As many are aware, Florida Statute 45.032 and Florida Statue 45.033 were ratified to extend the time frame for a subordinate lien holder to claim surplus funds. This time frame was extended from 60 days to one year after the foreclosure sale. This only applies to sales on or after July 1, 2019. As applied, how has this impacted former owner’s claims for surplus funds?
First off, it is obvious the big banks lobbied the Florida Legislature to change this law. The 60 day time frame was a great idea. It helped homeowners move on with their lives, and it still gave lien holders the opportunity to get paid their lien. Yet, it mandated due diligence from the parties. Now, banks and home owner associations have an entire year to claim the funds.
The whole reason for having the 60 day timeline was for homeowners to be able to get any of their equity they had in their home and reinvest it in their new home. Now, they have to wait an entire year. Let me give you a specific example of this impact:
I currently have a client that has a surplus in Osceola county for over $100,000.00. She paid on her mortgage for 27 years and then had some major medical issues. Therefore, her home, which only owed around $17,000.00 for the mortgage, went to a foreclosure sale.
There is only one lien in this case, a home owners association. This association has not filed a specific lien, but every association is named in a foreclosure lawsuit because of their restrictive covenants and declarations in their bylaws. My client now has to move out of her house but with this new law, may have to wait the entire year from now to get these funds, which is ridiculous.
My job, to circumvent this one year time line for her. I have filed a motion to disburse Florida surplus funds and elaborate in my motion as to why the one year timeline should not apply. In fact, one of my biggest arguments moving forward is that if a subordinate lien holder party is defaulted in the foreclosure case, that they are not entitled to claim the surplus funds after the sale. While this argument is directly contradicted by former specific case law, that specific case law was implemented before the year timeline was implemented.
I look forward to helping owners all of the state of Florida claim their surplus funds even after the new law change, even if that requires appeals and arguments to change/make new law. Specifically, our arguments will be based on Florida Civil Procedure.
If you have a foreclosure surplus funds case in Florida and would like a free consultation, please call me today. I am a Florida foreclosure surplus funds attorney that handles surplus cases in any county in Florida.