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Florida Tax Deed Foreclosure Sale Surplus Funds – Why Might You Have to Wait 120 Days Before You Get the Surplus Funds?

Many of my clients and potential clients want to know why they may have to wait 120 days (four months) before the Clerk of Court will release the Florida Tax Deed Sale Surplus Funds to them. This is considerably different from Florida Foreclosure Sale Surplus Funds where often we are able to get the funds as soon as we can get a hearing set, which can be just a few short weeks. The reason for the difference and the long timeframe for tax deed sales is because of Florida Statute.

Florida Statute 197.582 (3), states in part that any potential lienholder is required to file a claim with the clerk for the surplus proceeds within 120 days from the date on the notice from the Clerk. Florida Statute 197.582 (5) further clarifies this and states in part that if a person, other than the property owner, fails to file such a claim in a timely manner, they are barred from receiving any disbursement of the surplus funds. Florida Statue 197.582 (4) lays out very specific ways that someone can make a claim to the surplus funds and if this has not been followed to the letter of the law, it acts as a waiver of interest to those funds.

Often the clerk of court (depending on the county) won’t even look at a request for surplus funds until that 120-day deadline has passed. They want to give time to any potential creditors to make a claim. The other side of this coin is a foreclosure sale case, where if a creditor has been defaulted and has not made a claim despite being noticed of the surplus hearing, the court will often just allow the claimants to receive the funds. This is not always the case, but it is more often than not.

The reason the clerk will not even look at a claim for Florida Tax Deed Foreclosure Sale Surplus until the 120-day term is passed is that the clerk is tasked with being the final word as to who gets these funds. Florida Statute §197.582(6) gives the clerk the ability to file the interpleader action in circuit court within 90 days after the 120-day claim period expires. The clerk of courts is charged with the duty of holding and disbursing any surplus funds it receives as the result of a tax deed sale. Due to this, they will not allow for funds to be disbursed to someone they believe is not eligible to receive them. An interpleader is a complaint where the clerk’s attorney will lay out all of the facts stating who is the person or potential heir who is entitled to the surplus funds and why they believe the person making the claim is not eligible or may not be the only one eligible for the funds.

When there are surplus funds from a Florida Tax Deed Foreclosure Sale, the Clerk will send out a letter called, “Notice of Tax Deed Sale Surplus” to any parties it believes are due the funds. On this letter, it states that “you must file a notarized statement of claim with this office within 120 days of this notice.” It then says in bold letters, “The failure of a lienholder to fila a claim for surplus funds within 120 days of this notice constitutes a waiver of the lienholder’s interest in the surplus funds and all claims thereto are forever banned.” Of course, this doesn’t mean you have to make a claim in 120 days. You always have the right to the funds, but if you don’t claim them within a year, they go to the Florida Unclaimed Property Division of the Secretary of Treasury. However, you should just make a claim as soon as you can. I can help.

If you or a deceased family member are owed surplus funds from either a Tax Deed sale or a Foreclosure sale of your property, please give me a call for a free consultation. I will explain the basic timeline and help to make sure you get the most of the surplus funds you may have coming to you. I handle Tax Deed Sale and Foreclosure Sale Surplus cases in every county in the State of Florida, and I don’t get paid unless you do.

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