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Florida Tax Deed Surplus Funds - Is the Homeowner’s Association entitled to the Surplus Funds from the Tax Deed Sale?

I have previously discussed the possibility that a Homeowner’s Association (HOA) cannot recoup lost assessment fees after a Florida Tax Deed Sale. This is due to Florida Statute 197.552, which states, “ Except as specifically provided in this chapter, no right, interest, restriction, or other covenant shall survive the issuance of a tax deed, except that a lien of record held by a municipal or county governmental unit, special district, or community development district, when such lien is not satisfied as of the disbursement of proceeds of sale under the provisions of s. 197.582, shall survive the issuance of a tax deed.” However, there are a few instances where the HOA may be able to claim some or all of those Florida Tax Deed Surplus Funds instead of the prior homeowner.

Generally, Florida Statute 720.3085 controls the ability of HOA’s to claim liens for past due assessments. This statute lays out the specific process that an HOA must go through to record a lien based on those unpaid past due assessments. Many HOA’s will argue that this statute takes precedence, and they should be able to claim the surplus funds based solely on the lien they have recorded. However, a Second District Court of Appeal in 2013 decided in the case of Cricket Props, LLC v. Nassau Point at Heritage Isles HOA, Inc. that Florida Statute 197.552 controlled over Florida Statute 720.3085 and that the assessments won’t survive the issuance of a tax deed. But this is not necessarily the end for the HOA’s claim.

If there are Florida Tax Deed Surplus Funds remaining from the tax deed sale of the property, the HOA may be able to retrieve a portion of the unpaid assessments if they follow some very specific rules. First, there must be surplus funds remaining. Second, the Clerk of Court must identify the entities that may have a claim and mail out notices to those entities notifying them of the funds that are being held for their benefit as described in Florida Statute 197.522(1)(a). If the HOA has recorded its claim of lien for the subject property, they will receive this notice from the Clerk of Court. The notice should give instructions on how they can make a claim for those Florida Tax Deed Surplus Funds. This statement must be notarized and submitted within a very specific amount of time, or it will be barred.

But this is not necessarily the end for the HOA. There was a Fourth District Court of Appeals case from 2017 called Calendar v. Stonebridge Gardens Section III COA, Inc. where the Court decided that a statutory lien is created by Florida Statute 718.116(5)(a). This states that, “the association has a lien on each condominium parcel to secure the payment of assessments.” It further states, “the lien is effective from and shall relate back to the recording of the original declaration of condominium.” This creates a statutory lien against the property and doesn’t necessarily need to be recorded. Granted, this is for a Condo Association and not a Homeowner’s Association, but they are essentially the same and I use would caution because this could be used to claim those Florida Tax Deed Surplus Funds if your attorney doesn’t know what he/she is doing.

Hiring a qualified attorney who knows and understands what you are up against when it comes to claiming your Florida Tax Deed Surplus Funds is crucial to maximize the amount of Surplus Funds you could receive. This is why I always caution potential client to never sign up with one of those third-party recovery companies. They don’t know and understand the nuances of the law like I do.

If you have received a notice from the Clerk of Court that you may be entitled to Florida Tax Deed Surplus Funds, give me a call for a free consultation. I handle Tax Deed Surplus and Foreclosure Surplus Funds in every County in the State of Florida, and I don’t get paid unless you do.

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