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Florida Foreclosure Surplus Funds - What Does “Owner of Record” Mean?

For some reason there seems to be a bit of confusion as to who is an “Owner of Record” at the time of the filing of a lis pendens when it comes to making a claim for Florida Foreclosure Surplus Funds. This language comes from Florida Statute 45.033(1), which states, “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 lienholders who have timely filed a claim.” This has been misinterpreted many times over the years to mean someone who has purchased the property after the foreclosure sale or even someone who has purchased the property during the foreclosure case.

A “lis pendens” is a Latin term meaning “lawsuit pending”. This is something that is filed at the very beginning of the foreclosure lawsuit along with the Complaint against the homeowner(s). The owner is the person who is listed on this lis pendens when the case is filed. However, many parties who are after those Surplus Funds only look at the term “owner” and can bind up the process of the true original owner receiving the Florida Foreclosure Surplus Funds. Also, the term “rebuttable presumption” means that if there is someone other than the original owner of the property wanting to receive those Surplus Funds, they must prove to the court by some sort of either voluntary or involuntary transfer of ownership rights.

An involuntary transfer would be if the original owner has died and there are heirs. The heirs would be the presumptive owners of the property by rights of inheritance. On the other hand, a voluntary transfer of ownership would be by assigning your rights over to a surplus recovery company. This is never a good idea. The reason it is a bad idea to sign over your surplus ownership rights is because you no longer have a say in the recovery of those funds. The surplus recovery company is now only looking out for their own rights, not yours.

Lastly, there have been court cases where a court has erroneously turned over the Florida Foreclosure Surplus Funds to (1) a third-party purchaser, and (2) a mortgagee. These cases will almost always get overturned upon appeal, but it can be a lengthy and expensive process. When it comes to a third-party purchaser, they purchased the property at the foreclosure sale and have realized they overpaid for the property and feel like they can get some of their money back. This is not the case though. It has been well established that there is no “case law governing distribution of surplus foreclosure sale proceeds [or] a mechanism authorizing a third-party purchaser to obtain the surplus.” Pineda v. Wells Fargo Bank, N.A., 143 So. 3d 1008 (Fla. App. 2014).

When it comes to a mortgagor, there have been cases where there was some sort of agreement between the mortgagee (lender) and mortgagor (owner) that states the owner agrees to pay the lender for past due taxes, repairs, or some other fees. However, without an agreement stating that the owner is voluntarily transferring his/her rights to the surplus funds to the lender, the court will not be able to distribute those funds to the lender. And if it does, then it would be overturned upon appeal.

If you are unsure if you are due Florida Foreclosure Surplus Funds and want to know what your ownership rights to those funds might be, please give me a call for a Free Consultation. I handle Foreclosure Surplus Funds in every County in the State of Florida. I take these cases strictly on a Contingency Fee, which means I only get paid when I retrieve those surplus fund for you.

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