Detailed Answer
When a foreclosure sale generates surplus funds, Florida law requires the clerk of court to hold and distribute those funds to valid claimants in a specific order. To determine if other creditors or lienholders could have claims to the surplus, you should follow these key steps.
1. Review the Clerk’s Notice of Surplus Funds and Order
After the foreclosure sale, the clerk issues a Notice of Surplus Funds. That notice lists the date by which interested parties must file a claim. It also includes the clerk’s order establishing how the funds will be distributed. Read this document carefully to identify any named claimants and deadlines.
2. Search County Real Property Records for Recorded Liens
Visit the county clerk’s or property appraiser’s online database to search for mortgages, home-equity lines of credit, judgment liens and other encumbrances recorded against the foreclosed property. Recording dates determine lien priority. A senior mortgage has first right to surplus; junior liens follow.
3. Check UCC Filings via Florida Department of State
Creditors may file Uniform Commercial Code liens against personal property or goods using the Florida Sec. of State’s online UCC portal: dos.myflorida.com/sunbiz/search/ucc/. UCC lienholders can assert claims if the debtor granted security interests in fixtures or equipment installed on the property.
4. Examine Judgment Lien Records
Under Fla. Stat. §55.10, a civil judgment creates a lien on real property once recorded with the county clerk. Search for recorded judgment liens in the public records. Judgments entered and recorded before the foreclosure sale may entitle the creditor to a share of the surplus.
5. Investigate Federal and State Tax Liens
Federal tax liens are recorded in the county public records after the IRS files a Notice of Federal Tax Lien. State tax liens by the Florida Department of Revenue are similarly recorded. Both types of tax liens typically have priority over junior mortgages and judgments.
6. Consider Homeowners’ Association and Condominium Association Liens
Under Fla. Stat. §720.3085 and §718.116, homeowners’ and condominium associations obtain statutory liens for unpaid assessments. These liens rank after first mortgages but before other junior lienholders. Search the county records for any association lien filings.
7. Consult Florida’s Foreclosure Surplus Statutes
Florida Statutes chapter 45 governs surplus fund distribution:
- §45.031 – Distribution of surplus moneys.
- §45.032 – Certification and priority of claims.
- §45.033 – Procedure to obtain surplus funds.
These statutes set deadlines and priorities: first mortgages, tax liens, then junior mortgages, judgments and other encumbrances.
Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a qualified attorney to address your specific circumstances.
Helpful Hints
- Note all filing deadlines in the clerk’s notice to protect your claim.
- Use a title company search for comprehensive lien and encumbrance information.
- Confirm lien recording dates to establish priority.
- Check both county and state databases for tax liens.
- File your claim with the clerk of court, including notarized affidavits and lien documentation.
- Keep copies of all recorded documents and proof of service.
- Consult an attorney if multiple creditors seek the same surplus funds.