What Are Mortgage Witnesses in Florida?
Mortgage witnesses are meant to prevent fraud. A person cannot later claim that they did not sign the mortgage. A witness makes it more difficult to commit fraud. A Florida statutory presumption created by section 695.03(1), Fla. Stat. ("When the execution of any deed . . . is executed and signed by two subscribing witnesses, such execution shall be presumed valid.") is a powerful tool in enforcing a mortgage or deed. The Legislature granted a presumption of validity when two witnesses sign a mortgage. This changed well established common law. Traditionally, the mere presence of a witness was not enough. The witness had to attest to the signature. The judge noted:
"Attesting witnesses have traditionally been required to grant validity to deeds under seal. ‘Attestation’ is defined as "'[t]he act of a third person who witnesses a testator’s or grantor’s execution of an instrument and signs it as witness at the request of the testator or grantor.’" Black’s Law Dictionary 143 (9th ed. 2009) (citing Restatement (Second) of Property § 3.2 cmt. a (1976)). However , the attesting witness requirement has been strictly applied in Florida. See, e.g., McGinty v. First Nat’l Bank of Ocala, 465 So.2d 564, 566 (Fla. 5th DCA 1985)(holding that an attesting witness requirement "seeks to prevent exactly this type of situation . . . [and] compliance with the statute is obligatory"). We have previously held that witnesses can satisfy the requirement under section 695.03(1) by signing the instrument at the request of the grantor, and for the purpose of authentication. See Green v. McClure, 454 So.2d 695, 696 (Fla. 1990).
Fredman v. Biltmore Tennis & Racquet Club, 897 So. 2d 543, 548 (Fla. 3d DCA 2005)(emphasis added).
Florida law does not require a mortgage to be witnessed. However, if one is executed with witnesses, and it is signed in the presence of the witnesses, then the mortgage will be presumed.
Witness Requirements for Mortgages
In Florida, mortgage witnesses must adhere to certain legal requirements. According to Florida Statutes Section 689.01, it can be a general or special witness. The only requirement is that the witness be either personally known to the notary or provide an adequate, valid form of proof of his or her identity. This can take many forms, including these statutorily defined ways: Here, three things are required of a witness: It’s important to note that if a document is executed in Florida but out of the presence of a notary, the witness requirement is slightly more stringent. (But not by much.) When a document is executed out of the presence of the notary, the witness must either know the signer or provide a fully executed identification card. In this case, the requirements are as follows: Essentially, a witness must provide a fully executed card to be of use. An original card, a photocopy or a facsimile transmission (fax) will not be sufficient, as these all represent copies of the original, not the original itself.
The Importance of Mortgage Witnesses
Witnesses play a crucial role in Florida mortgage transactions, primarily because they serve as an added layer of verification and protection for all parties involved. The presence of witnesses provides validation that the transaction is legitimate and was carried out in the correct manner, offering a safeguard against challenges to the authenticity of the mortgage or the actions of any of the entities involved. In particular, having witnesses present at the closing of the mortgage allows for applicants to approve the transaction and its terms in a formal atmosphere. This can prevent later issues involving challenges to the validity of the mortgage, as a witness can attest that the applicant was duly authorized to enter into the transaction.
Having witnesses also helps to reduce the risk of mortgage fraud. While most mortgage lenders are legitimate institutions that complete real transactions, there have been times when fraudulent "straw" closings were held, meaning entities or individuals intentionally went through with illegitimate mortgage transactions where they were not authorized to act on behalf of either the buyer or seller. Witnesses help ensure the proper authenticity of the transaction itself, which protects buyers, sellers and lenders alike.
Common Pitfalls in Meeting Mortgage Witness Requirements
The execution of a mortgage or deed is often accomplished in the presence of a notary public, who acts as an impartial witness to the signing. However, section 689.01, Florida Statutes, specifically states that the "witness by whom the execution [of any deed or mortgage] is legally effected" need not be a notary public, nor need any other particular person perform the function. The more common practice, however, is for the notary public to act as a witness at the time of execution of the mortgage, and simply notarize the signatures afterwards, thereby completing the execution in a single step.
One common mistake that occurs is to interpret the requirement to mean that the witnesses must sign the mortgage in front of the same notary public. This is not necessarily the case, particularly in multi-signature mortgages. In the case of multiple signers, the witnesses to each signer’s signature need not be the same, so long as there are two witnesses to all of the signatures combined.
Of course, it is best to avoid potential complications by having only one notary public act as a witness for all of the signatures. Moreover, that notary public can fulfill the requirement in one step: the notary can witness all of the signatures, then notarize the signatures after the execution of the mortgage. However, as discussed above, duplication of the act is not necessarily fatal to the validity of the mortgage.
A second, more fundamental mistake is simply failing to use any witnesses. A Florida statute dating back more than 100 years (originally passed in 1901) declares that unless a witness is utilized, the mortgage is void. See section 689.01(2), Fla. Stat. Thus, while a failure to meet the "two witness" requirement of the mortgage itself will not render the mortgage invalid, it certainly doesn’t do anything to improve its validity!
There are a few additional pitfalls that arise when the use of witnesses for a mortgage is required. First, witnesses are not allowed to re-sign the mortgage. In other words, witness signatures cannot be added to the mortgage after the document has already been executed. Second, the mortgage cannot be executed in counterpart with the witness’s signature appearing on the signature page of one mortgage, and the signatures of the mortgagor on the counterpart with the witness’s signature appearing on the signature page of the second mortgage. Section 689.01(3), Fla. Stat., provides that "no instrument [granting or assigning any … mortgage], signed in several parts or upon several papers, shall be valid for any purpose." Thus, the mortgage needs to be contained in one document, and if there are more than one witness, both witnesses’ names must be on the same page of the mortgage with the mortgagor.
The Dangers of Insufficient Witnessing
Failure to meet the witnessing requirements can lead to a loss of priority over an intervening lien. Florida Statutes § 702.08(1) provides that any mortgage executed with less than two witnesses is "ineffective to convey the estate intended to be conveyed." While Florida courts have addressed mortgages and deeds with witness defects, the case law is sparse and distinctions exist as to the significance of the witness issue. The central issue in the case law is whether the lack of witnesses was a curable defect or fatal to the mortgage’s enforceability against creditors and bona fide purchasers. In Payton v. Ewing, 382 So. 2d 1205 (Fla. 5th D.C.A. 1980), the court said noncompliance with Florida Statutes Chapter 695 can be cured by ratification, while in Guilday v. Coutts, 405 So. 2d 217 (Fla. 4th D.C.A. 1981), the court said defects are fatal. The Guilday court noted that mortgages which contain curable defects may be given priority over intervening lien holders. One of the arithmetical functions of a mortgage is to convey ‘the estate intended to be conveyed.’ If this failure to comply with Section 695.03 is [sic] construed to effect a conveyance of the estate intended to be conveyed, then it implies that the execution of the mortgage prior to the reference to and separation from the notary public constitutes a conveyance of the land encumbered by the mortgage . Any creditor from outside the chain of title could rely on the validity of the mortgage. On the other hand, if the mortgage is considered to be a curable defect, then the statute can be complied with and all subsequent claimants or creditors, acting with the usual diligence, would be put on notice of its existence. This would mean that a creditor would not rely upon the mortgage as a conveyance until the defect was cured. Thus, a creditor from outside the chain of title could not rely upon the validity of the mortgage until the execution conformed to Section 695.03. As a result of this construction of the statute, any execution of a mortgage outside the presence of the mortgagor’s signature would be critical in determining the priority of intervening lien claims. (Id.) In Guilday, the court distinguished between "curable defects" and "fatal defects." A mortgage deed with less than two witnesses is, generally at least, a curable defect. It is not a fatal defect to the title of the mortgage deed itself. Although mortgage deeds which contain curable defects have been held to be superior to intervening lien holders, the present defect is fatal. While there are numerous other decisions holding that Florida Statutes Chapter 695 is a part of the common law, and that noncompliance with Florida Statutes Chapter 695 will render a deed or mortgage voidable, no case has held that noncompliance will render a deed or mortgage void. (Id.)
How to Make Sure You’re Meeting Witness Requirements
A practical approach to ensuring compliance with these requirements involves the following steps:
- Follow the language used in the Florida Statutes as closely as possible in loan closing documents. When completing a blank form, check the requirements for blanks, which can typically be found in the instructions at the end of the form.
- Ensure that the dated signature of the witness appears below the notary public’s signature on the mortgage/AOD. Since the mortgage/AOD is not itself under seal, the notary must affix a notarial seal to it in order to ensure that it is duly attested, even if the mortgage does not specifically require such a seal.
- This particular solution has not been tested, but since notaries public in Florida are required to maintain journals, and such a journal contains specific information that could be used to later reconstruct the transaction in a way that fulfills the witness requirement, it is recommended that notaries public maintain a journal for each transaction. As soon as reasonably practicable following a transaction, the notary should make an entry in his or her journal that includes the full name and address of each witness, the type of document that was being executed, the date, and the names and addresses of the mortgagor(s).
- When a transaction is postponed or canceled, notaries should make an entry in his or her journal indicating the same, including the names and addresses of the intended mortgagors.
While it is perhaps overly formalistic to require the such a detailed approach, in light of these recent changes the need to follow the statutory language closely is compelling. Further, it is important to ensure good transaction documentation because this may be a specific requirement of the purchaser/lender.
Updates and Recent Changes to Witness Requirements
Changes to the witness requirements have been sparse in Florida and in the entire United States. In October 2015, the Federal Housing Finance Agency (FHFA) introduced Flex Mod Standard Mortgage Note, which provides a new note with a witness requirement specifically for Fannie Mae and Freddie Mac loans. Florida currently does not have a law requiring witnesses and this added step is optional. Lenders may use this note if they wish.
In 2018, the Florida Legislature ratified House Bill 325, which prohibits lenders from requiring borrowers to sign a mortgage/indemnity agreement in the absence of a witness. What this means for lenders and for borrowers is that if a borrower enters into a loan or mortgage/indemnity agreement without a witness specially required by statute, a lender can’t later come back and deny enforcement of the agreement based on that fact. Florida Statute § 689.17 now reads:
§ 689.17. Effect of absence of witness on interest in real property
- (1) If the conveyance of any interest in real property or a deed to secure debt or an agreement to convey any interest in real property is not subscribed by two subscribing witnesses as required by applicable statutory and common law, the lack of subscribing witnesses does not affect the enforceability or validity of the grant. This section does not apply to conveyances governed by s. 689.01.
- (2) This section does not limit the application of ss. 689.25 , 689.26, 689.27, 689.28, 689.29, 689.30, 689.31, and 689.32 or any other provision of law that requires a subscribing witness as a condition to the recording of a document.
- (3) This section shall not be construed to require a subscribing witness when another section of the Florida Statutes requires a subscribing witness such that failure to include the subscribing witness makes an executed deed to secure debt inadequate for recording.
This is in line with most of the other states in the country, allowing for enforcement of mortgage loans and agreements without the necessity of having witnesses.
The question of whether a failure to provide witness when one was required at the time of signing was raised in the case of Gomez v. Quicken Loans, LLC, 247 So. 3d 222 (Fla. 3rd DCA 2018). The Florida Third District Court of Appeal, in this unpublished opinion, ruled that the proper time for determining whether a witness was required on a mortgage was at the time the mortgage was signed. The loan at issue in this case was entered into on January 19, 2006. In 2015, the lender realized that it did not have a copy of the original loan documents with a witness and moved to have the mortgage reformed to add a witness to the notarized signature. The court held that changing the witness requirement regarding mortgages retroactively to 2006 would violate contract protection against ex post facto laws.