INSTRUMENTS DEEMED MORTGAGES AND THE NATURE OF A MORTGAGE

F.S. Ch. 697
in effect

F.S. 697.01 Instruments deemed mortgages.

(1) All conveyances, obligations conditioned or defeasible, bills of sale or other instruments of writing conveying or selling property, either real or personal, for the purpose or with the intention of securing the payment of money, whether such instrument be from the debtor to the creditor or from the debtor to some third person in trust for the creditor, shall be deemed and held mortgages, and shall be subject to the same rules of foreclosure and to the same regulations, restraints and forms as are prescribed in relation to mortgages. (2) Provided, however, that no such conveyance shall be deemed or held to be a mortgage, as against a bona fide purchaser or mortgagee, for value without notice, holding under the grantee.

F.S. 697.02 Nature of a mortgage.

A mortgage shall be held to be a specific lien on the property therein described, and not a conveyance of the legal title or of the right of possession.

F.S. 697.03 Cooperative association mortgages.

(1) Hereafter, any mortgage or other instrument given by a cooperative association for the purpose of creating a lien on real or personal property, or both, may secure not only existing indebtedness, but also such future advances, whether obligatory or otherwise, as are made within 10 years from the date thereof. Such lien, as to third persons without actual notice thereof, shall be valid as to all such indebtedness and future advances from the time the mortgage or other instrument is filed for record as provided by law. The total amount of indebtedness that may be so secured may decrease or increase from time to time, but the total unpaid balance so secured at any one time shall not exceed a maximum principal amount which must be specified therein, plus interest thereon, and any disbursements made for the payment of taxes, levies, or insurance on the property covered by the lien, with interest on such disbursements. (2) A “cooperative association” within the meaning of this section means any corporation formed, reorganized or brought under any general or special law of this or any other state as a cooperative association. (3)(a) A mortgage executed by a cooperative association may cover and create a valid mortgage lien upon stocks or inventories of farm supplies and processed agricultural products, which stocks and inventories the mortgagor may be permitted to retain in possession and sell in the usual course of business. The lien of such mortgage shall be lost on such of the mortgaged property as is sold in the usual course of business up to the time a receiver, who shall be appointed as a matter of right upon application of the mortgagee by the court having jurisdiction of a proceeding instituted to foreclose said mortgage, shall have taken possession of the mortgaged property, and shall without further act, writing or formality attach to any proceeds of the sale thereof, including but not limited to accounts receivable arising from sale of the mortgaged property, but a purchaser of mortgaged property from any such mortgagor, not having actual notice of the attaching of such lien to said proceeds, shall not be liable for any payments made to the person who, except for the provisions of this subsection, would be entitled thereto; provided, however, that such lien as to said accounts receivable shall be subject and subordinate to assignments of any such accounts receivable which are protected assignments under the provisions of chapter 679. If so provided in the mortgage, the lien thereof shall, in addition to the stocks and inventories originally mortgaged, attach to farm supplies and processed agricultural products acquired after the execution and delivery of such mortgage. (b) If so stipulated therein, such mortgage may secure not only existing indebtedness of the mortgagor to the mortgagee but also such future advances, whether obligatory or otherwise, as are made by the mortgagee to the mortgagor within 10 years from the date of such mortgage to the same extent as if such future advances were made on the date of the execution of such mortgage although there may be no advance made at the time of the execution of such mortgage and although there may be no indebtedness outstanding at the time any advance is made. Such lien shall be valid as to all such indebtednesses and future advances from the time the mortgage is filed for record as provided by law whether such stocks and inventories shall be in existence at the time of the execution of the mortgage or at the time of filing such mortgage for record or shall come into existence subsequent thereto or shall be subsequently acquired by the mortgagor. (c) The total amount of the indebtedness that may be so secured may decrease or increase from time to time but the total unpaid balance so secured at the time shall not exceed a maximum principal amount which must be specified in such mortgage, plus interest thereon, together with costs and attorney’s fees, and any disbursements made for the payment of taxes, levies, assessments, or insurance on the property covered by the mortgage, with interest on such disbursements. (d) Such mortgage shall not be invalid or fraudulent against creditors because the mortgagor is permitted to retain in possession and sell the mortgaged property in the usual course of business or by reason of liberty in the mortgagor to use, commingle, or dispose of any such stocks or inventories or the proceeds of the sale of such stocks or inventories or by reason of the failure of the mortgagee to require the mortgagor to account for such proceeds or to replace mortgaged property. (e) The provisions of this subsection shall not be construed as impairing, limiting, or otherwise affecting the rights of a lender to, or other creditor of a mortgagor of such farm supplies or processed agricultural products, to deal with and make loans to such mortgagor upon the security of assignments of accounts receivable arising or to arise on account of the sale by the mortgagor of the mortgaged property. (f) This subsection shall not apply to any mortgages made on or after the effective date in this state of the Uniform Commercial Code.

F.S. 697.04 Future advances may be secured.

(1)(a) Any mortgage or other instrument given for the purpose of creating a lien on real property, or on any interest in a leasehold upon real property, may, and when so expressed therein shall, secure not only existing indebtedness, but also such future advances, whether such advances are obligatory or to be made at the option of the lender, or otherwise, as are made within 20 years from the date thereof, to the same extent as if such future advances were made on the date of the execution of such mortgage or other instrument, although there may be no advance made at the time of the execution of such mortgage or other instrument and although there may be no indebtedness outstanding at the time any advance is made. Such lien, as to third persons without actual notice thereof, shall be valid as to all such indebtedness and future advances from the time the mortgage or other instrument is filed for record as provided by law. (b) The total amount of indebtedness that may be so secured may decrease or increase from time to time, but the total unpaid balance so secured at any one time shall not exceed a maximum principal amount which must be specified in such mortgage or other instrument, plus interest thereon; except that the mortgagor or her or his successor in title is authorized to file for record a notice limiting the maximum principal amount that may be so secured to an amount not less than the amount actually advanced at the time of such filing, provided a copy of such filing is also sent by certified mail to the mortgagee and, in the case of an open-end or revolving credit agreement, the mortgagor surrenders to the mortgagee all credit cards, checks, or other devices used to obtain further advances at the time of filing the notice, which notice shall be recorded and shall be effective from the date of filing. Notwithstanding the foregoing, any increase in the principal balance as a result of negative amortization or deferred interest shall be secured by the mortgage; and any disbursements made for the payment of taxes, levies, or insurance on the property covered by the lien, and any advances or disbursements made under a construction loan agreement referred to in a mortgage to enable completion of the contemplated improvement, with interest on such advances or disbursements, are secured by the mortgage or other instrument even though the mortgage or other instrument does not provide for future advances, or the advances or disbursements cause the total indebtedness to exceed the face amount stated in the instrument. This subsection does not apply to any mortgages, shipping contracts, or other instruments made and given by naval stores operators and producers to secure existing loans and future advances by naval stores factors. (2) As against the rights of creditors or subsequent purchasers for a valuable consideration, actual notice or record notice of advances to be made at the option of the lender, under the terms of such mortgage or other instrument, shall be valid only as to such advances as are to be made within 20 years from the date of such mortgage or other instrument; however, this subsection does not apply to any mortgages, shipping contracts, or other instruments made and given by naval stores operators and producers to secure existing loans and future advances by naval stores factors. Notwithstanding anything in this section to the contrary, future advances made pursuant to the terms of a reverse mortgage loan (as defined in s. 103(bb) of the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.) shall be secured to the same extent as if such future advances were made on the date of execution of the mortgage, irrespective of the date of any such advance. (3) Any such mortgage or other instrument shall be prior in dignity to all subsequent encumbrances, including statutory liens, except landlords’ liens.

F.S. 697.05 Balloon mortgages; scope of law; definition; requirements as to contents; penalties for violations; exemptions.

(1) Any conveyance, obligation conditioned or defeasible, bill of sale, or other instrument of writing conveying or selling real property for the purpose or with the intention of securing the payment of money, whether such instrument is from the debtor to the creditor or from the debtor to some third person in trust for the creditor, shall be deemed and held to be a mortgage and shall be subject to the provisions of this section. (2)(a)1. Every mortgage in which the final payment or the principal balance due and payable upon maturity is greater than twice the amount of the regular monthly or periodic payment of the mortgage shall be deemed a balloon mortgage; and, except as provided in subparagraph 2., there shall be printed or clearly stamped on such mortgage a legend in substantially the following form: THIS IS A BALLOON MORTGAGE AND THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY IS $ , TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THIS MORTGAGE. 2. In the case of any balloon mortgage securing the payment of an obligation the rate of interest on which is variable or is to be adjusted or renegotiated periodically, where the principal balance due on maturity cannot be calculated with any certainty: a. The principal balance due upon maturity shall be calculated on the assumption that the initial rate of interest will apply for the entire term of the mortgage; b. The legend shall disclose that the stated principal balance due upon maturity is an approximate amount based on such assumption; and c. A legend in substantially the following form suffices to comply with the requirements of this section: THIS IS A BALLOON MORTGAGE SECURING A VARIABLE (adjustable; renegotiable) RATE OBLIGATION. ASSUMING THAT THE INITIAL RATE OF INTEREST WERE TO APPLY FOR THE ENTIRE TERM OF THE MORTGAGE, THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY WOULD BE APPROXIMATELY $ , TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THIS MORTGAGE. THE ACTUAL BALANCE DUE UPON MATURITY MAY VARY DEPENDING ON CHANGES IN THE RATE OF INTEREST. (b) This legend, including the principal balance due upon maturity, shall appear at the top of the first page or face sheet of the mortgage and also shall appear immediately above the place for signature of the mortgagor. The legend shall be conspicuously printed or stamped. (3) Failure of a mortgagee or creditor or a third party in trust for a mortgagee or creditor to comply with the provisions of this section shall automatically extend the maturity date of such mortgage in the following manner: The mortgagor shall continue to make monthly or periodic payments until the principal and interest which has accrued prior to the time of the balloon payment of the mortgage is paid in full, and the maturity date shall be automatically extended to the date upon which said payments would cause the mortgage debt to be paid in full assuming such payments are made when due upon such monthly or periodic schedule. The mortgagor shall be entitled to prepay the mortgage without penalty during the extension period. (4) This section does not apply to the following: (a) Any mortgage in effect prior to January 1, 1960; (b) Any first mortgage, excluding a mortgage in favor of a home improvement contractor defined in s. 520.61(13) the execution of which is required solely by the terms of a home improvement contract which is governed by the provisions of ss. 520.60-520.98; (c) Any mortgage created for a term of 5 years or more, excluding a mortgage in favor of a home improvement contractor defined in s. 520.61(13) the execution of which is required solely by the terms of a home improvement contract which is governed by the provisions of ss. 520.60-520.98; (d) Any mortgage, the periodic payments on which are to consist of interest payments only, with the entire original principal sum to be payable upon maturity; (e) Any mortgage securing an extension of credit in excess of $500,000; (f) Any mortgage granted in a transaction covered by the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq., in which each mortgagor thereunder is furnished a Truth in Lending Disclosure Statement that satisfies the requirements of the federal Truth in Lending Act; or (g) Any mortgage granted by a purchaser to a seller pursuant to a written agreement to buy and sell real property which provides that the final payment of said mortgage debt will exceed the periodic payments thereon.

F.S. 697.06 Prepayment of note.

Any note which is silent as to the right of the obligor to prepay the note in advance of the stated maturity date may be prepaid in full by the obligor or her or his successor in interest without penalty.

F.S. 697.07 Assignment of rents.

(1) For purposes of this section, the term: (a) “Mortgagee” means a person entitled to enforce an obligation secured by a mortgage. (b) “Mortgagor” means a person who grants a mortgage or a successor in ownership of the real property described in the mortgage. (2) A mortgage or separate instrument may provide for an assignment of rents of real property or any interest therein as security for repayment of an indebtedness. (3) If such an assignment is made, the mortgagee shall hold a lien on the rents, and the lien created by the assignment shall be perfected and effective against the mortgagor and third parties upon recordation of the mortgage or separate instrument in the public records of the county in which the real property is located, according to law. (4) Unless otherwise agreed to in writing by the mortgagee and mortgagor, the lien created by the assignment of rents is enforceable upon the mortgagor’s default and written demand for the rents made by the mortgagee to the mortgagor, whereupon the mortgagor shall turn over all rents in the possession or control of the mortgagor at the time of the written demand or collected thereafter (the “collected rents”) to the mortgagee less payment of any expenses authorized by the mortgagee in writing. (5) Upon application by the mortgagee or mortgagor, in a foreclosure action, and notwithstanding any asserted defenses or counterclaims of the mortgagor, a court of competent jurisdiction, pending final adjudication of any action, may require the mortgagor to deposit the collected rents into the registry of the court, or in such other depository as the court may designate. However, the court may authorize the use of the collected rents, before deposit into the registry of the court or other depository, to: (a) Pay the reasonable expenses solely to protect, preserve, and operate the real property, including, without limitation, real estate taxes, insurance, and assessments that become due after the entry of the court’s order to a homeowners’ association or an association, as those terms are defined in s. 720.301, or a corporation regulated under chapter 718 or chapter 719; (b) Escrow sums required by the mortgagee or separate assignment of rents instrument; and (c) Make payments to the mortgagee. The court shall require the mortgagor to account to the court and the mortgagee for the receipt and use of the collected rents and may also impose other conditions on the mortgagor’s use of the collected rents. (6) Nothing herein shall preclude the court from granting any other appropriate relief regarding the collected rents pending final adjudication of the action. The undisbursed collected rents remaining in the possession of the mortgagor or in the registry of the court, or in such other depository as ordered by the court, shall be disbursed at the conclusion of the action in accordance with the court’s final judgment or decree. (7) The court shall expedite the hearing on the application by the mortgagee or mortgagor to enforce the assignment of rents. The procedures authorized by this statute are in addition to any other rights or remedies of the mortgagee or mortgagor under the mortgage, separate assignment of rents instrument, promissory note, at law, or in equity. (8) Nothing herein shall alter the lien priorities, rights, or interests among mortgagees or other lienholders or alter the rights of the mortgagee under the mortgage, separate assignment of rents instrument, at law or in equity, concerning rents collected before the written demand by the mortgagee. A mortgagee’s enforcement of its assignment of rents under this statute shall not operate to transfer title to any rents not received by the mortgagee. (9) Any moneys received by the mortgagee pursuant to this statute shall be applied by the mortgagee in accordance with the mortgage, separate assignment of rents instrument, or promissory note, and the mortgagee shall account to the mortgagor for such application. (10) This section does not apply to a corporation that is a homeowners’ association or an association, as those terms are defined in s. 720.301, or a corporation regulated under chapter 718 or chapter 719, that: (a) Acquires title to a parcel or unit through the foreclosure of its claim of lien, or a deed in lieu of foreclosure, provided that title remains vested in the association or corporation and any rents collected are applied to assessments that are then due; or (b) Collects rents from tenants in a parcel or unit pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8).

F.S. 697.08 Equity skimming.

(1) It is unlawful for any person, with intent to defraud the owner of real property, to engage in equity skimming, which is, to: (a) Purchase, within a 3-year period, two or more single-family dwellings, two-family dwellings, three-family dwellings, or four-family dwellings, or a combination thereof, that are subject to a loan that is in default at the time of purchase or within 1 year after the time of purchase, which loan is secured by a mortgage or deed of trust; (b) Fail to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan; and (c) Apply, or authorize the application of, rents from such dwellings for the person’s own use. (2) A violation of subsection (1) constitutes a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

F.S. 697.10 Liability for error in mortgage deed or note.

In any action relating to real property, if the court shall find that any person has prepared an instrument which due to an inaccurate or improper legal description impairs another person’s title to real property, the court may award to the prevailing party all costs incurred by her or him in such action, including reasonable attorney’s fees, and in addition thereto may award to the prevailing party all actual damages that she or he may have sustained as a result of such impairment of title.
Source: FL Statutes (Official Site)URL: https://www.flsenate.gov/Laws/Statutes/2025/Chapter697/AllFetched: 7/8/2026