Florida Balloon Payment and Doc Stamp Specifics

Florida Mortgage – Doc Stamp Tax and Florida Balloon Payment

1. Balloon Payment Notice in CRE Loan Documents
   1. We do include a Balloon Payment Notice in the Florida CRE loan package. It appears as a highlighted clause in the recorded mortgage itself (see Section EE or thereabouts of the Security Instrument). This complies with Florida’s requirement under §697.05, Fla. Stat., that balloon payments be clearly disclosed when the maturity is less than 60 months or the loan is not fully amortizing.  
      
   2. In addition to the embedded clause, we will also include a bolded “Balloon Mortgage” header at the top of the mortgage document whenever a statutory balloon-payment condition applies. This aligns with industry practice. Florida Statute § 697.05 governs the inclusion of a balloon payment disclosure in mortgage documents. Specifically, it requires a conspicuous legend when the final principal payment exceeds twice the regular periodic payment, identifying the mortgage as a balloon mortgage. However, the statute also outlines seven exceptions where this disclosure is not required, including:
      • Mortgages with terms of 5 years or more
      • Interest-only mortgages
      • Mortgages over $500,000
      • Mortgages covered by the federal Truth in Lending Act
      • Seller-financed mortgages with balloon terms
      • Certain home improvement contracts

      GoDocs has coded its Florida mortgage logic to automatically exclude the balloon payment header when the data entry for an order triggers one of these statutory exceptions. This ensures compliance with Florida law while avoiding unnecessary or misleading disclosures.

      For example:

      • If the loan term exceeds 60 months, the balloon header is omitted.
      • If the mortgage is interest-only, the header is also excluded.

      This automation helps streamline document generation and ensures that the balloon payment legend only appears when legally required under Florida law.

      
      
2. Why the CRE Note Doesn’t Include a Doc Stamp Clause
   1. Our C&I Note includes a documentary stamp clause, to cover situations where the Note might not be secured or recorded (such as UCC-only filings). That clause remains helpful in C&I deals because in certain unsecured or UCC-only setups, there’s no recorded instrument to which the tax can attach directly, so parties need a standalone representation in the Note.
   2. For CRE, however, Florida practice is different: The documentary stamp tax is paid when the mortgage is recorded, and the county clerk or title company typically ensures that the proper notation is added. Florida law requires the mortgage reflect that stamp tax has been paid. Since stamp taxes on CRE loans are inherently tied to recording the mortgage—and the mortgage always gets recorded in CRE deals—the notation is added as part of the clerk’s recordation process, not via a preprinted clause in the Note. 
3. UCC-1 Filings and Doc Stamps
   1. For UCC-1s, Florida does not require documentary stamp tax unless the UCC is securing a promissory note or other obligation related to real property. In those cases, the checkbox or reference to stamp tax (which we include as needed) helps clarify that tax has been paid—if applicable. But in CRE, where the mortgage itself already addresses this, it would be redundant to also reflect this in the Note.