Florida Foreclosure Sale Surplus Funds – What are Surplus Funds Exactly and Are you Eligible to Receive Them?

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I talk a great deal about Florida Foreclosure Sale Surplus Funds. What are Surplus Funds Exactly and are you eligible to receive them if you have lost your property to foreclosure auction or if a deceased relative has lost the property to foreclosure auction?

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.” The certificate of disbursements is issued by the Clerk of Court after it has determined the final judgment of foreclosure amount, and the sale price from the auction and that the funds have been remitted to the Clerk. Sometimes the Clerk of Court may file multiple certificates of disbursements if the surplus funds are given to subordinate lienholders or to satisfy post judgment fees to the plaintiff at different times. This certificate will show how much was paid for the property at auction, how much has been remitted to certain parties, and most important how much surplus (if any) has been retained by the Clerk. The Clerk of Court does not decide who is due these funds, they just report who has already been paid and how much is still being held by them.

Now that we know what Florida Foreclosure Sale Surplus Funds are, we have to determine who is eligible to receive them. Florida Statute 45.033(1) states, “there is established a rebuttable presumption that the owner of record of real property on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” Florida Statute 45.032(1)(a) states, “owner of record means the person or persons who appear to be the owners of the property that is the subject of the foreclosure proceeding on the date of the filing of the lis pendens. In determining an owner of record, a person need not perform a title search and examination but may rely on the plaintiff’s allegation of ownership in the complaint.” This means that if this was your property at the time the case was originally filed, you are eligible for the Florida Foreclosure Surplus Funds. I have had to defend my clients against new owners claiming they are due the funds because they are the current “owner(s) of record”. It doesn’t work like that. You must have been the owner at the time the case was first filed, not at the end of the case.

But what if the owner of record is deceased? Who is entitled to the Florida Foreclosure Surplus Funds then? If you are a close family member, you may be eligible for the funds. Also, if you are named in a Will to receive the deceased person’s residuary estate, you may be eligible for the funds. The way this works is also laid out in the statutes. Florida Statute 45.033(2)(b) states, “an involuntary transfer or assignment may be as a result of inheritance.” This means if you are the direct heir to the deceased person, you may have involuntarily inherited the right to the funds. For instance, if the person who died was your spouse, parent, sibling, etc., you might be entitled to the funds. Sometimes a probate isn’t necessary because the statute specifically states the right to the funds may be by right of inheritance and is involuntary. However, if there is some question as to who the rightful heirs are, a probate may be necessary. This may be especially true in the case of a Will where certain family members have been purposely disinherited.

The only other parties who may be entitled to the Florida Foreclosure Surplus Funds would be subordinate lienholders. These are generally named in the complaint and must file a timely claim (within one year) of the Clerk’s filing of the Certificate of Title. The key is that it must be someone who has a lien that is junior to that of the plaintiff to the foreclosure case. If they have a lien that is superior to that of the plaintiff, they are not allowed to make a claim. Sometimes this is little confusing and may require an evidentiary hearing to determine priority of liens.

If you were the owner, or if you are an heir to a deceased family member who was the owner to a property and you believe you are owed surplus funds from either a Tax Deed sale or a Foreclosure sale anywhere in the State of Florida, please give me a call for a free consultation. I can help you to make sure you get the most from 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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