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Florida Foreclosure Surplus Funds: Third-Party Purchasers and Homeowners Association Foreclosure Sales

Lately, I’ve been receiving numerous calls from Third-Party Purchasers who have purchased a Florida property at a Florida Homeowners’ Association (HOA) foreclosure sale that resulted in surplus funds. During these calls, I’m almost always told by the Third-Party Purchaser that they did not know that there was also a mortgage attached to the property (which most of the time is also foreclosing on the subject property). Next, I’m asked by the Third-Party Purchaser whether the surplus funds from the HOA foreclosure matter can be applied to the debt owed to the subject mortgage. The answer to this is no — according to case law and Florida Statute 45.032(2), “there 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” when it comes to foreclosure actions is defined by the same statute 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.” Therefore, the “Owner of Record” in both the HOA foreclosure action and mortgage foreclosure action would be the former homeowner not the Third-Party Purchaser from the HOA foreclosure auction. As such, the Third-Party Purchaser is not entitled to any portion of the HOA foreclosure surplus funds and the Court is not required to apply said funds to a separate, unrelated, action to settle the debt.

Moreover, let it be known that should the subject property (now owned by the Third-Pary Purchaser) turnaround and get sold at a mortgage foreclosure auction and there be surplus funds available, then the Third-Party purchaser will not be entitled to these funds either (according to Florida Statute). Thus, if you are a Third-Party Purchaser considering the purchase of a Florida property at a HOA foreclosure auction, then I strongly implore you conduct a title search for the subject property to ensure that you don’t find yourself in a difficult position.

If you are reading this as a former Florida Homeowner whose home has recently been sold at either a Florida HOA or mortgage foreclosure auction and would like to know if there are surplus funds available for you to recover, 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 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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