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Florida Foreclosure Sale Surplus Funds – Can a Third-Party Purchaser Vacate the Sale and Get Their Money Back?

I have received recent calls from people who have lost their homes to foreclosure, or their deceased relative lost the property to foreclosure. However, they have found out there are thousands of dollars they might be due in Florida Foreclosure Sale Surplus Funds. This can be a very good “silver lining” to an otherwise sad occurrence. But what happens if the new owner (third-party purchaser) decides they want to vacate the foreclosure sale? What happens to the surplus funds? If they are successful, it would mean the property goes back to the prior owner and the third-party purchaser gets their money back leaving no surplus funds. How can this happen?

At the time of the auction, the winning bidder usually has to put a deposit down. If they don’t complete the purchase by remitting all of the funds for purchase to the clerk by a certain time, then the Clerk will issue a Certificate of Incomplete Sale. Florida Statute 45.031(3) states that “the deposit shall be applied to the sale price at the time of payment. If final payment is not made within the prescribed period, the clerk shall readvertise the sale as provided in this section and pay all costs of the sale from the deposit. Any remaining funds shall be applied toward the judgment.” If this happens, then there would be no Florida Foreclosure Sale Surplus Funds… yet. The sale has to be scheduled again, but by Florida Statute, the deposit is kept by the Clerk and a portion of it could be applied to the balance of the final judgment of foreclosure.

But what happens if the third-party purchaser makes the full payment to the clerk and then decides he want to back out of the purchase? Florida Statute 45.031(5) states that a party must file an objection within ten days after the issuance of the certificate of sale. Also, the objection can’t just be a general objection. According to the Second District Court of Appeals in a case called Gavidia v. Specialized Loan Servicing LLC in 2020, the objection to the sale must specify “there were any irregularities of the sale itself.” The Florida Supreme Court has stated that “on the question of gross inadequacy of consideration, surprise, accident, or misstate, and irregularity on the conduct of the sale,” the judicial sale may, “on a proper showing made, be vacated and set aside.” But this is a high standard to meet. Inadequacy of consideration must be accompanied by proof of fraud on the part of one of the parties. Surprise, accident, or mistake must be proven that either the buyer didn’t know what they were buying or that they didn’t know they were buying anything at all. Irregularity in the conduct of the sale must also be proven, showing something with the way the sale itself was conducted was wrong and should have not been conducted at all. The third-party purchaser cannot simply state they didn’t know about other liens, or they made a “mistake”. This goes to the old rule of “caveat emptor” or “let the buyer beware”. A third-party purchaser must do their due diligence to research the property to see if there are any other liens.

If these high standards are met and the foreclosure sale is vacated, then the court will usually set a new sale date and the property will be sold at auction again. Often though, the third-party purchaser will not be able to get the sale vacated and you will be entitled to your Florida Foreclosure Sale Surplus Funds. Whichever happens, it is important to have a highly knowledgeable Florida Foreclosure Sale Surplus Funds lawyer on your side. It is also important to act very fast to make any objections to any motions to vacate the sale by the third-party purchaser.

If you or a deceased loved one has lost a property to Foreclosure anywhere in the State of Florida and you believe you have Surplus Funds coming to you from that sale, please give me a call for a free consultation. I can help you to figure out the best course of action to protect those funds and get you the maximum you have coming to you. I handle Foreclosure Sale Surplus and Tax Deed Sale Surplus Funds in every County in the State of Florida. And I don’t get paid unless you do.

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