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In the following article, one of our knowledgeable probate lawyers discusses Florida homestead law and probate property.
As the soft real estate market produces fewer closings and more foreclosures, determining the proper defendants to a foreclosure proceeding comes up more often. Generally, to be valid, a foreclosure lawsuit must serve, either personally or constructively, all owners of real estate. The issue is determining who owns real estate when the record owner is dead.
The answer in part depends on whether the real property was the homestead of the deceased. First, the Estate cannot own real estate in Florida. The Estate is property, and property cannot own real property. Ashmead v. Wilson, 22 Fla. 255, 1886 WL 1203 (Fla.). The personal representative, if one is appointed, is the person who must be served in order to sue the estate. Sec. 733.612 (20), F.S. However, if the property is homestead, the heirs must be determined and served, either personally or constructively. Thus, a foreclosure action against the personal representative is suing the wrong person for homestead property.
For non-homestead property, when a personal representative has been named by the court, and has not been removed or discharged, one would think that suing the personal representative alone would be sufficient. The logic of this argument is that since non-homestead property can be sold without the heirs joining in the sale, then title can be wrestled away in a foreclosure without joining the heirs.
However, the Florida Supreme Court held in Jones v. Federal Farm Mortgage Corporation, 132 Fla. 807, 182 So. 226 (1938), that the heirs must be joined as defendants in a foreclosure of non-homestead property. The Court's reasoning was that certain rights in the property are given to the heirs at the moment of death, subject to being taken back by the personal representative if necessary to pay the costs of administration, claims or taxes. Sec. 732.101, F.S., codifies this, stating that the deceased's death vests the heirs' right to the deceased's intestate property as of the moment of death, subject to being divested by the personal representative if sold.
If a Will has been admitted to probate, the heirs would be the persons to whom the real property in question was devised (the devisees). If not specifically devised, the real property is considered devised through the residuary clause of the will (the rest, remainder and residue). If there is no Will, the heirs are the intestate heirs.
A foreclosing party who knows or suspects that the record owner is dead often petitions the court to appoint an attorney/guardian/administrator ad litem to represent heirs who are unknown. In practice, many ad litem attorneys take a small flat fee, review the pleadings, attend a hearing or two, and consider their job done. Such half-hearted efforts leave the foreclosure judgment subject to being set aside. Batchin v. Barnet Bank, 647 So. 2d 211 (Fla. 2d DCA 1994). In Rodriguez v. Levin, 524 So. 2d 1107 (Fla. 3d DCA 1988), the Court held that the attorney ad litem had a duty to diligently search for the missing heirs, and his failure to do so resulted in the foreclosure judgment being void.
Isn't this a big hassle just to foreclose a mortgage? Well, yes, it is, but failure to carefully follow the law could result in a do-over of the entire foreclosure proceeding, at significant cost to the lender or to the title insurer paying to correct the title.
The attorneys at Statewide Probate are knowledgeable when it comes to Florida homestead law and probate property. We offer reasonable probate administration fees, which are often lower than the standard rate in the state. Don't spend more than you have to when dealing with homestead law and probate property. Schedule a free probate consultation today. We proudly serve clients in Miami, Pensacola, West Palm Beach, Fort Meyers, and throughout Florida.