due-on-sale clause in Florida

1984Our court had originally adopted this analysis in First Federal Savings & Loan Association v. Lockwood, 385 So.2d 156 (Fla. 2d DCA 1980), when we held that a state trial court could deny a federal savings and loan association the right to enforce a due-on-sale clause absent an impairment of security.

1983The trial court held, consistent with this court’s holding in the case of First Federal Savings & Loan Association v. Lockwood, 385 So.2d 156 (Fla. 2d DCA 1980), that the appellant could not enforce the due-on-sale clause of the mortgage without alleging and proving that the transfer of the mortgaged property had impaired the lender’s security.

1984First Home Federal Savings & Loan Association v. Nance, 436 So.2d 163 (Fla. 2d DCA 1983).

1984First Federal notes that de la Cuesta has been expressly followed by our court and two of our sister courts in First Federal Savings & Loan Association of Winter Haven v. Quigley, 445 So.2d 1052 (Fla. 2d DCA 1984), First Home Federal Savings & Loan Association v. Nance, 436 So.2d 163 (Fla. 2d DCA 1983), Orange Federal Savings & Loan Association v. Dykes, 433 So.2d 642 (Fla. 5th DCA 1983), and Washington Federal Savings & Loan Association v. del Portillo, 419 So.2d 805 (Fla. 3d DCA 1982).

1984In our opinion in Orange Federal Savings & Loan Assn. v. Dykes, 433 So.2d 642 (Fla. 5th DCA 1983), we relied, as did the appellant, on the references in the slip opinion of the de la Cuesta 102 S.Ct. at 3019, 3031 (fn. 24), designating July 31, 1976, as the effective date of the due-on-sale clause regulatory amendment now codified as 12 C.F.R. § 545.8-3 (f).

1984First Federal notes that de la Cuesta has been expressly followed by our court and two of our sister courts in First Federal Savings & Loan Association of Winter Haven v. Quigley, 445 So.2d 1052 (Fla. 2d DCA 1984), First Home Federal Savings & Loan Association v. Nance, 436 So.2d 163 (Fla. 2d DCA 1983), Orange Federal Savings & Loan Association v. Dykes, 433 So.2d 642 (Fla. 5th DCA 1983), and Washington Federal Savings & Loan Association v. del Portillo, 419 So.2d 805 (Fla. 3d DCA 1982).

1984First Federal Savings & Loan Association v. Fox, 440 So.2d 652 (Fla. 2d DCA 1983).

1984While this appeal was pending, our court rendered its decision in First Federal Savings & Loan Association of Fort Myers v. Fox, 440 So.2d 652 (Fla. 2d DCA 1983), in which we held that the execution of an agreement for deed constituted a violation of an identical due on sale clause of a federal savings and loan association mortgage so as to permit foreclosure.

1984The trial judge, believing that he was bound by the case of Chopan v. Klinkman, 330 So.2d 154 (Fla. 4th DCA 1976), dismissed the complaint on the premise that the agreement for deed did not constitute a default under the due on sale clause.

1984Relying upon Chopan v. Klinkman, 330 So.2d 154 (Fla. 4th DCA 1976), they argued that an agreement for deed does not constitute a sale of property in violation of a due on sale clause.

1984First Federal notes that de la Cuesta has been expressly followed by our court and two of our sister courts in First Federal Savings & Loan Association of Winter Haven v. Quigley, 445 So.2d 1052 (Fla. 2d DCA 1984), First Home Federal Savings & Loan Association v. Nance, 436 So.2d 163 (Fla. 2d DCA 1983), Orange Federal Savings & Loan Association v. Dykes, 433 So.2d 642 (Fla. 5th DCA 1983), and Washington Federal Savings & Loan Association v. del Portillo, 419 So.2d 805 (Fla. 3d DCA 1982).

1984Fidelity Federal Savings & Loan Association v. de la Cuesta, 458 U.S. 141 , 102 S.Ct. 3014 , 73 L.Ed.2d 664 (1982); First Fidelity Federal Savings & Loan Association v. Quigley, 445 So.2d 1052 (Fla. 2d DCA 1984).

1982Both appellants and appellee cite the case of Delgado v. Strong, 360 So.2d 73 (Fla.1978), wherein the Supreme Court stated: It is well established that courts of equity may refuse to foreclose a mortgage when an acceleration of the due date would render the acceleration unconscionable and the result would be inequitable and unjust....

1982Both appellants and appellee cite the case of Delgado v. Strong, 360 So.2d 73 (Fla. 1978), wherein the Supreme Court stated: It is well established that courts of equity may refuse to foreclose a mortgage when *621 an acceleration of the due date would render the acceleration unconscionable and the result would be inequitable and unjust... .

2014The balance of Nikooie’s lien was not documented in the public records until 2007, and is therefore junior to the JPMorgan payoff plus interest. 9 As this Court held in Velazquez, Ms. Velazquez “has been deprived of a legal right—the payment of her mortgage upon the sale of the property pursuant to the due-on-sale clause.” 43 So. 3d at 84 . 12 Additionally, there is no evidence in the existing record to demonstrate that Nikooie paid documentary stamp and intangible taxes on the last $189,300 of the claimed indebtedness.

2014ATIF stipulated that its lien would be junior to both portions of the JPMorgan secured indebtedness. .As this Court held in Velazquez , Ms. Velazquez "has been deprived of a legal right— the payment of her mortgage upon the sale of the property pursuant to the due-on-sale clause.” 43 So.3d at 84 . .

1993Nehleber v. Anzalone, 345 So.2d 822 (Fla. 4th DCA 1977).

1991Co. v. McPherson K.M.P., 702 F. Supp. 836 (D.Kan. 1988).

1991Similarly, in Eyde Brothers Development Co. v. Equitable Life Assurance Society, 697 F. Supp. 1431 (W.D.Mich. 1988), affirmed, 888 F.2d 127 (6th Cir.1989), the mortgagee refused to consent to a transfer of the mortgaged property unless the interest rate was increased and the due-on-sale clause contained no language restricting the mortgagee's prerogative to grant or deny its consent to the proposed transfer.

1991The court rejected the mortgagor's argument that the due-on-sale clause imposed an unreasonable restraint on alienation, noting that there is a general rule that *237 "pays deference to the parties' freedom of contract, promising enforcement of a prepayment clause in accordance with the parties' agreement," and stating that there is a "clear legislative preference for upholding the parties' freedom of contract." 697 F. Supp. at 1434-35 .

1991Similarly, in Eyde Brothers Development Co. v. Equitable Life Assurance Society, 697 F. Supp. 1431 (W.D.Mich. 1988), affirmed, 888 F.2d 127 (6th Cir.1989), the mortgagee refused to consent to a transfer of the mortgaged property unless the interest rate was increased and the due-on-sale clause contained no language restricting the mortgagee's prerogative to grant or deny its consent to the proposed transfer.

1991On the other hand, in cases where the agreements contain in the due on sale clause language to the effect that consent to assumption will not be unreasonably withheld, court decisions have frequently construed such a provision as authorizing the trial court to test the withholding of consent against a standard of "reasonableness." See, e.g., Rubin v. Centerbanc Federal Savings & Loan Association, 487 So.2d 1193 (Fla. 2d DCA 1986); Western Life Ins.

1985In Barr Development, Inc. v. Utah Mortgage Loan Corp., 106 Idaho 46 , 675 P.2d 25 (1983), the court construed a due on sale clause as it related to a foreclosure of the property.

1985In Barr Development, Inc. v. Utah Mortgage Loan Corp., 106 Idaho 46 , 675 P.2d 25 (1983), the court construed a due on sale clause as it related to a foreclosure of the property.

1985Weiman v. McHaffie, 470 So.2d 682 (Fla.1985).

1984On the other hand, Lockwood and its progeny had not yet been rendered when this mortgage was executed, and the plain wording of the due on sale clause does not suggest that it cannot be enforced if there is no impairment of security. [5] Cf. Continental Mortgage Investors v. Sailboat Key, Inc., 395 So.2d 507 (Fla. 1981), which discusses the circumstances in which courts are justified in invoking public policy to refuse to enforce a contract which was legally entered into in another jurisdiction.

1984This court’s decisions in Pioneer Federal Savings & Loan Association v. Reeder, 453 So.2d 126 (Fla. 2d DCA 1984), and Kiefer v. Fortune Federal Savings & Loan Association, 453 So.2d 430 (Fla. 2d DCA 1984), recently rejected Haven Federal’s argument that a 1948 regulation of the Federal Home Loan Bank Board authorizing federal savings and loan associations to “provide for full protection to the federal association” had the effect of preempting Florida law thereafter.

1984See e.g., Clark v. Lachenmeier, 237 So.2d 583 (Fla. 2d DCA 1970); First Federal Savings & Loan Association of Englewood v. Lockwood, 385 So.2d 156 (Fla. 2d DCA 1980); Consolidated Capital Properties, II, Ltd. v. National Bank of North America, 420 So.2d 618 (Fla. 5th DCA 1982); Woodcrest Apartments, Ltd. v. IPA Realty Partners Richardson Palmer, 3rd Investment KG, 397 So.2d 364 (Fla. 1st DCA 1981).

1984See e.g., Clark v. Lachenmeier, 237 So.2d 583 (Fla. 2d DCA 1970); First Federal Savings & Loan Association of Englewood v. Lockwood, 385 So.2d 156 (Fla. 2d DCA 1980); Consolidated Capital Properties, II, Ltd. v. National Bank of North America, 420 So.2d 618 (Fla. 5th DCA 1982); Woodcrest Apartments, Ltd. v. IPA Realty Partners Richardson Palmer, 3rd Investment KG, 397 So.2d 364 (Fla. 1st DCA 1981).

1984See Chapman v. Pinellas County, 423 So.2d 578, 480 (Fla. 2nd DCA 1982); Dillon v. Chapman, 404 So.2d 354 (Fla. 5th DCA 1981); Stanfill v. State, 384 So.2d 141 (Fla. 1980); and State v. Hayes, 333 So.2d 51 (Fla. 4th DCA 1976). [3] Since the McHaffies' attempt to alienate their property fell within three years after October 15, 1982, they are entitled to require the Weimans to show an impairment of their security before the due-on-sale clause may be enforced.

1984See Chapman v. Pinellas County, 423 So.2d 578, 480 (Fla. 2nd DCA 1982); Dillon v. Chapman, 404 So.2d 354 (Fla. 5th DCA 1981); Stanfill v. State, 384 So.2d 141 (Fla. 1980); and State v. Hayes, 333 So.2d 51 (Fla. 4th DCA 1976). [3] Since the McHaffies' attempt to alienate their property fell within three years after October 15, 1982, they are entitled to require the Weimans to show an impairment of their security before the due-on-sale clause may be enforced.

1984See Chapman v. Pinellas County, 423 So.2d 578, 480 (Fla. 2nd DCA 1982); Dillon v. Chapman, 404 So.2d 354 (Fla. 5th DCA 1981); Stanfill v. State, 384 So.2d 141 (Fla. 1980); and State v. Hayes, 333 So.2d 51 (Fla. 4th DCA 1976). [3] Since the McHaffies' attempt to alienate their property fell within three years after October 15, 1982, they are entitled to require the Weimans to show an impairment of their security before the due-on-sale clause may be enforced.

1984First Federal notes that de la Cuesta has been expressly followed by our court and two of our sister courts in First Federal Savings & Loan Association of Winter Haven v. Quigley, 445 So.2d 1052 (Fla. 2d DCA 1984), First Home Federal Savings & Loan Association v. Nance, 436 So.2d 163 (Fla. 2d DCA 1983), Orange Federal Savings & Loan Association v. Dykes, 433 So.2d 642 (Fla. 5th DCA 1983), and Washington Federal Savings & Loan Association v. del Portillo, 419 So.2d 805 (Fla. 3d DCA 1982).

1984This court’s decisions in Pioneer Federal Savings & Loan Association v. Reeder, 453 So.2d 126 (Fla. 2d DCA 1984), and Kiefer v. Fortune Federal Savings & Loan Association, 453 So.2d 430 (Fla. 2d DCA 1984), recently rejected Haven Federal’s argument that a 1948 regulation of the Federal Home Loan Bank Board authorizing federal savings and loan associations to “provide for full protection to the federal association” had the effect of preempting Florida law thereafter.