Sale of a property due to Florida Foreclosure or Tax Deed Sale is never good news. However, when combined with divorce (dissolution of marriage), the process can be even more stressful. If there are any Surplus funds from this sale of the property, how is this divided between divorced or divorcing parties? Here is what you can expect.
The process of the foreclosure or tax deed sale are basically the same. The property goes to public auction and once the lienholders and subordinate lienholders (if any) are paid off, any surplus goes to the “owner of record” at the time of the filing of the lis pendens. This means that the person(s) named on the deed of record at the time of the foreclosure filing would be the recipient(s) of the surplus funds, if there are any, once all subordinate lienholders have been paid.
During a divorce, sometimes one party or the other will be entitled to keep the property, and therefore the surplus funds from the foreclosure or tax deed sale. As long as it is stated in the final dissolution of marriage paperwork that is signed by the judge, then it can be considered an assignment of rights to the surplus funds. According to Florida Statute 45.033 (1), A person claiming a legal right to the surplus as an assignee of the rights of the owner of record must prove entitlement to the surplus funds pursuant to this section.” As discussed above, the assignment of rights could be done through the final dissolution paperwork.
Sometimes as part of a divorce the two parties can come to an agreement as to who can receive the proceeds. This is generally worked out during mediations between the parties and their respective attorneys. If there is a proper agreement between the parties either with or without a court order then the assignment will be upheld, and the surplus funds will be distributed to the proper party. If there has been no agreement, then the deed that was on record at the time the foreclosure case was filed or at the time the tax deed sale was initiated will control who gets the proceeds.
If you are going through divorce or have already completed a divorce and you had property that was sold with surplus funds pending, give me a call at the Haynes Law Group, P.A. The most important thing to remember, if you believe you have surplus funds owed to you from either a Tax Deed Sale or a Foreclosure Sale, is to hire a qualified attorney who will work to get the maximum amount of that surplus. I handle Tax Deed Surplus and Foreclosure Surplus case in every county in the state of Florida. Please give me a call for a free consultation and I don’t get paid unless you do.