How do you know if a subordinate lienholder is made a timely claim in your Foreclosure Surplus case?

When we are handling a foreclosure surplus case, many times we have found that a Subordinate Lienholder’s claim has not been made timely. When we find something like this, we are obliged to make sure that this untimely claim is stricken in order to make sure our clients receive the maximum amount of their Surplus Funds.

The subordinate lienholder must file a timely claim in order to receive any portion of the foreclosure surplus funds. According to Florida Statute 45.032(3)(a), “If the owner of record claims the surplus before the date that the clerk reports it as unclaimed and there is no subordinate lienholder, the court shall order the clerk to deduct any applicable service charges from the surplus and pay the remainder to the owner of record.” The subordinate lienholder must file its claim after the certificate of disbursements has been filed and before the stated time period has run, or it is not timely. If it is not timely filed, then the subordinate lienholder is barred from making its claim and gets nothing.

In 2015, the case of Saulnier v. Bank of America, N.A., the Fourth District Court of Appeal of Florida found that a subordinate lienholder that filed a claim after the stated number of days had run on the notice, and that the subordinate lienholder was barred from their claim. In this case, the subordinate lienholder filed an untimely claim and stated that they had not received service of the original notice from the Clerk of Court. This subordinate lienholder stated they were not provided with the final judgment nor the certificate of disbursements and therefore did not have notice or an opportunity to file a claim. The lower court agreed and disbursed the funds to the subordinate lienholder.

However, the appeals court reversed that decision stating that the plain language of Florida Statute 45.032(1)(a) requires that a subordinate lienholder claiming a right to surplus must file a claim no later than (or within) number days stated on the notice after the sale. This statute also warns that if the subordinate lienholder fails to file a timely claim, then the subordinate lienholder will be barred from making a claim. The appeals court, in reversing the decision of the lower court, was able to grant the surplus funds back to the original homeowner. The court found that even if the subordinate lienholder did not receive an actual copy of the certificate of disbursements, the Clerk of Court posted it on the online docket and the subordinate lienholder had received constructive notice that way. They also found that there is nothing in the statute that allows for anything other than the timeframe stated on the notice and if the subordinate lienholder goes beyond that stated timeframe, they are barred from their claim.

What is “constructive” notice though? This means that the person to be served got notice even though actual notice was not personally delivered to them. Generally, a party to a case is given notice through email, regular mail, or through a process server handing the documents to them. In the above case, the court found that the subordinate lienholder did or should have received a copy of the notice and final judgment through email. However, even if they didn’t, these documents were posted on the court’s online docket and as a party to the case, they should have known about the documents filed by the Clerk. Because the subordinate lienholder should have known of the documents filed by the Clerk, and they filed for their claim after the time period had run, then their claim was barred by the statute.

If you believe you or a family member may be entitled to Surplus Funds, have received a letter from the Clerk of Courts stating you might be entitled to Surplus Funds, or have been contacted by a company that claims you might be entitled to Surplus funds, do not hesitate to reach out to our firm. I handle Foreclosure Surplus and Tax Deed Surplus cases in every county in the State of Florida. I will be happy to give you a Free Consultation to find out for sure whether you are entitled to a Tax Deed Surplus. And if you are to receive those funds, I will make sure you get the maximum amount you are entitled to. And I don’t get paid unless you do.

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