Does Florida Use Deeds of Trust or Mortgages?

In some states, lenders use a deed of trust, which conveys title to a trustee who can sell the property if the borrower defaults. Florida law takes a different approach. Section 697.01(1) provides that all conveyances and other instruments of writing conveying or selling real or personal property for the purpose of securing the payment of money are deemed mortgages.

That rule applies whether the instrument runs from the debtor to the creditor or from the debtor to a third person in trust for the creditor. As a result, a document labeled a deed of trust that secures a debt on Florida property is handled under the same rules, restraints, and forms of foreclosure as a mortgage.

Section 697.02 describes what a Florida mortgage is. It is a specific lien on the property described, not a conveyance of legal title or the right of possession. The borrower keeps title while the lender holds a lien.

There is one limit on recharacterization. Under section 697.01(2), a conveyance is not treated as a mortgage against a bona fide purchaser or mortgagee for value without notice who holds under the grantee. Questions about mortgages after an owner's death are covered in whether a mortgage can stay in a deceased person's name.