I have often discussed how with a Florida Tax Deed Sale some subordinate lienholders claims will be extinguished by statute. But what about for a Florida Foreclosure Sale? Are any of these lienholders extinguished after a foreclosure sale? In short, no. These subordinate lienholders are not automatically extinguished by statute. However, there are some cases when a qualified Foreclosure Surplus Attorney can show that those lienholders are not able to receive the Florida Foreclosure Surplus Funds and you should receive them instead.
According to Florida Statute 45.033(1) and 45.032(2), there is “established a rebuttable presumption that the owner of record of real property on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholder who have timely filed a claim.” The most important part of that sentence as it pertains to subordinate lienholders is that they must make their claim timely. Unfortunately, the Florida Legislature decided to alter the statute to take out the 60-day time limit and the new time limit is one year from the date the court orders the clerk to hold the funds. This means that the lienholder can’t make a claim before the funds are put into the clerk’s registry and they can’t make a claim after a year has gone by.
Additionally, the only party that can make a claim to the Florida Foreclosure Surplus Funds besides the previous owner of the property is a subordinate lienholder. That means that if the foreclosure case is initiated by a homeowner’s association, the mortgage lender would not be able to make a claim to the funds. A mortgage lender is always a superior lienholder, and the mortgage lien will stay attached to the property even after a foreclosure sale from a homeowner’s association or other lesser lienholder. The timeline is the most important thing to worry about though.
If your mortgage lender is the one who foreclosed, then there is always a possibility of a subordinate lienholder making a claim within the one-year period after the Florida Foreclosure Surplus Funds have been placed in the court registry. If there are no subordinate lienholders, then you can get the funds right away. If your property is foreclosed by your homeowner’s association and there are no other subordinate lienholders, you can get the money right away even if there is still a mortgage lien still on the property. As I said before, they aren’t subordinate to a homeowner’s association and only a subordinate lienholder can make a claim.
This is why it is extremely important to contact a qualified Florida Foreclosure Surplus and Tax Deed Surplus attorney to handle your claim. All of those third-party surplus recovery companies out there who may be contacting you after your property has sold at auction have little to no idea what the statutes say or what the case law is in regard to the sensitive nature of the timelines surrounding surplus funds. Most of them only know the statutes and case law based on reading my blogs. They also charge exorbitant fees, hide the true nature of their business and often times will make fraudulent claims on behalf of heirs to estates that don’t actually exist.
If you have been informed by the Clerk of Court that you have Florida Foreclosure Surplus Funds available to you or if you have been contacted by one of those shady third-party surplus recovery companies, please give me a call for a free consultation. I can give you a true and accurate assessment on the timeline that it will take on recovering your Florida Foreclosure Surplus Funds. I can research whether or not you have any subordinate lienholder that may be able to make a claim to those funds and whether or not we are able to prevent them from getting the funds. I handle Foreclosure Sale Surplus and Tax Deed Sale Surplus Funds in every County in the State of Florida and I don’t get paid unless you do.