SALE OF HOMESTEAD PROPERTY AND THE NEED FOR SPOUSAL JOINDER

Constitutional homestead of Florida property has been addressed in a previous article; however, there is now case law that mandates a closer look at your responsibility as a real estate agent with regard to contract negotiations and execution.

Under the Florida Constitution, a married person cannot convey title to his/her homestead without the joinder of the spouse in the Deed. For title underwriting considerations, both the owner and the spouse must execute the same Deed and not sign on two separate Deeds. The joinder requirement also exists in connection with the mortgaging of homestead property.  If a person is legally married (no Dissolution of Marriage has been entered by a Court), and he/she wants to convey or mortgage his/her homestead property, the spouse must sign on the deed or mortgage for purposes of waiving the homestead interest of the spouse.  The focus of this article is on conveying homestead property owned by only one spouse.

The spousal joinder requirement was the subject of a relatively recent Florida Case, Taylor v. Maness. In that case, the title to the marital residence (homestead) was vested solely in Mr. Maness’ name. Mr. Maness decided to sell the property and entered into a contract for the sale of the property. The contract reflected only Mr. Maness as the seller and the contract was not signed by his wife. Mrs. Maness refused to sign the deed transferring title of the property to the Taylors, claiming that she had a homestead interest in the property. The Taylors sued for specific performance of the contract, fraud in the inducement and negligent misrepresentation, based on the seller’s inability to sell the property. The trial court entered a summary judgment for the seller since there was no genuine issue of material fact relating to Mrs. Maness’ homestead interest and that the seller was entitled to judgment as a matter of law.

The Taylors appealed the decision to the Third District Court of Appeals. The Taylors argued that because the Manasses failed to claim a homestead tax exemption, it evidences that the property was not the Manesses’ homestead. The Court confirmed that failure to claim the homestead tax exemption is not evidence that property is not homestead property. There is a significant distinction between homestead for tax purposes and the Constitutional protection pertaining to homestead property. The Court reasoned that the Taylors could not specifically enforce the contract since Mrs. Manass did not sign the contract and could not be compelled to waive her homestead rights.

Also of interest in the case is the Court’s ruling that the Taylors were not entitled to damages for fraud in the inducement and negligent misrepresentation. The Court held that Mr. Manass did not misrepresent his ownership of the property and accordingly, there was no misrepresentation and no failure in the inducement. In essence, the Taylors had no remedy.

This case underscores the importance of ascertaining whether the property is the homestead of the seller whenever the seller is married and title is held in the name of only one spouse. It is critical that the seller’s spouse join in the execution of the contract for sale of the property. Otherwise, the buyer may find himself in the same position as the Taylors without any legal remedy. If, for example, title to the property is in the name of the husband, the correct seller on the contract would be “John Smith, joined by his wife, Jane Smith” and the contract and all addendums should be signed by both spouses.