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Florida Tax Deed Foreclosure Surplus Funds: Subordinate Lienholders

Recently, I’ve been discussing the subject of Subordinate Lienholders and how they can affect a former Florida homeowners’ claim to mortgage foreclosure surplus funds. Today, we will be discussing whether Subordinate Lienholders can affect a former Florida homeowners’ claim to surplus funds that are the result of a Tax Deed Foreclosure Sale.

First and foremost, Florida tax deed foreclosure sales are the result of a Florida homeowner becoming delinquent on their property tax. In Florida, when a homeowner becomes delinquent on their property tax the county in which the property tax is owed can sell what is known as a tax certificate. A tax certificate can be sold to the public. Once a tax certificate is purchased, then a tax lien will be placed on the subject property and the Florida homeowner will have “2 years after April 1 of the year of issuance of the tax certificate,” according to Fla. Statute 197.432(13), to pay off the back-owed taxes. Otherwise, after the 2 years, the tax certificate holder will be able to apply for a tax deed to initiate a tax deed foreclosure sale of the subject property.

Once a Florida property is sold at a Florida tax deed foreclosure auction the Clerk will determine whether there are surplus funds available based on the purchase price of the subject property, the delinquent taxes that were owed, and whether there are any governmental subordinate lienholders. Unlike in mortgage foreclosure auctions the only liens that survive a tax deed foreclosure auction are governmental liens. Florida Statute 197.552 clearly states, “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.” Therefore, liens created from a first mortgage, second mortgage, homeowners’ association, construction company etc. will not survive a tax deed sale. Thus, these lienholders will not be able to file a claim for surplus funds, if available. On the other hand, governmental lienholders with a valid lien on the subject property will be able to file a claim for surplus funds that may be available as long as their claim is filed within the 120-day deadline imposed by Fla. Statute 197.582(5).

For example: If the back-owed taxes on the subject property are in the amount of $15,000 and the subject property is sold at a Florida Tax Deed Foreclosure auction in the amount of $100,000, then there will be a surplus of funds in the amount of $85,000 for the former Florida homeowner to claim as long as there are no governmental lienholders. If there are governmental lienholders and they have filed a timely claim, then they will be entitled to a portion, or the entirety, of the surplus funds that are available depending on the amount owed to satisfy the lien.

When it comes to filing a homeowner’s claim for Florida tax deed foreclosure surplus funds, I strongly advise speaking with an experienced Florida foreclosure surplus funds recovery attorney as the claim filing process is not always so simple nor is it always clear whether there are surplus funds available to be claimed. If you are a former Florida homeowner looking to recover surplus funds after the recent tax deed foreclosure sale of your Florida property, then please give me a call and I will personally give you a free consultation. During our consultation, I will confirm whether there are surplus funds available to be recovered as well as answer any questions that you may have. If there are surplus funds available to be recovered, then I will also provide you with a personalized strategy as to how we can assist you with the recovery of YOUR surplus funds.

At Haynes Law Group, P.A., we have experienced attorneys who are well-versed in the Florida statutes governing former Florida homeowners’ claims to Florida tax deed foreclosure surplus funds and have helped to recover hundreds of thousands of dollars for former Florida homeowners. We represent former homeowners all over the state of Florida no matter which county they are in and will work tirelessly to ensure that you receive the Gold Standard of Legal Service.

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