Installment Notes in Florida Real Estate
An installment note is a written promise to repay a specified sum in periodic payments over time. In Florida real estate, the note is the debt instrument paired with a mortgage: the note creates the payment obligation, and the mortgage provides the lien security.
Key Components
- Principal: Original loan amount
- Interest rate: Fixed or adjustable (must comply with Florida usury laws)
- Payment schedule: Amount, frequency, and due date
- Maturity date: When final payment is due
- Late payment: Grace period and penalty amount
- Prepayment: Whether early payment is allowed without penalty
- Default: What triggers acceleration of the entire balance
Note and Mortgage Relationship
- The note is the debt; the mortgage is the security
- The mortgage follows the note (transfer of the note automatically transfers the mortgage)
- Foreclosure enforces the mortgage; a deficiency judgment enforces the note
Transferability
Installment notes are negotiable instruments under the UCC. They can be sold on the secondary market through endorsement and delivery. The borrower’s obligations remain unchanged regardless of who holds the note.
Related Terms
- Mortgage — Security instrument
- Promissory Note — General debt instrument
- Foreclosure — Default enforcement
- Seller Financing — Private note creation
Barnes Walker Finance
Barnes Walker’s attorneys draft installment notes for residential and commercial real estate transactions in Southwest Florida. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC