Get Your Share of Surplus Funds Remaining after a Foreclosure Sale
Foreclosure actions are routinely filed by banks against homes if the borrower defaults in payment. Homeowners can also be subject to foreclosure actions for failure to pay homeowner’s association dues, assessments or mechanics liens.
As a result of the foreclosure process a sale is scheduled wherein the property is auctioned by the Clerk of the Court. If the bidding is zealous the property may sell for an amount far exceeding the judgment. The extra monies are retained by the court and designated as “surplus funds”.
A new Florida statute has been enacted dealing with surplus funds. The new law establishes a 60 day deadline to make a claim after the foreclosure sale is completed.
In the event that you are holding a subordinate interest in property and the bidding exceeds the value of the superior lien, mortgage or interest, you must make a claim within 60 days of the sale otherwise your rights in the surplus funds can be extinguished.
Accordingly, if you are named as a party in a foreclosure action you should carefully monitor the sale and if surplus funds are generated you must act quickly to make a claim.
ABOUT THE AUTHOR: Houston E. Short
Houston Short grew up in the Central Florida area, and continues to reside in Orlando with his family. He provides representation in arbitration actions for the American Arbitration Association and engages in alternative dispute resolutions including mediation both binding and non-binding arbitration, and settlement negotiations. He is an active member of the American Arbitration Association Panel Review Committee, the Orange County Bar Association, and the Florida Bar. He graduated from Florida State University in 1984 with a bachelors of science degree (cum laude) and received his juris doctor from the University of Florida in 1987 (with honors). Houston co-authored, "The Constitutionality of the Legislatures Mandate to Sever Counterclaims in Mortgage Foreclosure Action," the Real Property, Probate and Trust Law Section, The Florida Bar.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.