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How Does a Government Lien Affect My Florida Tax Deed Foreclosure Surplus?

In the course of helping clients retrieve their Florida Tax Deed Foreclosure Surplus Funds, many clients are wondering what a Government Lien is and if there is anything we can do about it. First, a government lien is generally a Federal Tax Lien that is different from the Property Tax Lien that is causing the property to be sold in the first place. The IRS defines a Federal Tax Lien as, “the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets.”

This means that they have to record the lien on your property the same as any other creditor. Once it has been recorded, it puts all other creditors on notice that there is an encumbrance on your property. However, once the lien is on your property, the federal government doesn’t have to follow the same rules as other creditor liens. Florida statute 197.852(7) states, “A holder of a recorded governmental lien, other than a federal government lien or ad valorem tax lien, must file a request for disbursement of surplus funds within 120 days after the mailing of the notice of surplus funds.” This means that the Federal government can collect any surplus funds from the clerk even if it is outside of the 120 day guidelines in the statute. Other lienholders have only the 120 days to make a claim or they are barred from making it on the 121st day. The statute goes on to say that the Clerk or Comptroller “must” disburse payments to governmental entities before any other claimants.

Additionally, there are some lienholders whose liens are extinguished by the Florida Tax Deed Sale. These would be assessment liens from a Homeowner’s or Condo Owner’s Association. This is considerably different from regular Florida Foreclosure Surplus, where those liens are not extinguished.

What can you do to protect those Florida Tax Deed Sale Surplus Funds? One way is to negotiate with the IRS to pay a smaller amount to satisfy the lien. Once the Federal Tax Lien is satisfied, you will be able to get more of those surplus funds from the sale. Beyond that, it is extremely important to hire a qualified Florida Tax Deed Surplus Attorney who knows every aspect of the law and regulations surrounding the Surplus. I handle Tax Deed and Foreclosure Surplus in the State of Florida and I can guide you as to what to expect from your potential surplus refund.

If you believe that you or a deceased family member may be entitled to Florida Tax Deed Surplus Funds, please give me a call for a free consultation. I handle Tax Deed Surplus and Foreclosure Surplus funds all over the State of Florida, and I don’t get paid unless you do.

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