Can a Subordinate Lienholder make a claim for Attorney's fees in a Foreclosure Surplus case?

We are often confronted with subordinate lienholders when handling a Foreclosure surplus case. Many of these subordinate lienholders will try to get as much of your surplus as they possibly can. This can include their attorney’s fees. However, if this subordinate lienholder has not followed proper procedure, they may not be intitled to those attorney’s fees.

First, what is a Subordinate Lienholder? According to Florida Statute 45.032(1)(b), “A subordinate lienholder includes, but is not limited to, a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien.” This could be a second mortgage or a company that did work on your property that wasn’t paid timely, or your homeowner’s association if you didn’t pay your dues.

In order for them to make a claim on your Surplus Funds from a foreclosure sale, they must have timely filed a claim on the funds. This does not necessarily mean they will be able to get their attorney’s fees when they ask for their part of the surplus funds. There is an old case from 1991 that still holds true and is cited in the Florida Rules of Civil Procedure, Rule 1.525 when dealing with attorney’s fees. The rule itself states that “Any party seeking a judgment taxing costs, attorney’s fees, or both shall serve a motion no later than 30 days after filing of the judgment”. Meaning that the party must file a motion for the attorney’s fees within that 30-day timeline. The rule further states that it “in no way affects or overrules the pleading requirements outlined by this Court in Stockman v. Downs, 5573 So. 2d 835 (Fla. 1991).” The requirements set forth in Stockman state that if the attorney’s fees are not specifically plead, then the party requesting will not get them unless the claim was based on statute.

We recently had a Foreclosure Surplus case where the subordinate lienholder did not respond to the original complaint even though they were a named defendant in the foreclosure case and was subsequently defaulted. This did not mean they couldn’t timely file for their part of the surplus funds, which they did. It only meant that they could now not ask for attorney’s fees in requesting said surplus funds. You see, they did not respond to the original case in any way. This means they did not request attorney’s fees in a timely manner because they had been silent and even defaulted on during the foreclosure proceedings.

Granted, the attorney’s fees in this case were not very large. However, by me knowing the rule, I was able to save my client even more of her money that was due to her based on the Foreclosure surplus case. Therefore, it is important to hire a qualified Foreclosure Surplus attorney and not hire some third-party company who may not know the proper rules or case law, or even try to claim the funds yourself. With a qualified Foreclosure Surplus attorney in your corner, I will fight for every penny of your surplus funds.

If you If you think you may be entitled to foreclosure surplus funds in Florida, please call my firm and I will personally give you a free consultation. I handle foreclosure surplus cases in every county in Florida. And I don’t get paid unless you do.

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