What happens if a Florida deed or Florida Enhanced Life Estate Deed is signed but unrecorded?
Is the deed valid?
What risks are associated with unrecorded deeds?
Why would someone want to sign a deed but not record the deed in Florida?
A Florida Deed is not invalid just because it is not recorded. There is the potential for claims from other people if they record a deed before you record a deed. In Florida, when a deed is recorded there are taxes that must be paid on any outstanding mortgage. For every $1000 of mortgage a fee of $70 is charged. While this may not seem like much, if the loan is $100,000 the fee will be $700 and if the loan is $500,000 the fee is $3500. Often people want to transfer the ownership of their property but expect to pay off outstanding loans prior to their death. To save the fees, clients often ask about waiting to record the deed. We would generally advise against such actions as in Florida the first person to record a deed, who does not have notice of a prior deed, and who pays for the property will be considered the owner.
As people age, they may forget that they signed a prior deed, and sell the property to someone else. If that person records before you do, your claim or right to the property would be invalid. In addition, as people age, they are sometimes taken advantage of and do things against their will. Although there may be a claim for undue influence, these are very hard and expensive to prevail on.
Another potential problem could arise if your father’s estate plan distributes the real estate to someone other than you. If your dad’s will bequests the property to your sister and you go to record your deed, you might find yourself on the business end of a lawsuit involving the estate.
There is always a chance the rules relating to recording a deed change. The current sales disclosure form that must be filed with deeds needs to be signed by both parties.
Unrecorded deeds can be useful under certain limited conditions, such as death-bed planning. However, personally, I would generally be reluctant to advise using an unrecorded deed. When clients ask about them it is important to let them know the risks associated with them.
Each set of circumstances is unique and sometimes the use of an unrecorded deed in Florida is worth the risk. You should contact an Estate Planning Lawyer to review your needs and circumstances prior to executing an unrecorded deed.