I occasionally get calls from potential clients who have lost their home to Foreclosure and they want to know if there are any Florida Foreclosure Surplus Funds available if the Lender or their Homeowner’s Association retained the property after the sale. The short answer is no.
Florida Statute 45.033 states in relevant part, “There is established a rebuttable presumption that the owner of record of real property on the date of the filing of a lis pendens is the person entitled to surplus funds.” This seems pretty straight forward. This statute means that the person who owned the property at the time the lis pendens (lawsuit) was filed, gets any surplus funds that are remaining after all other parties that made a timely claim have been paid. The other parties would be any subordinate lienholders.
I just had a call today with two inexperienced attorneys who were trying to get those Florida Foreclosure Surplus Funds for their client because the property was sold at a foreclosure auction. However, when I looked up the case, the property wasn’t sold. It was retained by the Homeowner’s Association because the highest bidder didn’t come up to the minimum amount the association required. If the bids weren’t at least to that minimum, then the party who filed the foreclosure claim can retain the property. In this case it was the association. In other cases it is the Bank that retains the property if they were the ones to foreclose. Then the attorneys asked me if the association then sold the property for more than what their client owed, wouldn’t that mean there was a surplus? No, it doesn’t.
At this point, the association now owns the property and can sell it for as much or as little as they want because the foreclosure auction is over. This is also the case if your lender (bank) keeps the property after the foreclosure sale. They own it and can sell, and the former owner gets nothing. Surplus funds come from a Foreclosure Auction. Only if the property sells at auction, for more than what was owed to the lienholder, will there be any Florida Foreclosure Surplus Funds.
This is why it is extremely important to, at the very least, have a consultation with an experienced and qualified Florida Foreclosure Surplus Attorney. If those attorneys had tried to make a claim for surplus funds for their client, they would have been sadly disappointed in finding out that there were none to be had. They would not only have wasted their time and the court’s time but would have given their client hope when there wasn’t any.
If you are unsure as to whether you have Florida Foreclosure Surplus Funds coming to you from either a Lender’s Foreclosure Sale, Homeowner or Condo Owner’s Association Foreclosure Sale, or even from a Tax Deed Foreclosure Sale, please give me a call for a free consultation. I handle Foreclosure Surplus funds and Tax Deed Surplus funds in every County in the State of Florida, and I don’t get paid unless you do.