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Florida Foreclosure Sale Surplus Funds - When There Are Competing Foreclosure Cases, Who Gets the Surplus Funds?

I handle Foreclosure Sale Surplus Funds all over the State of Florida. On occasion, I have a client who has had two different foreclosure cases for the same property happen within months of each other. One was a foreclosure case from his Homeowner’s Association (HOA) and the other was from his Mortgage lienholder. To understand how the Florida Foreclosure Sale Surplus Funds would be distributed, you have to look as to the timing of each case.

Yes, there can be more than one foreclosure case going against a person and their property at the same time. Each lienholder has the right to file for foreclosure if they have not been paid in a timely manner, and occasionally this happens. The most important aspect of these multiple cases is who is a superior lien holder and who is a junior or subordinate lienholder. The reason why this is so important, is if a superior lien holder, such as a mortgage holder, completes their foreclosure case before any other lienholders have, then those subordinate lienholders must get their lien satisfied from the Florida Foreclosure Surplus Funds (if any) from that superior lienholder’s sale, and the subordinate liens are extinguished.

However, if a subordinate lienholder, such as a Homeowner’s Association completes its foreclosure case before a superior lienholder, the superior lienholder’s lien is not extinguished, and the superior lienholder cannot receive any of the surplus funds from a subordinate lienholder’s foreclosure sale. The superior lienholder always has the opportunity to come back and file its own foreclosure case and they often do.

Currently, I represent a client in a Florida Foreclosure Sale Surplus Funds case where a HOA has already foreclosed on the property, and it was sold at auction. This means their lien was satisfied by this foreclosure sale. Florida Statute §45.031(6) states, “When the certificate of title is filed the sale shall stand confirmed, and title to the property shall pass to the purchaser named in the certificate without the necessity of any further proceedings or instruments.” This means that after the sale of the property happens, the new owner now takes possession of the property and is liable for any future assessment or liens by (in this case) the HOA. However, the HOA has now requested some of the Florida Foreclosure Sale Surplus Funds from the mortgage lender’s foreclosure sale, even after their lien was satisfied towards my clients.

Of course, I have filed a motion to strike their motion for surplus funds because any new claims of liens they have on the property should be against the person or entity who purchased the property at the HOA’s foreclosure sale. They cannot now come back and ask for more money from the original owner of the property. Had I not been retained in this case, it is likely this HOA could receive their request out of pure deception. This is why I always recommend that you hire a competent and experienced Florida Foreclosure Sale Surplus or Florida Tax Deed Surplus Funds Attorney to handle your case. The HOA is asking for past due assessments from after their lien against my client was already satisfied. They are no longer a subordinate lienholder against my client and therefore cannot claim those surplus funds.

Florida Foreclosure Surplus Funds cases can be extremely complicated, and it is important to have someone on your side. It may be necessary to hire an experienced attorney to represent you and make sure you get the most of your surplus funds. If you have a Foreclosure Surplus Funds case in the State of Florida, please give me a call for a free consultation. I can advise you the best way to handle your case based on your unique facts. I handle Foreclosure Surplus Funds and Tax Deed Surplus Funds cases in every County in the State of Florida, and I don’t get paid unless you do.

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