Earlier this month Florida’s Third DCA addressed the homestead exemption in article X, section 4(c) of the Florida Constitution in the context of alienation and spousal abandonment of homestead property. Isaacs v. Fed. Nat’l Mortg. Ass’n, No. 3D20-0604, 2022 WL 17660325, at *1 (Fla. 3d DCA Dec. 14, 2022). Alienation of homestead property occurs, for example, when one spouse takes out a mortgagei without the other spouse’s consent. Ostensibly, that is what happened in Isaacs where a husband (Isaacs) and wife purchased and occupied homestead property (the Property) and then separated, but never divorced.ii Although Isaacs continued to maintain and visit the Property, he did not live at the Property and in 1999 Isaacs quitclaimed his interest in the Property to his wife and purchased another home which he declared his homestead.
In 2005 the wife took out a mortgage on the Property. Although the mortgage contained Isaacs’ signature, he claimed it was a forgery. In 2016 the wife died, and the Property went to Isaacs as the wife’s surviving spouse. The mortgagee, Federal National Mortgage Association (FNMA), initiated foreclosure proceedings against Isaacs and the wife’s estate due to a payment default. Based on the spousal joinder requirement of section 4(c) and the fact Isaacs claimed his signature on the mortgage was forged, Isaacs argued the mortgage was not valid. FNMA argued that Isaacs “waived the joinder requirement by abandoning the homestead prior to the mortgage.” Isaacs rebutted that the Property was the wife’s homestead when she took out the mortgage, so the joinder requirement still applied regardless of his alleged abandonment of the Property. The trial court agreed with FNMA concluding that Isaacs’ abandonment of the Property prior to his wife taking out the mortgage constituted a waiver of the joinder requirement of section 4(c). The court entered a final judgment of foreclosure in favor of FNMA and Isaacs appealed.
The Third DCA reversed the foreclosure judgment. The Court relied primarily on the Florida Supreme Court’s reasoning in In re Est. of Scholtz which addressed section 4(c) in the context of restrictions on devising (i.e., disposition via a will) homestead property.iii The Florida Supreme Court held that “homestead [property] may not be devised if the owner is survived by a spouse or minor child” regardless of “whether the surviving spouse lived at the property at the time of his death.”iv The Third DCA surmised there was no reason why the Florida Supreme Court’s logic and holding would not also apply to restraints on alienation of homestead property. The Court concluded the lack of Isaacs’ joinder on the 2005 mortgage of the Property rendered the mortgage invalid and entry of the foreclosure judgment improper. The Court reversed the judgment and remanded the matter for further proceedings.v
i Section 4(c) of the Florida constitution prohibits alienation by “mortgage, sale or gift.”
ii Isaacs, at *1. All future quotations or references to this case are to this citation until indicated otherwise.
iii Isaacs, at *3 citing In re Est. of Scholtz, 543 So. 2d 219, 221 (Fla. 1989).
iv Isaacs, at *3 citing In re Est. of Scholtz, 543 So. 2d 219, 221 (Fla. 1989).
v Isaacs, at *4.