Requirements for a Document Executed by a Corporation

To preface the following conversation, the question was asked “Why does the Underwriter accept a deed without a corporate seal and without a corporate resolution that was executed by a president or CEO but does NOT accept it if it was executed by a vice president?”

Other underwriting manuals reiterate this position but do not fully explain the basis for the underwriter’s decision.

Let’s first start with 689.01, F.S. – How real estate conveyed. This statute generally states that the party conveying the estate must sign a deed in the presence of two subscribing witnesses. Furthermore, the statute goes on to state that corporations may execute a deed in accordance with this statute (two witnesses) or with 692.01 and 692.02, F.S.

Now let’s continue by dissecting 692.01, F.S. The statute reads as follows:

692.01Conveyances executed by corporations.—Any corporation may execute instruments conveying, mortgaging, or affecting any interest in lands by instruments sealed with the common or corporate seal and signed in its name by its president or any vice president or chief executive officer. Assignments, satisfactions, or partial releases of mortgages and acquittances for debts may be similarly executed by any corporate officer. No corporate resolution need be recorded to evidence the authority of the person executing the deed, mortgage, or other instrument for the corporation, and an instrument so executed is valid whether or not the officer signing for the corporation was authorized to do so by the board of directors, in the absence of fraud in the transaction by the person receiving it. In cases of fraud, subsequent transactions with good faith purchasers for value and without notice of the fraud shall be valid and binding on the corporation.

The statute starts off pretty clear by stating that a president, CEO or vice president may execute a deed if signed and a corporate seal is utilized. The word “may” is an interesting choice here as it is a bit ambiguous and not followed up with a statement offering protection or certainty. Such protection is somewhat addressed in 692.02, F.S. which states that a conveyance sealed and executed by a vice president or CEO shall bear the same presumptions as if signed by its president. Moving on to the next sentence in 692.01, F.S., mortgage assignments or releases may be executed by any officer if signed and a corporate seal is utilized. So far we’re pretty clear that when an instrument is sealed with the corporate/common seal the president, CEO and vice president may execute on behalf of the corporation. The next sentence throws things off as it states that “No corporate resolution need be recorded…, and an instrument so executed is valid whether or not the officer….was authorized”. Questions that arise include:

  1. Does a resolution need to be obtained but just not recorded?
  2. Is “so executed” bringing into context the prior two sentences which talk to the documents being sealed – leaving the protections afforded under the statute to only apply to sealed instruments and not to documents lacking a seal?

Important Concept: Regardless of the vagueness of the statute’s wording and the questions one may have, the statute does not explicitly state that a president, CEO or vice president may execute a deed without a corporate seal (but with two witnesses) and not record a corporate resolution and be protected under 692.01, F.S. Based on this, one may conclude that 692.01 really only explicitly applies to deeds which contain the corporate seal with some protection offered for subsequent good faith purchasers for value.

Since protection under our scenario is not afforded by Florida Statutes, underwriters have to look elsewhere for protection or take on the additional risk accordingly. A form of support falls within business law and a concept known as Apparent Authority. Generally, case law has held that a third party may make some assumptions as to an individual’s apparent authority based on the individual holding the position of president or CEO of a corporation. Said another way, one may assume that the president or CEO is authorized to sign a deed on behalf of the corporation without obtaining a corporate resolution from the board of directors. It should be noted that extraneous situations, such as a corporation selling substantially all of its assets, require specific approval from shareholders. A company will typically have several vice presidents, therefore, it is not as easily assumed that each vice president has the same apparent authority to executed a deed on behalf of the corporation.

In conclusion, under the concept of apparent authority an underwriter will typically allow the President or CEO to execute a deed without seal (but with two witnesses) and without corporate resolution. A VP does not have the same apparent authority or case law support, therefore, a VP that executes a deed without seal (but with two witnesses) must be authorized to do so by virtue of a corporate resolution. Additionally, based upon the last sentence of 692.01, underwriters will typically allow previous deeds in the chain of title that were executed by a Vice President without resolution to be insured over.

Overview/Summary

Mortgages are not required under 689.01, F.S. to contain two witnesses. This allows the president or CEO to execute mortgage documents without seal, without witnesses and without resolution. A vice president may execute mortgage documents, without seal, without witnesses but with a recorded resolution.

To summarize, the president, vice president (executive/senior, not assistant) or CEO may execute a deed with seal without witnesses or corporate resolution. The president or CEO may execute a deed without seal with witnesses and without resolution. Any vice president (or other officer, not only executive/senior) may execute a deed without seal with witnesses and with a recorded resolution.

Document Type

Yes Seal
No Resolution

Yes Seal
Yes Resolution

No Seal
No Resolution

No Seal
Yes Resolution

Deeds, Leases & Easements President, CEO
Executive VP
Any Corporate Officer President & CEO
(Two witnesses)
VP, Any corporate Officer
(Two witnesses)
Mortgages; Assignments, Satisfactions and Releases of Mortgage President, CEO
Executive VP
Any Corporate Officer President & CEO
(No witnesses)
VP, Any corporate Officer
(No witnesses)

 

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