USA - FLORIDA Law and Practice Contributed by: Jeffrey R Margolis, Marc S Shuster, James L Berger and Evan Rosenberg, Berger Singerman LLP
gage recorded in Florida. The tax would be paid in connection with recording the mortgage, and evidence of payment indicated in the promis - sory note. In addition, a non-recurring intangibles tax is imposed on debt secured by a Florida mortgage. The intangibles tax is USD0.20 per USD100 (or portion thereof) – ie, 0.20% – of debt secured by a mortgage encumbering Florida real property. In a leasehold mortgage, the documentary stamp tax would be due, but not the intangibles tax. Recording fees in Florida are set by the coun - ties and are most often based on the number of pages of the document being recorded. 3.5 Legal Requirements Before an Entity Can Give Valid Security As with any action to be taken, the entity and its managers and owners must comply with rel - evant governing procedures, including proper notice and authorisation or ratification from the equity owners or others who may have consent or approval rights. Occasionally, land use restric - tions, other governmental restrictions, or private agreements govern or restrict an entity’s ability to pledge assets. 3.6 Formalities When a Borrower Is in Default Upon default under a mortgage, a lender must comply with any notice provisions in the mort - gage and provide the borrower with any cure rights that may be applicable under the mort - gage. Lenders must also consider any notice that may be required under a security agree - ment separate and apart from the mortgage, and under the Uniform Commercial Code (UCC), and must also consider demand for turnover of rents, if relevant. If provided for in the loan documents, late fees and/or default interest may be imposed.
If it is determined that a default has occurred, that notice and cure rights have been provided, and that cure has not been affected within the time or in the manner specified in the govern - ing documents, the lender may seek to enforce its remedies, including by foreclosing on the encumbered real estate. In Florida, foreclosure is a judicial remedy (non-judicial foreclosure is not permitted in Florida), requiring the filing of a lawsuit in the appropriate court with proper jurisdiction. 3.7 Subordinating Existing Debt to Newly Created Debt It is certainly possible for existing debt to be sub - ordinated to newly created debt by agreement. This happens in various contexts, most regularly where some type of early venture or bridge loan precedes permanent financing. A subordination agreement between the first lender and new lender, and usually including the borrower, is the most effective way to accomplish a subordina - tion by contract. 3.8 Lenders’ Liability Under Environmental Laws It is customary for loan documents to provide indemnification and hold harmless provisions protecting the lender from any environmental liability. If a lender becomes the property owner by foreclosure or deed in lieu, then the lender/ owner takes the property as it is, including sub - ject to fines or remediation requirements as may exist at the time. 3.9 Effects of a Borrower Becoming Insolvent The insolvency of a borrower raises several issues for the secured creditor. First, if insol - vency results in a bankruptcy proceeding by the borrower, all actions to enforce rights or rem - edies against the borrower are stayed automati -
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