We are often contacted by people who have lost a loved one and have just found out there might be some Florida Surplus Funds from a Foreclosure Sale. One question we are often asked is whether a Probate needs to be done in order for the heir(s) to receive these funds. The short answer is, not necessarily. Florida Statute 45.033(2)(b) states in part, “An involuntary transfer or assignment may be as a result of inheritance”.
An involuntary transfer in this respect means that upon the original owner’s death the property rights are automatically transferred to his/her heirs. The Third District Court of Appeal of Florida clarified this exact rule in Suarez v. Edgehill in 2009. In this case there was a question as to whether the heir of Sheila Edgehill was able to automatically receive the funds after her death or if it should go to the third-party purchaser. The third-party purchaser had no rights to the surplus as the rules state that “the owner of record on the date of the filing of the lis pendens . .” The third-party purchaser is the owner after the property is foreclosed on and title is issued.
The court stated Florida Statute 45.033(2)(b) is “instructive” and that “an involuntary transfer could occur if the owner of record dies, so the right to receive the surplus passes to the heirs.” This means that the moment the owner of record dies, the right to receive the Surplus Funds automatically transfers to the heirs. No official transfer of title or probate is necessary.
This doesn’t mean you can get the funds immediately, but it certainly makes the process quicker. First and foremost, there must be a satisfaction of subordinate lienholders (if any) who make a timely claim. If there are no subordinate lienholders, then the legal heirs have the right to claim the Surplus Funds. As long as you can establish this involuntary transfer through inheritance because you are an heir and the required time period has passed for any subordinate lienholders to make a timely claim, then the court can be petitioned to release the funds.
This means that a Probate is not necessary if you can clearly establish that the person(s) requesting the funds is the heir of the deceased party. We have successfully argued this for many of our clients and have been able to recover these Surplus Funds for our clients all while avoiding a costly and lengthy Probate case. If you are the heir of someone who was due Florida Foreclosure Surplus Funds, please give me a call for a free consultation. I practice Foreclosure Surplus Recovery in every county in the State of Florida and I don’t get paid unless you do.