HB 7099

1	A bill to be entitled
2	An act relating to land trusts; amending s. 689.071, F.S.;
3	providing a short title; providing definitions; revising
4	provisions relating to land trust transfers of real
5	property and vesting of ownership in a trustee; deleting a
6	requirement that a trustee be qualified to act as a
7	fiduciary; deleting obsolete references to "dower" and
8	"curtesy"; specifying rights, liabilities, and duties of
9	land trust beneficiaries; providing that the principal
10	residence of a beneficiary which is held in a land trust
11	may be entitled to the homestead tax exemption; providing
12	for the appointment of successor trustees; providing
13	requirements for declarations of appointment; providing
14	that a trustee of a land trust may be a creditor of the
15	trust or of a trust beneficiary; amending s. 201.02, F.S.;
16	conforming a cross-reference; providing application;
17	providing an effective date.
18
19	Be It Enacted by the Legislature of the State of Florida:
20
21	Section 1.  Section 689.071, Florida Statutes, is amended
22	to read:
23	689.071  Florida Land Trust Act trusts transferring
24	interests in real estate; ownership vests in trustee.--
25	(1)  SHORT TITLE.--This section may be cited as the
26	"Florida Land Trust Act."
27	(2)  DEFINITIONS.--As used in this section, the term:
28	(a)  "Beneficial interest" means any interest, vested or
29	contingent and regardless of how small or minimal such interest
30	may be, in a land trust which is held by a beneficiary.
31	(b)  "Beneficiary" means any person or entity having a
32	beneficial interest in a land trust. A trustee may be a
33	beneficiary of the land trust for which such trustee serves as
34	trustee.
35	(c)  "Holder of the power of direction" means any person or
36	entity having the authority to direct the trustee to convey
37	property or interests, execute a mortgage, distribute proceeds
38	of a sale or financing, and execute documents incidental to the
39	administration of a land trust.
40	(d)  "Land trust" is not the creation of an entity, but
41	means any express written agreement or arrangement by which a
42	use, confidence, or trust is declared of any land, or of any
43	charge upon land, for the use or benefit of any beneficiary,
44	under which the title to real property, both legal and
45	equitable, is held by a trustee, subject only to the execution
46	of the trust, which may be enforced by the beneficiaries.
47	(e)  "Trustee" means the person or entity designated in a
48	trust instrument to hold legal and equitable title to property
49	of a land trust.
50	(3)(1)  OWNERSHIP VESTS IN TRUSTEE.--Every conveyance,
51	deed, mortgage, lease assignment, or other instrument heretofore
52	or hereafter made, hereinafter referred to as "the recorded
53	instrument," transferring any interest in real property in this
54	state, including, but not limited to, a leasehold or mortgagee
55	interest, to any person or any, corporation, bank, trust
56	company, or other entity duly formed under the laws of its state
57	of qualification qualified to act as a fiduciary in this state,
58	in which recorded instrument the person, corporation, bank,
59	trust company, or other entity is designated "trustee," or "as
60	trustee," without therein naming the beneficiaries of such
61	trust, whether or not reference is made in the recorded
62	instrument to any separate collateral unrecorded declarations or
63	agreements, is effective to vest, and is hereby declared to have
64	vested, in such trustee full rights of ownership over the real
65	property or interest therein, with full power and authority as
66	granted and provided in the recorded instrument to deal in and
67	with the property or interest therein or any part thereof;
68	provided, the recorded instrument confers on the trustee the
69	power and authority either to protect, conserve and to sell, or
70	to lease, or to encumber, or otherwise to manage and dispose of
71	the real property described in the recorded instrument.
72	(4)(2)  NO DUTY TO INQUIRE.--Any grantee, mortgagee,
73	lessee, transferee, assignee, or person obtaining satisfactions
74	or releases or otherwise in any way dealing with the trustee
75	with respect to the real property or any interest in such
76	property properties held in trust under the recorded instrument,
77	as hereinabove provided for, is not obligated to inquire into
78	the identification or status of any named or unnamed
79	beneficiaries, or their heirs or assigns to whom a trustee may
80	be accountable under the terms of the recorded instrument, or
81	under any unrecorded separate declarations or agreements
82	collateral to the recorded instrument, whether or not such
83	declarations or agreements are referred to therein; or to
84	inquire into or ascertain the authority of such trustee to act
85	within and exercise the powers granted under the recorded
86	instrument; or to inquire into the adequacy or disposition of
87	any consideration, if any is paid or delivered to such trustee
88	in connection with any interest so acquired from such trustee;
89	or to inquire into any of the provisions of any such unrecorded
90	declarations or agreements.
91	(5)(3)  BENEFICIARY CLAIMS.--All persons dealing with the
92	trustee under the recorded instrument as hereinabove provided
93	take any interest transferred by the trustee thereunder, within
94	the power and authority as granted and provided therein, free
95	and clear of the claims of all the named or unnamed
96	beneficiaries of such trust, and of any unrecorded declarations
97	or agreements collateral thereto whether referred to in the
98	recorded instrument or not, and of anyone claiming by, through,
99	or under such beneficiaries. However, this section does not
100	prevent including, and without limiting the foregoing to, any
101	claim arising out of any dower or curtesy interest of the spouse
102	of any beneficiary thereof; provided, nothing herein contained
103	prevents a beneficiary of any such unrecorded collateral
104	declarations or agreements from enforcing the terms thereof
105	against the trustee.
106	(6)(4)  PERSONAL PROPERTY.--In all cases in which the
107	recorded instrument, as hereinabove provided, contains a
108	provision defining and declaring the interests of beneficiaries
109	thereunder to be personal property only, such provision shall be
110	controlling for all purposes when such determination becomes an
111	issue under the laws or in the courts of this state.
112	(7)(5)  TRUSTEE LIABILITY.--In addition to any other
113	limitation on personal liability existing pursuant to statute or
114	otherwise, the provisions of s. 737.306 apply to the trustee of
115	a land trust created pursuant to this section.
116	(8)  LAND TRUST BENEFICIARIES.--
117	(a)  Except as provided in this section, the beneficiaries
118	of a land trust are not liable, solely by being a beneficiary,
119	under a judgment, decree, or order of court or in any other
120	manner for a debt, obligation, or liability of the land trust.
121	(b)  Any beneficiary acting under the trust agreement of a
122	land trust is not liable to the land trust's trustee or to any
123	other beneficiary for the beneficiary's good faith reliance on
124	the provisions of the trust agreement.
125	(c)  Chapter 679 applies to the perfection of any security
126	interest in a beneficial interest in a land trust. The
127	perfection of a security interest in a beneficial interest in a
128	land trust does not impair or diminish the authority of the
129	trustee under the recorded instrument, and parties dealing with
130	the trustee are not required to inquire into the terms of the
131	unrecorded trust agreement.
132	(d)  A beneficiary's duties and liabilities may be expanded
133	or restricted in a trust agreement or beneficiary agreement.
134	(e)  Any subsequent document appearing of record in which a
135	beneficiary of a trust transfers or encumbers the beneficial
136	interest in the trust does not diminish or impair the authority
137	of the trustee under the terms of the recorded instrument.
138	Parties dealing with the trustee are not required to inquire
139	into the terms of the unrecorded trust agreement.
140	(f)  An unrecorded trust agreement giving rise to a
141	recorded instrument for a land trust may provide that one or
142	more persons or entities have the power to direct the trustee to
143	convey property or interests, execute a mortgage, distribute
144	proceeds of a sale or financing, and execute documents
145	incidental to administration of the land trust. The power of
146	direction, unless provided otherwise in the land trust
147	agreement, is conferred upon the holders of the power for the
148	use and benefit of all holders of any beneficial interest in the
149	land trust. In the absence of a provision in the land trust
150	agreement to the contrary, the power of direction shall be in
151	accordance with the percentage of individual ownership. In
152	exercising the power of direction, the holders of the power of
153	direction are presumed to act in a fiduciary capacity for the
154	benefit of all holders of any beneficial interest in the trust,
155	unless otherwise provided in the land trust agreement. A
156	beneficial interest is indefeasible, and the power of direction
157	may not be exercised so as to alter, amend, revoke, terminate,
158	defeat, or otherwise affect or change the enjoyment of any
159	beneficial interest.
160	(g)  A trust relating to real estate does not fail, and any
161	use relating to real estate may not be defeated, because
162	beneficiaries are not specified by name in the recorded deed of
163	conveyance to the trustee or because duties are not imposed upon
164	the trustee. The power conferred by any recorded deed of
165	conveyance on a trustee to sell, lease, encumber, or otherwise
166	dispose of property described in the deed is effective, and a
167	person dealing with the trustee is not required to inquire any
168	further into the right of the trustee to act or the disposition
169	of any proceeds.
170	(h)  The principal residence of a beneficiary may be
171	entitled to the homestead tax exemption even if the homestead is
172	held by a trustee in a land trust.
173	(9)  SUCCESSOR TRUSTEE.--
174	(a)  The provisions of s. 737.309 relating to the
175	resignation of a trustee do not apply to the appointment of a
176	successor trustee under this section.
177	(b)  If the recorded instrument and the unrecorded land
178	trust agreement are silent as to the appointment of a successor
179	trustee in the event of the death, incapacity, resignation, or
180	termination due to dissolution of a land trustee or if a land
181	trustee is unable to serve as trustee, one or more persons or
182	entities having the power of direction of the land trust
183	agreement may appoint a successor trustee or trustees of the
184	land trust by filing a declaration of appointment of a successor
185	trustee or trustees in the office of the recorder of deeds in
186	the county in which the trust property is located. The
187	declaration must be signed by a beneficiary or beneficiaries of
188	the trust and by each successor trustee, must be acknowledged in
189	the manner provided for acknowledgment of deeds, and must
190	contain:
191	1.  The legal description of the trust property.
192	2.  The name and address of the former trustee.
193	3.  The name and address of each successor trustee.
194	4.  A statement that each successor trustee has been
195	appointed by one or more persons or entities having the power of
196	direction of the land trust, together with an acceptance of
197	appointment by each successor trustee.
198	(c)  If the recorded instrument is silent as to the
199	appointment of a successor trustee or trustees but an unrecorded
200	land trust agreement provides for the appointment of a successor
201	trustee or trustees in the event of the death, incapacity,
202	resignation, or termination due to dissolution of the land
203	trustee, upon the appointment of any successor trustee pursuant
204	to the terms of the unrecorded land trust agreement, each
205	successor trustee shall file a declaration of appointment of a
206	successor trustee in the office of the recorder of deeds in the
207	county in which the trust property is located. The declaration
208	must be signed by both the former trustee and each successor
209	trustee, must be acknowledged in the manner provided for
210	acknowledgment of deeds, and must contain:
211	1.  The legal description of the trust property.
212	2.  The name and address of the former trustee.
213	3.  The name and address of the successor trustee.
214	4.  A statement of resignation by the former trustee and a
215	statement of acceptance of appointment by each successor
216	trustee.
217	5.  A statement that each successor trustee was duly
218	appointed under the terms of the unrecorded land trust
219	agreement.
220
221	If the appointment of any successor trustee is due to the death
222	or incapacity of the former trustee, the declaration need not be
223	signed by the former trustee and a copy of the death certificate
224	or a statement that the former trustee is incapacitated or
225	unable to serve must be attached to or included in the
226	declaration, as applicable.
227	(d)  If the recorded instrument provides for the
228	appointment of any successor trustee and any successor trustee
229	is appointed in accordance with the recorded instrument, no
230	additional declarations of appointment of any successor trustee
231	are required under this section.
232	(e)  Each successor land trustee appointed is fully vested
233	with all the estate, properties, rights, powers, trusts, duties,
234	and obligations of the predecessor land trustee, except that any
235	successor land trustee is not under any duty to inquire into the
236	acts or omissions of a predecessor trustee and is not liable for
237	any act or failure to act of a predecessor trustee. A person
238	dealing with any successor trustee pursuant to a declaration
239	filed under this section is not obligated to inquire into or
240	ascertain the authority of the successor trustee to act within
241	or exercise the powers granted under the recorded instruments or
242	any unrecorded declarations or agreements.
243	(f)  A land trust agreement may provide that the trustee,
244	when directed to do so by the beneficiaries of the land trust or
245	legal representatives of the beneficiaries, may convey the trust
246	property directly to another trustee on behalf of the
247	beneficiaries or others named by the beneficiaries.
248	(10)  TRUSTEE AS CREDITOR.--
249	(a)  If a debt is secured by a security interest in a
250	beneficial interest in a land trust or by a mortgage on land
251	trust property, the validity or enforceability of the debt,
252	security interest, or mortgage and the rights, remedies, powers,
253	and duties of the creditor with respect to the debt or the
254	security are not affected by the fact that the creditor and the
255	trustee are the same person or entity, and the creditor may
256	extend credit, obtain any necessary security interest or
257	mortgage, and acquire and deal with the property comprising the
258	security as though the creditor were not the trustee.
259	(b)  A trustee of a land trust does not breach a fiduciary
260	duty to the beneficiaries, and it is not evidence of a breach of
261	any fiduciary duty owed by the trustee to the beneficiaries for
262	a trustee to be or become a secured or unsecured creditor of the
263	land trust, the beneficiary of the land trust, or a third party
264	whose debt to such creditor is guaranteed by a beneficiary of
265	the land trust.
266	(11)(6)  REMEDIAL ACT.--This act is remedial in nature and
267	shall be given a liberal interpretation to effectuate the intent
268	and purposes hereinabove expressed.
269	(12)(7)  EXCLUSION.--This act does not apply to any deed,
270	mortgage, or other instrument to which s. 689.07 applies.
271	Section 2.  Subsection (4) of section 201.02, Florida
272	Statutes, is amended to read:
273	201.02  Tax on deeds and other instruments relating to real
274	property or interests in real property.--
275	(4)  The tax imposed by subsection (1) shall also be
276	payable upon documents which convey or transfer, pursuant to s.
277	689.071, any beneficial interest in lands, tenements, or other
278	real property, or any interest therein, even though such
279	interest may be designated as personal property, notwithstanding
280	the provisions of s. 689.071(6)(4). The tax shall be paid upon
281	execution of any such document.
282	Section 3.  This act is intended to clarify existing law
283	and applies to all land trusts whether created before, on, or
284	after October 1, 2006.
285	Section 4.  This act shall take effect October 1, 2006.

CODING: Words stricken are deletions; words underlined are additions.