Florida Foreclosure Sale and Tax Deed Sale Surplus Funds – Who is Entitled to the Surplus Funds if the Former Owner of the Property is Deceased?

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I have recently received some calls from family members of deceased homeowners who lost their property to Foreclosure. In all of these cases, there were Florida Foreclosure Sale or Tax Deed Sale Surplus Funds, but the person I spoke to didn’t know if they were eligible to receive the funds. If someone dies and their property is lost to foreclosure sale, what relatives (if any) are eligible to receive those funds?

Florida Statute §45.033(1) states, “There is established a rebuttable presumption that the owner of record of real property on the date of filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” This means that the person(s) who owned the property when the foreclosure case first started is the person(s) who would be eligible to receive the surplus funds. What if that person is deceased? Who gets the funds now? Florida Statute, 45.033(2)(b) states, “An involuntary transfer or assignment may be as a result of inheritance.” This means that due to your lineal relationship with the deceased, you should be able to receive the Florida Foreclosure Sale Surplus Funds without a probate. Florida follows pretty specific rules of intestate succession (meaning without a will).

First, if there was a spouse of the deceased party, everything goes to the spouse unless the deceased had children from another relationship and then the spouse gets fifty percent and those children from the other relationship split the other fifty percent. Children common to both the deceased and the spouse don’t receive anything as they would inherit from the remaining parent upon his/her death. Stepchildren are not eligible to inherit at all unless they have been legally adopted by the deceased stepparent. Legally adopted children are viewed by the State of Florida the same as if they were blood related.

Next, if there is no spouse and no children (or grandchildren, etc.), then the deceased person’s parents would inherit. If his/her parents are also deceased, then his/her siblings will inherit the Florida Foreclosure Sale Surplus Funds, or nieces/nephews (or great-nieces/great-nephews), etc., if the siblings are also deceased. If none of these are living then we go back to the deceased’s parents and see if there are any uncles/aunts and their children available. Seems kind of complicated, but that is why it may be necessary to hire an attorney. The more complicated the family tree, the greater the possibility of the court requiring a probate to be done on the estate. A probate will determine the exact heirs who are eligible for the funds or any other property there may be. It isn’t always necessary to do a probate, but if the court requires it, it is best to go ahead and hire an attorney.

This is basically the same when it comes to Tax Deed Sale Surplus Funds. However, it is usually the Clerk of Court for your county that will determine if a probate is necessary. The Clerk is tasked with the distribution of surplus funds from tax deed sales and if they feel the wrong people are claiming the funds or if they feel some family members are being left out, they will file what is called an Interpleader into the case and force a probate (if necessary) before releasing any of the funds. When the Clerk files an Interpleader, this means that they believe there is some deficiency in any claims that have been made and they will point them out to the court for consideration. It is up to you or your attorney to argue your position that you should receive these Florida Tax Deed Sale Surplus Funds, and not some other potential party to the case.

If you believe you are entitled to Florida Foreclosure Sale Surplus or Tax Deed Sale Surplus funds because you are the heir of a deceased party, please give me a call for a free consultation. I can let you know if a probate will be necessary or not. Sometimes these cases can be quick, other times they can take much more time if a probate is necessary. It is always best to have a qualified attorney on your side. I handle Foreclosure Sale Surplus Funds 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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