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Florida Tax Deed Sale Surplus - Who Gets Paid First From the Surplus Funds?

In dealing with Florida Tax Deed Sale Surplus Funds cases, who gets paid first and how can I make sure I get my client the most out of those Surplus Funds? This can be a bit tricky if there are lots of parties involved, including Homeowner’s Associations, Government Entities, Former Owners, and other Lienholders. Luckily, the Florida Statutes are pretty clear. Florida Statute 197.582(2)(a) states that if the property is purchased at the Florida Tax Deed sale, “for an amount in excess of the statutory bid of the certificateholder, the surplus must be paid over and distributed by the clerk as set forth in subsections (3), (5), and (6).” The persons mentioned in those subsections are to be notified by the Clerk of Court by mail.

Subsection (3) of this statutes states that a person receiving the notice from the Clerk has 120 days from the date of the notice to file a written claim. This seems to mean that anyone who was given notice has only 120 days to make a claim. However, subsection (5) states that “except for claims by a property owner, claims that are not filed on or before close of business on the 120th day after the date of the mailed notice… are barred.” This means that the property owner has more than the 120 day deadline to make a claim, but all other claimants must have their claims in no later than 120 days or they are barred from making any claim at all. Subsection (6) also states that the failure of someone “other than the property owner, to file a claim for surplus within the 120 days constitutes a waiver of all interest in the surplus funds and all claims for them are forever barred.”
Seems pretty simple. However, the statute continues with subsection (7) that 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 implies that even certain governmental liens will be barred unless they are “federal governmental” or “ad valorem tax” liens. This is a major distinction from other governmental liens because it specifically states that governmental liens other than federal governmental liens must be must file their request within 120 days. Even though it specifically states it in the statute, this is difficult to get past a judge.

This gets pretty complicated, especially when there are multiple subordinate lienholders. It is usually necessary to have an evidentiary hearing to determine the order in which these lienholders get paid, as well as whether or not some of these liens even survive a Florida Tax Deed Foreclosure Sale.

In order to protect yourself, I highly recommend someone hiring a qualified Florida Foreclosure and Tax Deed Surplus Attorney. Give me a call to discuss the unique facts surrounding your case I can help to determine the best way to get you the most of your Florida Surplus Funds. I handle Foreclosure Surplus and Tax Deed Surplus cases in every County in the State of Florida, and I don’t get paid unless you do.

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