, When Does the Disclaimer Take Effect?  Once the disclaimer is validly invoked, it takes effect as of the time the instrument creating the interest becomes irrevocable.[19]  If however the interest arises under the laws of intestate succession (i.e. someone dying without a will or some other legal declaration), then the disclaimer will take effect at the time of the intestate’s death.[20]

So if the Property Interest is Disclaimed by the Intended Grantee, Who Does the Property Interest Now Belong To?   When a disclaimer occurs, it is not considered a transfer, assignment nor a release.[21]  Rather, well… this is weird, if you disclaim an interest in property, then much like your mother-in-law (just a joke), the law treats you as if you were dead.  Assuming that the instrument creating the interest does not say what happens if a disclaimer is made (e.g. if John disclaims then the interest goes to Jane) then the question turns to is the grantee an individual or not?

If the disclaimant is not an individual (e.g. a corporation, LLC, most trusts[22]  ) then the disclaimed interest passes as if the disclaimant did not exist. [23]  A deed from the owner to a nonexistent entity is a nullity.[24]  So, if a grantor conveyed to a non-existent entity it would be as if the conveyance was a nullity.

However, if the disclaimant is an individual then the disclaimed interest passes as if the disclaimant had died immediately before the interest was created, unless under the governing instrument or other applicable law the disclaimed interest is contingent on surviving to the time of distribution, in which case the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution.[25] So by example, if Grantor Grant conveys to Disclaiming Dan then it would be as if Grantor Grant conveyed to a dead guy, in which case presumably the property interest would revert back to Grantor Grant.  Strict legal title may not pass by a deed to a dead grantee.[26]  Title cannot vest in a fictitious person.[27]

Different rules apply to what happens to the property interest if the property interest being disclaimed is: a joint tenant with rights of survivorship,[28] a trust’s property,[29] or property held as tenants by the entirety.[30]

AND NOW FOR OUR OWN DISCLAIMER 🙂:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] house Of Representatives Staff Analysis Bill # CS/HB 567 Correction of Errors in Deeds FN. 2.

[2] See, Florida Uniform Title Standard 3.2 “A grantor who has conveyed land by an effective and unambiguous deed cannot avoid the effect of such conveyance by executing a new deed making a change in the conveyance, even though the latter deed purports to correct or modify the former.”  Compare Fla. Stat. 689.041 689.041 – Curative procedure for scrivener’s errors in deeds; see also, Five Tips Every Real Estate Practitioner Should Know About Defective Deeds Fla. Bar Journal, Vol. 82, No. 5  (May 2008)  Pg 37 by Stacy O. Kalmanson and Jerry Morris.

[3] Fla. Stat. §739.103 – Scope.  But seeFla. Stat. §739.402 – When disclaimer is barred or limited.

[4] Fla. Stat. §739.102(5) – Definitions.

[5] Fla. Stat. §739.102(3) – Definitions.

[6] Fla. Stat. §739.401 – When disclaimer is permitted; but compare, Fla. Stat. §739.402 – When disclaimer is barred or limited.

[7] Fla. Stat. §739.402 – When disclaimer is barred or limited.

[8] Fla. Stat. §739.102(8) – Definitions.  See also, Fla. Stat. §726.102 – Definitions.  “The term ‘Asset’ means property of a debtor, but the term does not include: (a)?Property to the extent it is encumbered by a valid lien; (b) Property to the extent it is generally exempt under nonbankruptcy law; or (c) An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.”

[9] Fla. Stat. §739.104(1) – Power to disclaim; general requirements; when irrevocable.

[10] Fla. Stat. §739.104(4) – Power to disclaim; general requirements; when irrevocable.

[11] Fla. Stat. §739.104 – Power to disclaim; general requirements; when irrevocable.

[12] See, Fla. Stat. §689.01 – How real estate conveyed; Fla. Stat. §692.01 – Conveyances executed by corporations; and Fla. Stat. §692.02 – Validation of conveyances; Fla. Stat. §605.04074(3) – Agency rights of members and managers.

[13] See, Fla. Stat. §695.03 – Acknowledgment and proof; validation of certain acknowledgments; legalization or authentication before foreign officials.; Fla. Stat. §117.04 – Acknowledgments; and Fla. Stat. §117.05 – Use of notary commission.

[14] See Fla. Stat. §695.26 – Requirements for recording instruments affecting real property.

[15] Fla. Stat. §739.104(3) – Power to disclaim; general requirements; when irrevocable.

[16] See, Fla. Stat. §689.01 – How real estate conveyed; Fla. Stat. §692.01 – Conveyances executed by corporations; and Fla. Stat. §692.02 – Validation of conveyances; Fla. Stat. §605.04074(3) – Agency rights of members and managers.

[17] Fla. Stat. §739.104(3) – Power to disclaim; general requirements; when irrevocable.

[18] Fla. Stat. §739.301 – Delivery or filing.  Different methods for filing and delivering apply for disclaimers of interests created under: Law of intestate succession or wil§739.301(2); testamentary trust§739.301(3); intervivos trust §739.301(4)Beneficiary designation made before the time the designation becomes irrevocable §739.301(5)Beneficiary designation made after the time the designation becomes irrevocable §739.301(6); by a surviving holder of jointly held property, or by the surviving tenant in property held as a tenancy by the entirety,§739.301(7); by an object, or taker in default of exercise §739.301(8); appointee of a nonfiduciary power of appointment §739.301(9); by a fiduciary of a power over a trust or estate §739.301(10); a power exercisable by an agent §739.301(11)§739.301(12)

[19] Fla. Stat. §739.201 – Disclaimer of interest in property.

[20] Fla. Stat. §739.201 – Disclaimer of interest in property.

[21] Fla. Stat. §739.104(6) – Power to disclaim; general requirements; when irrevocable.

[22] Fla. Stat. §739.201(3)(a) – Disclaimer of interest in property.  Referring to Fla. Stat. § 733.707 Carving out a different procedures for trusts where the grantor has at the decedent’s death the right of revocation.

[23] Fla. Stat. §739.201(3)(b) – Disclaimer of interest in property.

[24] See, Florida’s Uniform Title Standard 3.1citing Fund Title Note 11.01.05, citing, Belcher Center LLC v. Belcher Center, Inc., 883 So.2d 338 (Fla. 2d DCA 2004).

[25] Fla. Stat. §739.201(3)(a) – Disclaimer of interest in property.  (“However, if, by law or under the governing instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution. For purposes of this subsection, a disclaimed interest is created at the death of the benefactor or such earlier time, if any, that the benefactor’s transfer of the interest is a completed gift for federal gift tax purposes.”)

[26] Fund Title Note 10.04.01 Death of One Joint Grantee Before Execution of Deed citing, Hutto v. Hutto, 66 Fla. 504 (1913) (However, where dead grantee paid for the property prior to the dead grantee dying, the dead grantee’s estate could maintain an equitable action to quiet title and reformation of the deed).

[27] Fund Title Note 10.04.02 Fictitious Names

[28] Fla. Stat. §739.202 – Disclaimer of rights of survivorship in jointly held property.

[29] Fla. Stat. § 739.204 – Disclaimer of interest by trustee.

[30] Fla. Stat. §739.203 – Disclaimer of property held as tenancy by the entirety; see also Fla. Stat. §732.4015 Devise of homestead.—regarding devise of homestead by surviving spouse.

Giving the Bird. Lady-Bird Deeds

History behind the Lady Bird Deed – Myth Busted. “When you have a choice of printing the truth or the legend—print the legend.”[1]

Many still believe the origin of the “Lady Bird Deed” came from an ingeniously drafted deed first used by President Lyndon B. Johnson’s lawyers which allowed the President to retain full ownership and control of his real estate while alive, but triggered a transfer on death (n/k/a T.O.D.) clause to automatically pass real estate upon Lyndon B. Johnson’s death instantaneously to: (1) his wife “Lady Bird” Johnson, and then (2) upon her death to their children, without the delays or expense of a will, trust, court proceeding, or probate.

Wives of presidents are referred to as “The First Lady,” so is that where the term “Lady Bird Deed” came from?  Nope.  Claudia Alta “Lady Bird” Johnson was nicknamed at six (6) years old by her nanny, because she was said to be, “as pretty as a lady bird.”[2]  So the famous “Lady Bird Deed” got its name from a six-year old’s nanny?  Nope again.

A hunt for the original Lady Bird Deed revealed that neither the supervisory archivist, nor deputy director of The Lyndon B. Johnson Library, ever heard of a Lady Bird Deed.  Moreover, the librarians’ follow-up with both the surviving members of the Johnson family, and more importantly the financial administrators of Mrs. Lady Bird Johnson’s estate, also dead-ended, as no one ever heard of a Lady Bird Deed.[3]

Comically, “the first Lady Bird deed was drafted by Florida attorney Jerome Ira Solkoff around 1982, nearly ten years after the death of President Johnson. In his elder law book and lecture materials, Solkoff used a fictitious cast of characters with the names Lyndon (husband), Lady Bird (wife), Lucie (daughter), and Lynda (daughter) in examples explaining the usefulness of this new type of deed. So as the-story-goes the nickname Lady Bird became associated with the deed.”[4]  Jerome Ira Solkoff, Esq. reconfirmed the story.[5]

Today Lady Bird Deeds, which are more formally called enhanced life estates, are commonly used in Florida and throughout the United States.  Nineteen (19) other states codified its use by adopting the Uniform Real Property Transfer on Death (TOD) Act and today there are talks in the Florida Bar’s RPPTL  section (Real Property Probate and Trust Section) about possibly doing the same.

Chart showing Differences between Enhanced Life Estate (i.e. Lady Bird Deed) Regular Life Estate
Chart showing Differences between Enhanced Life Estate (i.e. Lady Bird Deed) Regular Life Estate

I. What is a Lady Bird Deed (a/k/a Enhanced Life Estate)?  When property is owned, it is usually owned as fee simple absolute, meaning the grantee (i.e. recipient) receives 100% ownership and control of the property.  But if an owner wanted to maintain ownership of their property for their entire life and leave it to their spouse and descendants without the need of a will, trust, or probate then the use of Life Estates is a great alternative.

II. Advantages of Enhanced Life Estate.  Using a Lady Bird Deed, you can grant yourself an enhanced life estate interest in your own property and simultaneously grant your beneficiaries, called remaindermen, the real property upon your death.  A life estate obtained through a Lady Bird Deed is called an enhanced life estate.  The life estate is said to be enhanced because during the enhanced life estate holder’s lifetime they have all the characteristics of full ownership without the burdens that come with a regular life estate.

Under an enhanced life estate, during the owner’s lifetime, the beneficiaries have no interest in the land, because the owner retains full power to remove the beneficiary, until the owner dies.  Because no property interest vests in the beneficiary until the transferor’s death, the transferor retains complete control to amend, modify, or revoke the beneficiary’s designation during the transferor’s lifetime.  Stated another way, the Lady Bird Deed does not transfer a current interest in the property to the beneficiary.  Generally, all that is required to remove a remaindermen is the filing of a revocation of the lady bird deed prior to the grantor owner’s death. Because no property interest passes to the beneficiary until the death of the transferor, such revocation does not require the named beneficiary, or beneficiaries, to join. If a transferor wishes to modify the beneficiaries to a particular piece of real property, the transferor can simply execute and record a subsequent deed, which will supersede the previous transfer and become the effective deed.[11]  Moreover, unlike a regular life estate, an enhanced life estate holder can still mortgage, encumber, sell, transfer, or modify, the real property without the remaindermen’s consent.

III. Example of Enhanced Life Estate.  The example that made the Lady Bird Deed famous is:

Lyndon and Lady Bird, his wife, grantors, to Lyndon and Lady Bird, his wife, grantees, a life estate, without any liability for waste, with full power and authority in them to sell, convey, mortgage, lease and otherwise dispose of the property described below in fee simple, with or without consideration and without joinder by the remaindermen, and to keep absolutely any and all proceeds derived therefrom. Further, the grantors reserve the right to change remaindermen at any time without consent of remaindermen. Upon death of the life tenants, title shall be in Lucy and Lyndajoint tenants with rights of survivorship.[12]

IV. Regular Life Estates distinguished. The key advantages of the enhanced life estate is its  combination of retained control for the transferor, simplicity, and revocability.Regular life estates however are irrevocable.  When a regular life estate holder identifies the remaindermen in the deed, the remaindermen receive an immediate vested right in the real estate, regardless of when the regular life estate holder dies.  Therefore, there is no removing the remaindermen without the remaindermen’s consent.  Moreover, if a regular life estate holder wanted to mortgage, encumber, sell, or affect the real property to the detriment of the remainderman, they could not unless the regular life estate holder obtained the remainderman’s prior permission.  An ordinary life tenant had no right to cut the timber for commercial purposes without the remaindermen’s consent.[13]  Furthermore, because remaindermen receive an immediate vested interest, the remainderman’s interest in the real estate is subject to collection from creditors.  A regular life estate holder cannot neglect the property allowing it to fall into disrepair or commit waste or fail to pay taxes and if it does then the remainder can have a receiver appointed over the property.[14]    The remainder (future) interest holder must approve any improvements to the property, and has the right to inspect the property for waste or damage.[15]

In Florida, a tenant for life or a person vested with an ordinary life estate [i.e. not an enhanced life estate] is entitled to the use and enjoyment of his estate during its existence. The only restriction on the life tenant’s use and enjoyment is that he not permanently diminish or change the value of the future estate of the remainderman. This limitation places on the `ordinary life tenant’ the responsibility for all waste of whatever character. It is well settled that life tenants are bound in law to pay property taxes during their continuance of their estate. Failure to pay taxes constitutes waste. Therefore, it follows that the wife [ordinary life estate holder] would have the responsibility to pay all ordinary and necessary expenses that inure to a homeowner, including taxes, insurance, homeowner’s association fees, and general repairs for the upkeep and maintenance of the property, and not to dissipate or cause waste to the [remaindermen’s future] property.[16]

V. How long does a life estate last?  Sounds silly I know, Typically, the owner of the life estate (called a life tenant) owns the property during their own lifetime and upon the death of the life tenant the remaindermen then become the new owner.  However, a life estate may be measured by the life of another, which is called a life estate per autre vie – French “for the life of another.”

VI. Medicaid planning.  Medical assistance (Medicaid) is a program funded jointly by the states and the federal government.  It provides health coverage to pay for hospital stays, doctor bills, prescription drugs, and other health costs.  In Florida, the Agency for Health Care Administration is responsible for Medicaid.  To apply for Medicaid in Florida, an individual must provide a detailed list of all their assets to Florida’s Department of Children and Family Services or the Social Security Administration.

The Lady Bird Deed transfer has no effect on Medicaid eligibility.[17]

Furthermore, if you become a Medicaid recipient, then a Lady Bird Deed can be useful in avoiding Medicaid bills, by reducing or even eliminating the amount your estate would need to pay back to Medicaid.  After a Medicaid recipient dies, Medicaid can seek repayment “Upon filing of a statement of claim in the probate proceeding” against the decedent’s estate.[18]

First, Medicaid only seeks reimbursement from assets within the probate estate.  Real estate held as an enhanced life estate, will not be included in a probate estate, because it automatically transfers to the beneficiary (i.e. the remaindermen) upon death.  So that property would not be included in the probate estate.  Therefore, using a Lady Bird deed can allow heirs to inherit a property that might otherwise have been sold to pay a Medicaid reimbursement claim.

Secondly, a Florida Medicaid recipient’s homestead is exempt from Medicaid reimbursement.[19]  Homesteaded property is disregarded.[20]  So what we are really talking about trying to protect is non-homestead real estate in Florida (such as rental, vacation homes, or investment property) which may be subject to Medicaid repayment.

By keeping non-homesteaded  real estate in a Lady Bird Deed, the property never becomes part of the deceased’s probate estate.  The State will not be able to make a claim against any property with a valid Lady Bird Deed, because the property does not become part of the decedent’s estate. Instead, the property automatically transfers into the ownership of the beneficiary/remaindermen listed on the Lady Bird Deed.

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] 1962 John Ford film, “The Man Who Shot Liberty Valance” starring John Wayne and James Stewart.

[2]  Obituary: Lady Bird Johnson BBC Online. July 12, 2007

[3] Kary C. Fran, The Search for the Lady Bird Deed 34 Mich. Prob. & Test. Plan. J. (Summer 2015).

[4] Gerry W. Beyer & Kerri M. Griffin, Lady Bird Deeds: A Primer for the Texas Practitioner, Estate Planning Developments For Texas Professionals, (Jan. 2011)

[5] Id.  citing, 14 Fla. Prac., Elder Law § 9:53 “Lady Bird” life estate deeds—Life estate deed to convey future title to heirs (2014-15 ed.)

[6] Fla. Stat. §196.041(2) – Extent of homestead exemptions.— “A person who otherwise qualifies by the required residence for the homestead tax exemption provided in s. 196.031 shall be entitled to such exemption where the person’s possessory right in such real property is based upon an instrument granting to him or her a beneficial interest for life, such interest being hereby declared to be “equitable title to real estate….”

[7] “The homestead “ownership” requirement under the Florida Constitution does not restrict the type of property ownership; therefore, a life tenant can qualify for the homestead creditor exemption with his or her life estate. The Florida Supreme Court in Aetna Ins. Co. v. Lagasse, 223 So. 2d 727 (Fla. 1969), held that remainder interests, including vested remainders, were not able to qualify for the homestead creditor exemption, even if he or she lived on the property, because there was no ‘present right to possession.’ Thus, a life tenant can qualify for the homestead creditor exemption with a life estate, but the Florida Supreme Court has determined that a remainderman cannot qualify with a remainder interest.” See, Joseph M. Percopo, Esq., The Impact Of Co-Ownership On Florida Homestead, Vol. 86, No. 5 Pg. 32 (Florida Bar Journal May 2012).

[8] It is possible for a life estate holder to disclaim or renunciate a gift of the interest given.  See, Weinstein v. Mackey, 408 So.2d 849 (Fla. 3d DCA 1982) (regarding renunciation of a life estate by a beneficiary); Richey v. Hurst, 798 So.2d 841 (Fla. 5th DCA 2001) (surviving spouse is given a life estate created under a trust and later disclaims that life estate even after the life estate has commenced); Kearley v. Crawford, 112 Fla. 43, 151 So. 2d 293 (Fla. 1933) (creditor unable to collect on judgment to force the sale of land left to son, when before judgment was rendered against him, debtor/son renounced his devise under a will, as well as his rights as an heir at law.  “[E]lection to take under or against a will is a personal right of the legatee or devisee, and that it is one that cannot be controlled by his creditors”); Robert C. Meyer, Esq. Disclaimer Statute May Permit Judgment Debtors To Deliver Money To Friends Or Family With Nothing To Creditors, But Not Always In Florida Vol. 79, No. 4 Pg. 42 (Florida Bar Journal April 2005); Florida Statute §689.21  Disclaimer of interests in property passing under certain nontestamentary instruments or under certain powers of appointment.

[9] “When the life tenant qualifies for the homestead creditor exemption, the property is still protected from the life tenant’s creditors, but it is not safe from the remainderman’s creditors. For example, if Donna takes a life estate in blackacre while qualifying for the homestead creditor exemption and grants Ed and Frank equal remainder interests, Ed and Frank’s creditors can potentially take their remainder interests in blackacre. However, even if Ed or Frank’s creditors took their interest, there is little they could do with it until Donna died. Co-owners who share interests in time (life tenants and remainderman), unlike co-owners who share present interests, may not partition life estates. Therefore, a life tenant, such as Donna, could continue to reside on the property without worrying about the remaindermans’ creditors being able to force sale of the property. However, it is important to note that recently, two Florida bankruptcy cases held that a person with a vested remainder who lived on and made the property his or her residence could qualify for the homestead creditor exemption.”See, Joseph M. Percopo, Esq., The Impact Of Co-Ownership On Florida Homestead, Vol. 86, No. 5 Pg. 32 (Florida Bar Journal May 2012).

[10] Florida Statute §738.801 Apportionment of expenses; improvements.

(1) For purposes of this section, the term:

(a) “Remainderman” means the holder of the remainder interests after the expiration of a tenant’s estate in property.

(b) “Tenant” means the holder of an estate for life or term of years in real property or personal property, or both.

(2) If a trust has not been created, expenses shall be apportioned between the tenant and remainderman as follows:

(a) The following expenses are allocated to and shall be paid by the tenant:

  1. All ordinary expenses incurred in connection with the administration, management, or preservation of the property, including interest, ordinary repairs, regularly recurring taxes assessed against the property, and expenses of a proceeding or other matter that concerns primarily the tenant’s estate or use of the property.
  2. . Recurring premiums on insurance covering the loss of the property or the loss of income from or use of the property.
  3. Any of the expenses described in subparagraph (b)3. which are attributable to the use of the property by the tenant.

(b) The following expenses are allocated to and shall be paid by the remainderman:

  1. Payments on the principal of a debt secured by the property, except to the extent the debt is for expenses allocated to the tenant.
  2. Expenses of a proceeding or other matter that concerns primarily the title to the property, other than title to the tenant’s estate.
  3. Except as provided in subparagraph (a)3., expenses related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of such activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties, and defending claims based on environmental matters.
  4. Extraordinary repairs.

(c) If the tenant or remainderman incurred an expense for the benefit of his or her own estate without consent or agreement of the other, he or she must pay such expense in full.

(d) Except as provided in paragraph (c), the cost of, or special taxes or assessments for, an improvement representing an addition of value to property forming part of the principal shall be paid by the tenant if the improvement is not reasonably expected to outlast the estate of the tenant. In all other cases, only a part shall be paid by the tenant while the remainder shall be paid by the remainderman. The part payable by the tenant is ascertainable by taking that percentage of the total that is found by dividing the present value of the tenant’s estate by the present value of an estate of the same form as that of the tenant, except that it is limited for a period corresponding to the reasonably expected duration of the improvement. The computation of present values of the estates shall be made by using the rate defined in 26 U.S.C. s. 7520, then in effect and, in the case of an estate for life, the official mortality tables then in effect under 26 U.S.C. s. 7520. Other evidence of duration or expectancy may not be considered.

(3) This section does not apply to the extent it is inconsistent with the instrument creating the estates, the agreement of the parties, or the specific direction of the taxing or other statutes.

(4) The common law applicable to tenants and remaindermen supplements this section, except as modified by this section or other laws.

[11] Stephanie Emrick, Transfer on Death Deeds: It Is Time to Establish the Rules of the Game, 70 Fla. L. Rev. 469 (2018).

[12] 14 Fla. Prac., Elder Law § 9:53 “Lady Bird” life estate deeds—Life estate deed to convey future title to heirs (2020-2021 ed.)

[13] See, Sauls v. Crosby, 258 So. 2d 326, 327 (Fla. 1st D.C.A. 1972)

[14] Chapman v. Chapman, 526 So. 2d 131, 135 (Fla. 3d D.C.A. 1988) “Upon the failure of the life tenant to pay the taxes, the remainderman is entitled to have a receiver appointed to collect the rents and apply them to discharge the tax indebtedness.”

[15] Joseph M. Percopo, Esq., The Impact Of Co-Ownership On Florida Homestead, Vol. 86, No. 5 Pg. 32 (Florida Bar Journal May 2012).

[16]  Schneberger v. Schneberger, 979 So. 2d 981 (Fla. 4th D.C.A. 2008)

[17] 1640.0613.01 Property Transferred and Life Estate Retained (MSSI)  “If an individual retains life estate using a lady bird deed or life estate with powers, no transfer has occurred. The individual retains full ownership powers in the property and it is only upon their death that the property transfers ownership to the remainderman.”

[18] Florida Statute §409.9101 Recovery for payments made on behalf of Medicaid-eligible persons.

[19] 1640.0305.03 Life Estate Ownership (MSSI, SFP) ““The owner of an enhanced life estate (also known as a lady bird deed or life estate with powers) has the same rights as complete ownership, including the right to sell without the consent of the remainderman. Lady bird deeds and life estates with powers are counted the same as other real property an individual may own and it may be excluded if it qualifies as the individual’s homestead, including under intent to return when absent from the home.”

[20] “Florida Statute §409.9101(7)  “No debt under this section shall be enforced against any property that is determined to be exempt from the claims of creditors under the constitution or laws of this state.”

Buying Property With Bitcoin – Unlikely

Using cryptocurrency to purchase properties could present numerous issues.

But there is a way. When buying real estate, there is nothing more reassuring to a seller than when a buyer pays using a good-old-fashioned irrevocable wire transfers. But with the advent of digital currencies, consumers want to instantly transfer money using apps like Venmo, Zelle, PayPal, or ACH or Bitcoin.[1]

Problem #1 – No Title Insurance. You will not find an underwriter who will issue title insurance for a property bought with Bitcoin. The insured amount of an Owner’s Title Policies is the purchase price. Purchase prices are typically the fair market value. If Bitcoin drops in value from contract to closing, the title policy may be overinsuring the transaction because the fair market value was not paid for the property. So the best practice would be to sell the Bitcoin and then purchase with U.S. Dollars (USD).

Problem #2 – Getting a Loan using Bitcoin. Fannie Mae does not recognize Bitcoin or any other digital currency unless it was previously converted into USD and deposited into an eligible asset account and previously seasoned for at least (2) two months. Fannie also requires a paper trail showing that funds from the cryptocurrency account were previously owned by the borrower.

Problem #3 – Not “Good Funds” Florida Administrative Code 69O-186.008 entitled “Escrow Requirements says in part that, “a title insurance agent… may not disburse funds unless the funds are collected funds … mean[ing] funds deposited, finally settled and credited to the title insurance agent’s or title insurer’s trust account.” There are a limited number of exceptions (e.g. certified check; cashier’s check; money order; checks from certain banks and credit unions; checks from licensed mortgage brokers; trust checks from lawyers, real estate brokers, title agents, and personal checks of $500 or less) but none of the exceptions seem to refer to digital curencies.

Therefore, the buyer should first convert its digital funds into USD prior to transfer. If the buyer has Bitcoin, but the seller wants cash, then the transaction is no different than a normal transaction. The title company is typically not concerned with what legal assets – stock, bonds, other land, or Bitcoin – may have been sold to generate the buyer’s funds which are ultimately wired into the title company’s trust account. Our concern is receipt of “Good Funds.”

Problem #4 – Claw Back, the American Land Title Association put out a memo declaring digital currencies problematic; because they do not have the same level of security, stability, payment assurance, and consumer protection due to the risk of funds being clawed back or charges reversed.

Problem #5 – Marketing. Right now the real estate market is hot for sellers. Offering to sell a property in either USD or Bitcoin may create a marketing buzz, but when sellers are currently receiving multiple offers, why would a seller choose Bitcoin instead of US Dollars?

Problem #6 – Market Fluctuations. Sellers may not want to risk their nest egg by converting their largest asset into bitcoin which is highly volatile. During March 2021 Bitcoin fluctuated over $10,000.

Problem #7 – Paying Off Property Expenses. While the Bitcoin amount may satisfy the agreed-upon sales price of the property, what about other settlement expenses which need to be paid off in USD like: loans, property taxes, releases, payoffs, recording fees and of course our fees?

Problem #8 – Disclosures . What value to enter on the federally mandated Closing Disclosure?

Problem #9 – Government Reporting. Reporting to FinCEN, the IRS, and state tax authorities the amount of the transfer.

Solution. Convert the Bitcoin to U.S. Dollars and then use the USD to buy the property.

DISCLAIMER: Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant. The author is neither an attorney nor an accountant. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] Transfers using Cybercurrencies like Bitcoin involve the Bitcoin Recipient: (1) Opening the Recipient’s “Wallet” found at; (2) Select “Receive”; (3) The Recipient’s Wallet will generate a QR Code (if you’re on your phone) or a link if on your desktop; (4) Provide the Recipient’s link or QR code to the Bitcoin Sender who will now: (5) Open the Sender’s Bitcoin Wallet; (6) Click” Send”; (7) Copy and paste the Recipient’s QR Code or link into the Sender’s Wallet App; (8) Enter how much the Sender wants to send; and (9) Slide to Send.


The unfairness of “Fair Market Value” (FMV) is, well… who is to say what dollar amount is considered fair?  That was a question Virginia’s Supreme Court in Wilburn v. Mangano, 851 S.E. 2d 474 (Dec. 10, 2020) had to decide when determining whether a real estate contract was even valid when a buyer and seller agreed to sell property on a specified date using the ambiguous price term “at Fair Market Value,” without any more specificity as to how that FMV was to be determined.  That case is persuasive authority as to what may happen here in Florida.


In Florida Real Estate Contracts should be “definite and certain as to essential terms.” According to Muñiz v. Crystal Lake Project LLC, 947 So.2d 464 (Fla. 3 DCA 2006) “essential” terms include:

  • Description of the land;
  • Interest in the land being conveyed;
  • The Purchase price;
  • Time of Payment; and
  • Terms of Payment (e.g. financing terms)

Florida’s Supreme Court defines FMV using ”the classic formula that it is the amount a purchaser willing but not obliged to buy, would pay to one willing but not obliged to sell.” Walter v. Schuler, 176 So. 2d 81, 86 (Fla. 1965) (“ ’fair market value’ and ‘just valuation’ should be declared ‘legally synonymous’”).

Florida’s Department of Revenue defines FMV as, “the price at which a property, if offered for sale in the open market, with a reasonable time for the seller to find a purchaser, would transfer for cash or its equivalent, under prevailing market conditions between parties who have knowledge of the uses to which the property may be put, both seeking to maximize their gains and neither being in a position to take advantage of the exigencies of the other.”) F.A.C. 12D-1.002(2).

The IRS defines FMV as “the price at which the property would change hands between a buyer and a seller when both have reasonable knowledge of all the necessary facts and neither is being forced to buy or sell. If parties with adverse interests place a value on property in an arm’s-length transaction, that is strong evidence of fair market value. If there is a stated price for services, this price is treated as the fair market value unless there is evidence to the contrary.”  IRS  Pub. 544 Pg. 3 Sales and Other Dispositions of Assets

The Appraisal of Real Estate (14th  Edition, 2013)’s defines “Market Value”, as “The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self interest, and assuming that neither is under undue duress.”

The FDIC requires real estate appraisals for residential (if more than $400,000) and commercial (if more than $500,000) to be based on “Market Value.”  12 CFR §§ 323.3(a)(1),(13)12 CFR §323.4(e) “Market Value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

(1) Buyer and seller are typically motivated;

(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;

(3) A reasonable time is allowed for exposure in the open market;

(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”

Black’s Law Dictionary defines FMV, as “[t]he price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm’s-length transaction.” Black’s Law Dictionary 1865 (11th ed. 2019);


In Wilburn, a mother’s will and codicil (i.e. an amendment to a will) allowed her son to exercise an option to purchase the mother’s property by paying his two (2) sisters “an amount equal to the fair market value at the time of my death.”  The son served notice exercising his option, the sisters obtained two (2) appraisals of the FMV, with one valuing the property at $311,000 and the other at $270,000.  The sisters offered to settle in the middle at $290,500, but the brother refused.  The brother argued there was no enforceable contract because the price term was not sufficiently specific to establish mutual assent to the Property’s purchase price.  The trial court agreed and dismissed the case against the brother “because the method to compute fair market value was not provided.”  The Court observed that “An incomplete contract … is one from which one or more material terms have been entirely omitted” and that “A contract is uncertain if one of its material terms is expressed in so inexact, indefinite, or obscure language that the intent of the parties cannot be sufficiently ascertained to enable the court to carry it into effect.”  “Price is a material term, and it must be either “fixed by the agreement itself” or the agreement must provide a mode “for ascertaining it with certainty,” in order for a court to enforce….”

The Court noted that “There is no single, fixed approach to determine fair market value, as applied by appraisers or Virginia courts.”  “To determine a property’s fair market value, Virginia courts recognize many valuation approaches, such as the cost approach, income approach, sales approach, development cost analysis, and comparable sales approach.”

Valuation methods.    Appraisers can approach valuation using a: cost approach (how much will it cost to reproduce or create a comparable); income approach (how much income is anticipated); or sales comparisons approach  (how much are similar properties in relevant marketplace)[1]

The Court went on to state, “Each of these approaches utilizes different characteristics of a property to estimate fair market value, and each analyzes different elements of the property [as] likely [to] affect the price a potential buyer would be willing to pay for the property on the open market.”  Absent a more precise specification … regarding the particular approach to be applied to determine the Property’s fair market value as of Jeanne’s death, the codicil does not provide the price of the Property, or a means of ascertaining the price with certainty, without subsequent agreement between the parties. By its very nature, what is meant by the term fair market value—what a buyer is willing to accept and what a seller is willing to pay for something on a given day—cannot be known with certainty absent a more specific means for determining it being provided in the codicil. In this instance, the language in the codicil lacks the precision required to produce a ‘certainty’ as to price, which would allow a court to equitably compel a party to specifically perform a contract for the purchase of real property.”

Lesson to be learned.  If a buyer and seller are going to agree to price property at “FMV” then they may be well advised to come up with a method of making the price much more certain and definite.  In an effort to do so, I have seen parties agree to be bound by a certain appraiser, or by someone neutral who will determine an amount which everyone will be bound.   Either way seek advice.

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] See, Appraisal Institute, Understanding Appraisals, The appraiser estimates the degree of similarity or difference between the subject property and the comparable sales by considering various elements of comparison:

  • Real property rights conveyed
  • Financing terms
  • Conditions of sale
  • Expenditures made immediately after purchase
  • Market conditions
  • Location
  • Physical characteristics
  • Economic characteristics
  • Use/zoning
  • Non-realty components of value


On January 1, 2021, Congress passed the Corporate Transparency Act (“CTA”) establishing new mandatory self-reporting requirements for corporations, LLCs, and similar entities.  As of this article, reporting forms are not available, however the Department of Treasury charged FinCEN (Financial Crimes Enforcement Network ) with creating regulations and implementing the CTA.  The CTA itself, is found deep within The National Defense Authorization Act (“NDAA”) on page 1217.  The CTA was passed by Congress, vetoed by President Trump, and then resurrected to become law when Congress overrode the President’s veto (civics lesson: overriding a veto requires at least a 2/3 vote in both the House and Senate).

Purpose of CTA.  The CTA is the first significant U.S. anti-money laundering law in 20 years. When businesses are formed, most states do not require ownership information.  The CTA is designed to ban anonymous shell companies.

Why Shell Companies are Attractive to Criminals?  To remain anonymous, criminals form shell companies, usually in the form of LLCs, to purchase real estate and high valued assets. The assets are purchased in the shell company’s name, thereby concealing the true individual owners’ identities.  Anonymous shell companies are used to rapidly launder large amounts of money for: financing terrorism, tax fraud, human and drug trafficking, counterfeiting, piracy, securities fraud, financial fraud, acts of foreign corruption, and otherwise hide illicit wealth.

Corporate Layering Like Russian ‘‘Matryoshka’’ Dolls.  To evade detection, business layer their ownership, like Russian ‘‘Matryoshka’’ dolls, across various secretive jurisdictions so each time an investigator obtains ownership records, the newly identified owner is yet another corporate entity.

Corporate Layering can be like Russian “Matryoshka” Dolls

States Allowing Anonymous Company Ownership Directly and Indirectly.  Reportedly, some states do not disclose ownership information for LLCs on the internet such as: ColoradoGeorgiaIndianaNew Mexico, Alabama, Delaware Virginia, and Wyoming.  Other states do not require disclosure of information to the State at all such as: ColoradoGeorgiaIndiana, and New Mexico. Yet further, states such as Nevada, Delaware, and Wyoming, do not require ownership information to be updated, thus allowing temporary owners, directors, managers, or general partners called nominees to form the LLC. The nominee’s name and contact information will show up on the public record, and immediately thereafter, the nominee will resign allowing the true owner to assume control as the undisclosed manager of the LLC.

Florida’s Anonymous Shell Company Loophole.  In Florida, LLCs are formed in minutes using Florida’s Secretary of State online portal and paying a $125.00 fee.  When forming an LLC in Florida either a “member” or a “manager” must be listed.  So what’s the loophole?  Instead of identifying the individual “Members” (i.e. those with ownership interests in the LLC), Florida alternatively allows incorporators (those forming the LLC) to list “Managers” who are authorized to act on behalf of the LLC.   The Manager, can be an individual person or another business entity such as another LLC.  In other words, a Florida, LLC managed by another LLC.  This layering of LLCs is the loophole in Florida allowing for anonymity in company ownership.  So if one were to form  “Florida, LLC” and identify its manager as “New Mexico, LLC”, then based on the foregoing, a creditor who is following the paper trail from Florida to its manager in New Mexico (where no ownership information is required to be disclosed) may find itself at a  dead-end.

Reporting – Do “Beneficial Owners” of New or Existing Businesses Have to Report to FinCen?   Reporting requirements apply to “Beneficial Owners” of corporations, LLCs, and other similar entities which: Already exist; Will be newly formed; and Those formed in a foreign country and registered to do business in the US through its filing with the Secretary of State.

Exemptions from Reporting to FinCen.  Larger companies, heavily regulated companies, and companies that already provide information to a relevant government agency. The CTA explicitly exempts: (1) Companies employing more than 20 people, report more than $5 million in revenues on tax returns, and have a physical presence in the United States; (2) Most financial services institutions, including investment and accounting firms, securities trading firms, banks, and credit unions that report to and are regulated by government agencies such as the Securities and Exchange Commission, the Office of the Comptroller of the Currency, or the FDIC; and (3) Churches, charities, and other nonprofit organizations.

Who are “Beneficial Owners?”  The CTA will require “beneficial owners” of non-exempt businesses to file “beneficial ownership” information with FinCen.  Under the CTA, a “beneficial owner” is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise:

  • Exercises substantial control over an entity; or
  • Owns or controls 25% or more ownership interests in an entity.

Five (5) Exceptions to Who is Considered a Beneficial Owner.   There are five (5) general exceptions from the term “beneficial owner”:

  • Minor children, if the information of the parent or guardian is reported;
  • Individuals acting solely as an employee and whose control over or economic benefits from such entity is derived solely from being an employee;
  • Individuals whose only interest in the entity is through inheritance;
  • Creditors, unless the creditor meets the requirements of a beneficial owner; and
  • Individuals acting as a nominee, intermediary, custodian, or agent on behalf of another individual;

What Owner information must be reported to FinCen?  Each Beneficial owner’s:

  • Full legal name;
  • Date of birth;
  • Current residential or business street address (as of the date the report is delivered,); and
  • ID number from a:
  • Nonexpired US Passport;
  • Nonexpired ID issued by a State, local government, or Indian Tribe to the individual acting for the purpose of identification of that individual;
  • Nonexpired driver’s license issued by a State; or
  • Nonexpired passport issued by a foreign government.

Can’t evade the CTA’s Beneficial Ownership by using “Bearer instruments.”  You can’t just issue the shares or interests in the business to “bearer.”  “Bearer” means anyone holding something, like a check, promissory note, or in this case a stock certificate, or LLC’s membership interest, which states that it is “payable to bearer,” means whoever holds this paper can receive the funds due on it without their name specifically appearing on it.  Under the CTA, “A corporation, limited liability company, or other similar entity … may not issue a certificate in bearer form evidencing either a whole or fractional interest in the entity.”

Time for Reporting for Existing Businesses, and Newly Formed Businesses.  The CTA obligates the Secretary of Treasury to draft regulations.  Business entities existing before those regulations go into effect will have two (2) years to submit their report to FinCEN.  Business entities formed on or after those regulations go into effect will just submit their report to FinCen at the time the new business entity is formed or registered.

What if the Business Owners Change?  Report the change to FinCen within one (1) year.

Will my Ownership Reporting Information be Public?  No.  “beneficial ownership information … is sensitive information and will be directly available only to authorized government authorities, subject to effective safeguards and controls….”  The information will be stored “in a secure, nonpublic database, using information security methods and techniques that are appropriate to protect nonclassified information systems at the highest security level.”

Who May Obtain my Ownership Information?  (1) Federal agencies engaged in national security, intelligence, or law enforcement activity; (2) State, local, or Tribal law enforcement agency, if a court of competent jurisdiction including any officer of such a court, has authorized the law enforcement agency to seek the information in a criminal or civil investigation; (3) Financial Institutions; (4) Department of treasury for Tax purposes.

What if I fail to Report my Ownership Information. “lt shall be unlawful for any person to willfully provide, or attempt to provide, false or fraudulent beneficial ownership information, … false or fraudulent identifying photograph or document, … or  fail to report complete or updated beneficial ownership information to FinCEN.” Penalties include: “(i) US civil penalty of not more than $500 for each day that the violation continues or has not been remedied; and “(ii) may be fined not more than $10,000, imprisoned for not more than 2 years, or both.”   I can only assume these stiff penalties are aimed at severely curtailing criminals from even trying to use anonymous shell companies.

Penalties for Unauthorized Disclosure of Ownership Information. A person who misuses the information (presumably a government employee or financial institution who maliciously releases the information) can be liable for a “civil penalty of not more than $500 for each day that the violation continues or has not been remedied; and “(ii)(I) shall be fined not more than $250,000, or imprisoned for not more than 5 years, or both….”

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney or accountant.  The author is neither an attorney nor an accountant.  FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®