10 Sep Florida Legislative Update
The Florida legislature recently amended its laws governing mortgage lenders and mortgage brokers, and also enacted provisions governing the unlawful filing of false documents or records against real or personal property. Both bills are effective October 1, 2013.
FLORIDA HOUSE BILL 665
The Office of Financial Regulation may deny (previously will not issue) a mortgage lender license or a mortgage broker license if the applicant has had a mortgage lender license or a mortgage broker license or its equivalent revoked in any jurisdiction and must deny a mortgage lender license or a mortgage broker license if any of the applicant’s control persons has had a loan originator license or its equivalent revoked in any jurisdiction.
FLORIDA SENATE BILL 112
“File” means to present an instrument for recording in an official record or to cause an instrument to be presented for recording in an official record.
“Instrument” means any judgment, mortgage, assignment, pledge, lien, financing statement, encumbrance, deed, lease, bill of sale, agreement, mortgage, notice of claim of lien, notice of levy, promissory note, mortgage note, release, partial release or satisfaction of any of the foregoing, or any other document that relates to or attempts to restrict the ownership, transfer, or encumbrance of or claim against real or personal property, or any interest in real or personal property.
A person who files or directs a filer to file, with the intent to defraud or harass another, any instrument containing a materially false, fictitious, or fraudulent statement or representation that purports to affect an owner’s interest in the property described in the instrument commits a felony of the third degree. A person who commits such violation a second or subsequent time commits a felony of the second degree.
If a person is convicted of such violation and the owner of the property covered by the false instrument incurs financial loss as a result of the instrument being recorded in the official record, including costs and attorney fees incurred in correcting, sealing, or removing the false instrument from the official record, the offense will be reclassified as follows:
- In the case of a felony of the third degree, to a felony of the second degree; and
- In the case of a felony of the second degree, to a felony of the first degree.
A person who fraudulently records a claim of lien is subject to the provisions regarding remedies in case of fraud or collusion and not the provisions above.
If a person is convicted of the violation above, the sentencing court will issue an order declaring the instrument forming the basis of the conviction null and void and may enjoin the person from filing any instrument in an official record absent prior review and approval for filing by a circuit or county court judge. The sentencing court may also order the instrument forming the basis of the conviction sealed from the official record and removed from any applicable electronic database used for recording instruments in the official record.
Any person adversely affected by an instrument filed in the official record which contains a materially false, fictitious, or fraudulent statement or representation has a civil cause of action regardless of whether criminal charges are pursued. A notice of lis pendens must be filed which specifically describes the instrument under challenge and the real or personal property affected by the instrument.
Upon a finding that the instrument contains a materially false, fictitious, or fraudulent statement or representation such that the instrument does not establish a legitimate property or lien interest in favor of another person:
- The court will determine whether the entire instrument or certain parts of it are null and void. If the court finds the instrument void in its entirety, it may order the instrument sealed from the official record and removed from any electronic database used for indexing or locating instruments in the official record. The court may also, permanently or for a period of time, enjoin the defendant who filed the instrument or who directed the filer to file the instrument from filing or directing a person to file an instrument in the official records without prior review and approval for filing by a circuit or county court judge, provided that as to third parties who may have given value for an interest described or granted by any instrument filed in violation of the injunction, the instrument will be considered to be validly filed and provides constructive notice, despite any failure to comply with the terms of the injunction;
- Upon a finding of intent to defraud or harass, the court or jury will award actual damages and punitive damages to the person adversely affected by the instrument. The court may also levy a civil penalty of $2,500 for each instrument determined to violate the provisions above; and
- The court may grant such other relief or remedy that the court determines is just and proper within its sound judicial discretion.
The prevailing party is entitled to recover costs and reasonable attorney fees.
The custodian of any official record must, upon payment of appropriate fees, provide a certified copy of the sealed instrument to the party seeking relief for use in subsequent court proceedings, in addressing or correcting adverse effects upon the person’s credit or property rights, or reporting the matter for investigation and prosecution, or in response to a subpoena seeking the instrument for criminal investigative or prosecution purposes.
Upon request, the custodian of any official record must, upon payment of appropriate fees, provide a certified copy of the sealed instrument to any federal, state, or local law enforcement agency. If feasible, the custodian of the official record where the instrument is recorded must record any court order finding that the instrument is null and void in its entirety or in certain parts of it.
An instrument removed from an electronic database used for recording instruments in the public record must be maintained in a manner in which the instrument can be reduced to paper form.