Going through a foreclosure is undeniably stressful, but there is often a silver lining at the end of the process that many Florida homeowners aren't aware of: surplus funds.
A foreclosure surplus occurs when your home is sold at a foreclosure auction for more than the total amount owed to the foreclosing lender. If you were the owner of the property, you are generally entitled to those remaining funds.
But what happens if there are multiple names on the property title? Who gets the money, and how is it split? Let's break down how Florida law handles surplus funds when multiple owners are involved.
How Title Ownership Affects Surplus Funds
In Florida, how the money is distributed depends heavily on how the property's title was held at the time of the foreclosure sale. The court will look at the deed to determine the legal relationship between the co-owners.
Here are the three most common scenarios:
1. Tenants by the Entirety (Married Couples)
If you and your spouse bought the property together while married, Florida law automatically views you as "Tenants by the Entirety" (unless the deed explicitly states otherwise).
The Rule: Under this ownership structure, both spouses own 100% of the property together as a single legal entity.
The Outcome: The surplus funds belong to both spouses jointly. The check is typically issued in both names, and one spouse cannot legally claim or spend the funds without the other. If the couple has divorced since purchasing the home, the ownership typically converts to a 50/50 split, unless a divorce decree states otherwise.
2. Joint Tenants with Rights of Survivorship
This type of ownership means two or more people own the property equally. If one owner passes away, their share automatically transfers to the surviving owners.
The Outcome: When a foreclosure results in surplus funds, the money is generally split equally among all living joint tenants listed on the title.
3. Tenants in Common
This is the default form of co-ownership for unmarried individuals in Florida if the deed doesn't specify another structure. Co-owners can own unequal shares of the property (for example, one person owns 70% and the other owns 30%).
The Outcome: Surplus funds are distributed according to each person’s percentage of ownership as defined on the deed. If no percentages are specified, the court defaults to an equal split.
Beware of Subordinate Lienholders
Before any co-owners can collect their shares, Florida law requires the court to satisfy any subordinate lienholders. If there are second mortgages, unpaid homeowners association (HOA) fees, or code enforcement liens, those creditors have a window of time to file a claim against the surplus funds first.
Once those liens are paid off, the remaining balance is cleared for distribution to the titleholders.
Navigating the Claims Process Together
Claiming surplus funds when multiple people are on the title can become legally complex. The court requires precise paperwork, and if co-owners disagree on how the funds should be divided—or if one owner cannot be located—the process can easily stall.
You do not have to navigate this overwhelming process alone. The dedicated team at Haynes Law Group is here to advocate for you, handle the complex court filings, and ensure you receive the maximum amount you are rightfully owed.
If you are ready to recover your foreclosure surplus funds, reach out to Haynes Law Group today at (888) 252-8754 for a compassionate, professional consultation.