Owner financing in Florida: a guide for the seller who carries the note
If you sold Florida property and took back a note and mortgage, or sold on an agreement for deed, Florida law adds a few things to the job of holding the note: taxes at closing, a court process if the buyer stops paying, and a licensing exemption you should understand.
How a Florida seller-financed note is secured and enforced
The usual Florida structure is a promissory note secured by a mortgage. Florida forecloses mortgages in court: Fla. Stat. § 702.01 says all mortgages shall be foreclosed in equity. There is no out-of-court power-of-sale route.
An agreement for deed (Florida's contract for deed) does not get you around that. Under Fla. Stat. § 697.01, any instrument that conveys or retains an interest in property for the purpose of securing the payment of money is deemed a mortgage. That is why a Florida agreement for deed is generally foreclosed rather than simply cancelled when the buyer defaults.
Either way, a foreclosure starts with a statement of exactly what the buyer owes: principal, interest to date, and any late charges the note allows. That figure comes from your payment record, so the record has to be complete from the first payment.
Taxes at closing tied to the note
Florida charges documentary stamp tax on promissory notes and on mortgages at 35 cents per 100 dollars of the obligation, or fraction of it (Fla. Stat. § 201.08). When a note is secured by a recorded mortgage, the tax is paid on the mortgage when it is recorded and the note is marked as paid; the same debt is not taxed twice.
A one-time nonrecurring intangible tax of 2 mills (2 dollars per 1,000) also applies to obligations secured by a mortgage on Florida real property (Fla. Stat. § 199.133).
Your closing agent or title company normally collects both. They are worth knowing about when you set the price and terms, because they are paid at closing, not over the life of the note.
Licensing
Florida exempts a person who, as a seller of his or her own real property, receives one or more mortgages in a purchase money transaction from the state's mortgage lender licensing part (Fla. Stat. § 494.00115). The exemption is lost by holding yourself out to the public as a mortgage lender, and the person claiming it carries the burden of proving it.
Federal rules count seller-financed sales separately; see RMLO licensing thresholds and the de minimis exemption.
The record every Florida seller needs
Whatever the structure, the rules above all lean on the same thing: a complete record of every payment, the date it arrived, and how it was split between late fees, interest, principal and escrow. OwnerNote keeps that record. You log each payment as it arrives, and it applies every one the same way, keeps the balance current, produces payoff quotes good through any date, totals the year's interest, and prints statements for any period.
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