Can there be Foreclosure Surplus Funds after a Homeowners’ Association Foreclosure Auction?

small house model with house keys

In this blog, we will be discussing a question that I’ve been receiving more and more each day. That question is whether Florida surplus funds can result from a Florida Homeowners’ Association (HOA) foreclosure action. The short and simple answer is yes. The reason for this is because the process for a Florida HOA to foreclose on a Florida property is not too different from that of a Mortgage foreclosure action. The major difference between the types of actions is that a Homeowners’ Association is considered a secondary lienholder while a mortgage company is typically the primary lienholder, especially when it is the main, or primary, mortgage for the subject property. Therefore, since the foreclosure processes for HOA foreclosure are similar to that of mortgage foreclosures, the same statutes defining surplus funds are applied. Florida Statute 45.032(1)(c) defines surplus funds as “the funds remaining after payment of all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements.”

For example: If a final judgment of foreclosure is entered against a Florida property in a Florida HOA foreclosure action in the amount of $25,000, and the property is sold at foreclosure auction in the amount of $100,000, then there will be a surplus of funds in the amount of $75,000 available to be claimed! The cause for this is due to third-party bidders, or purchasers, getting into a bidding war for a certain property that results in the final bid going over the amount owed according to the Final Judgment that was entered.

As such, Florida Statute 45.032(2) states that “[t]here is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds.” The “owner of record” is defined by Florida Statute 45.032(1) as “the person or persons who appear to be owners of the property that is the subject of the foreclosure proceeding on the date of the filing of the lis pendens.” Thus, meaning that the former homeowner(s) of a Florida property sold at a Florida HOA foreclosure auction are entitled to filing a claim for the surplus funds that are available. A word of warning to these former homeowners — if you are contacted by a Third-Party Surplus Funds Recovery Company looking to “assist” you with the recovery of your surplus funds, please DO NOT sign anything until you have consulted with an experienced Florida Surplus Funds Recovery Attorney. By speaking with an experienced attorney, you can gain a better understanding of our rights as they pertain to said surplus funds.

If you’re reading this and your property has been sold at Florida HOA foreclosure auction, 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 Florida foreclosure surplus funds.

At Haynes Law Group, P.A., we have experienced attorneys who are well-versed in the Florida statutes governing Florida homeowners’ claims to Florida foreclosure surplus funds and have helped to recover millions 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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