Florida Property Ownership Laws Explained: A Clear Guide

Florida Property Ownership Explained

Understanding Florida property ownership laws is important for Florida home buyers, home sellers, and Florida real estate investors. Florida has a relatively simple and straightforward system of property ownership. The three most common ways in which property can be owned are: as a fee simple (the most common form of ownership), as a life estate, or as a leasehold interest. A fee simple deed is the broadest possible interest in real property which is limited only by government powers of eminent domain and the like. A life estate deed allows ownership of a property only for the duration of a person’s life , and when the person passes away ownership reverts back to another person or entity. A leasehold interest in a home allows a person to temporarily occupy a property that he or she does not own. Overall, property ownership laws in Florida are a little simpler than in some states. Yet, for even well educated individuals, the fact that property ownership is one of the largest purchases a person will make during his or her life, means that real estate is very important to understand on a basic level. Without this understanding individuals could make costly mistakes.

Newcomers to Florida Property Ownership

Florida recognizes several different ways for individuals to collectively own property. Each type of ownership has its own implications, especially in terms of liability and the passing of property at death.
Sole Ownership
The simplest way to own property is sole ownership. This form of ownership is self-explanatory: only one person has ownership rights to the property, such as their name being the only one on the deed.
Joint Tenancy
A joint tenancy occurs when two or more people or entities own a single piece of property. The most important aspect of this form of ownership is the right of survivorship. Upon the death of a joint tenant, his share of the property will pass to the surviving joint tenant(s).
Tenancy by the Entirety
Similar to joint tenancy, tenancy by the entirety also requires the joint owners to have the right of survivorship. Florida law requires that owners in a tenancy by the entirety be married to one another when the property is acquired and that the property be real property (land or building). Additional requirements are: Further, no partition suits will be allowed while the tenants are married. A partition suit is a legal action to force the sale of a property so that the proceeds can be divided among owners of the property. Without this remedy, the property cannot be disposed of except by the joint agreement of all owners. However, if one spouse files for divorce, a joint tenancy by entireties will terminate and the property will be governed by Florida’s general rules of partition. Importantly, creditors of only one spouse cannot reach real property held as tenancy by the entirety if the other spouse is not similarly liable on the debts.
Tenancy in Common
Tenancy in common is similar to joint tenancy, but instead of maintaining the right of survivorship, a tenant in common’s share of the property will be passed according to his estate plan upon his death. If the tenant dies with a will, his one half will be passed to the beneficiaries listed in his will. If the tenant dies without a will, his share will be passed to his heirs listed under Florida’s intestacy laws.

Different Ownership Types in Florida

An additional consideration to the ownership of Florida property is the Florida homestead exemption law. A Florida resident who occupies his or her home may be eligible to receive both a homestead tax exemption and homestead creditor protection.
The homestead tax exemption, pursuant to Florida Statute 196.031, is intended to exempt a portion of the property taxes owed by persons who reside in Florida. The homestead tax exemption amount is equal to $25,000.00; meaning that the first $25,000.00 in the assessed value of a home or condo is exempt from property taxation. Electing the homestead tax exemption will not only reduce the amount of property taxes on the owner’s homestead, but will also reduce the property taxes on other non-homestead agricultural or commercial real property owned by the owner. For instance, let’s assume that three brothers own several investment properties as tenants in common: 1) an oceanfront condo; 2) an office building; and 3) a farm. Each brother has no other property. If the eldest brother elects homestead for the oceanfront condo, the beneficial results of the homestead tax exemption will carry over to the other two properties, such that any Florida resident brother will receive the exemption for the other properties. This means they will save on property taxes for the condo, office building, and farm.
Ownership of property by a person or persons who reside in Florida as tenants in common, as opposed to owning the property as "joint tenants," does not affect the homestead tax exemption. Residency in Florida is governed by Florida Statute 196.015 and is defined as a "legal residence established by an individual or family unit with intent to remain there." An individual, to qualify as a resident, must demonstrate an intent to establish legal residence in Florida and maintain such residence indefinitely. Factors courts consider in determining residency include such things as: A person can lose their tax homestead exemption if they become a non-resident. A non-resident is defined as a person who does not establish legal residence in Florida with the intent to remain there for the indefinite future.
Homestead exemption laws in Florida also provide creditor protection mainly to individual owners who possess both the legal and beneficial interests in a homestead residence. The amount of creditor protection provided by homestead exemption laws is subject to limitations based on size and location, but the general idea behind such creditor protection is that creditors cannot force the sale of a homestead residence or resort to homestead property to satisfy a judgement or other debt incurred by the individual owner. Florida Statutes 4(b) and (f) provide that: Consequently, even though the value of a homestead residence may greatly exceed the limits set forth in Florida Statute section 4(b), as long as the homestead requirement is satisfied, the entire homestead is off-limits to the owner’s creditors.

Florida Homestead Exemption Legislation

The conveyance of property in Florida is usually accomplished by a deed or other legal mechanism which transfers the rights of ownership of real estate from the seller to the buyer. The critical role of a deed or other application form during the sale or transfer of real estate cannot be overstated as the document must state what rights are being transferred to the new owner, when the transfer occurs, and other pertinent information to the transaction. Most commonly, though not exclusively, residential transactions in the State of Florida convey ownership via warranty deed, quit claim deed, special warranty deed, or estate of inheritance deed. A warranty deed transfers ownership of real estate to the buyer and represents an assurance from the seller that they hold clear title to the property and can legally transfer ownership to a buyer. A quit claim deed does not provide such assurances, however, and only conveys whatever interest the seller has in the property. A special warranty deed conveys only that the seller held the title free and clear during the time that they owned the property, and that full disclosure was made by the seller as to any claims against the property. Finally, an estate of inheritance deed conveys full rights to the buyer and the pretense that such sale is free of all claims, such that the buyer has the same rights as the seller did and rights of the buyer cannot be challenged in the future due to issues not disclosed during the sale or transfer of the property.

Transferring Real Estate in Florida

The trifecta of ownership and responsibility for real property in Florida encompasses the right to full ownership and control of the property, the responsibility to maintain the property and adhere to zoning laws and development regulations, and the ability to use the property within the governing framework of rei porate laws and the general rules of fair use and enjoyment set forth by the courts. The rights of the entire bundle can be modified by agreement, such as through restrictive covenants, or by a government which grants the owner special privileges, or by a private third party which may have a vested interest in the property. Through the boggy waters of Florida law emerge the tangible rights that make each property owner autonomous and each community durable.
The responsibility of maintenance is twofold: first, keeping and maintaining the actual physical structure of the property, and second, maintaining the property’s various attributes. Florida law is generally silent on the first category of the right to , and responsibility for, the physical structures and fixtures on the property. Provisions not specifically relating to real property, such as the Florida Building Code, national electric and plumbing codes, and accessibility requirements, in addition to the various municipalities’ Building Departments, define the rules for construction, maintenance and condition of buildings, fixtures, and improvements. The second category includes the soils of the property, the flora and fauna of the property, and the fauna that may migrate to the property, as well as the chemical and composition of the water table, the groundwater and surface water. In Florida, these have long been private property interests, with express constitutional protections, and have created substantial litigation concerning water quantity and quality; endangered and threatened species; and, the environment. Both broad swaths of Florida law and local ordinances address the property owner’s approval and liability for all of these items.

Property Rights and Restrictions Under Florida Law

Despite the protections in the Florida Constitution and Florida statutes, property ownership will sometimes cause a dispute between owners, neighbors or other parties. In these circumstances, alternative dispute resolution (ADR) may provide an effective and efficient means of resolving a conflict.
There are several types of alternative dispute resolution mechanisms available in Florida, including mediation, conciliation, neutral evaluation and arbitration. These options can provide efficiencies that in some cases will make litigation unnecessary or at least shorten the litigation process.
If ADR is not appropriate or successful, litigation may be necessary. The filing of suit in court can get the dispute into binding arbitration, which may be the most efficient way to resolve the dispute. The parties may also have the opportunity to participate in a special court-approved program designed to facilitate case resolution or work with their attorneys to prepare for one or more matters that will be litigated.

Dispute Resolution & Lawyer Help

In conclusion, Florida Property Ownership Laws are extremely important and understanding them can often be complicated. When in doubt regarding the laws, it is oftentimes best to seek competent professional advice. Furthermore, prior to any determination regarding the ownership of any property , a title insurance company or attorney should be consulted as to who owns the property. Florida law provides the following presumption: The owner of record is presumed to be the owner. These presumptions are greatly important devising the nature and extent of the interest and/or amount of interest owned by one or more individuals. As alluded to above, when in doubt, seek the advice of an attorney.