Judge John: Observations on laws that affect living at the Beaches – castles in the sand

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Our home is our castle. Nothing more particularly defines us as beach people than our homes on our special island. Depending on what part of the beach you live in, there are different sets of ordinances and perhaps rules and regulations which apply to your home.

 Home ownership is the cornerstone of the American Dream.  When our country was first formed, we were the first nation in the world to allow for homeownership by common people. This was part of the foundation of our country. In order to acquire a home, one must go through a closing.  Like having a look at the man behind the curtain in Oz, this article will reveal the backstory behind closings.

The closing will be different depending on in what office you sign the documents to buy or sell your home.  The law firm/title company is in charge of providing good title and of taking care of the parties, the Realtors and the lenders, among others. Communication is the key component to a successful and trouble- free closing experience.

 Lots goes on before the date of closing and behind the scenes to assure a smooth closing. By the time you get to
closing, the attorney has performed a review of the chain of title report and removed all encumbrances to title. This is done so that the seller transfers and the buyer receives fee simple, or clear title.  The party who is paying for the title insurance gets to choose where to close. In our area, that is usually the seller.

 The closing attorney, working with processors and closers, collaborates with the owner, the buyer, the Realtors, lenders, association managers, title underwriter and potentially other parties in order to coordinate the closing. Each participant likely has a different priority. The seller is interested in properly transferring title, and in receiving payment from the sale.  The buyer is interested in receiving clear title, the keys to the new home, and in leaving the closing in time to meet the movers in the driveway. The Realtors’ interest is to be sure that the contract that they have produced is closed properly, that the parties are satisfied, that their commission checks are dispersed properly, and often, in non-pandemic times, Realtors attend closings. 

 The lender’s interest at the closing is to be sure that they are in a first mortgage position, and that all of their loan documents are signed correctly.  Having collateralized the repayment of the loan they’re making, that means that in addition to the note under which the buyer borrows the money, a mortgage is properly executed and will be subsequently recorded, which remains a lien against the property until that note is paid back in full.  The attorney has a fiduciary responsibility to the lender to make sure that the lien is perfected in exchange for the lender providing the money for the buyer to purchase the property.

 The attorney may wear several hats.  The attorney may be representing one of the parties, and is acting as escrow agent, meaning the attorney must account for receiving all the funds of the transaction, and disbursing them properly. The attorney is likely the title agent. In some instances, there may need to be an escrow for such things as repairs; the attorney can create the escrow agreement, and act as an escrow agent for those funds. The attorney must explain the legal import of each of the documents being signed and is there to answer questions that the buyers and sellers might have about the obligations.

 Judge John highly recommends above all of the things that parties use a law firm or title company that has an attorney on board because attorneys are trained in the law of real property, and make sure that the transaction goes smoothly and legally.

Conclusion: Educate yourself before buying or selling a home in the Jacksonville Beaches area. Why?

  1. Beach living is the best.
  2. An attorney should handle your closing to be sure that the transaction is managed properly, and you are protected.
  3. With a properly conducted closing, all of the parties come out winners.

  John Miller is the Special Magistrate for the City of Neptune Beach.  His law firm, Rock Solid Law, focuses on Estate Planning, Real Estate Closings and Title, and representing entrepreneurial small Business Owners.  (904) 241-1113

Do you have any questions of law or custom that are of particular interest to those living the Sand Life on our beautiful island?  Please submit them to Judge John for consideration for a future article.  john@rocksolidlaw.com

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