If you discover that there is a surplus of proceeds from a foreclosure sale, according to Florida Statues 45.032 and 45.033, you have the opportunity to claim the extra money on a few conditions. The former property owner is entitled to the surplus money if he didn’t assign his rights to someone else between the time the lis pendens, a written notice that a lawsuit concerning real estate has been filed, was recorded and the time of the judicial sale.
The other stipulation is that there are no other “subordinate lienholders”, people and companies who are owed money, who have filed a claim for the funds. If there are no subordinate lienholders filing a claim the property owner receives the money, minus the court’s fees. The property owner is allowed to request the surplus fund within 60 days of the sale.
One question that can arise is what happens if someone who claims ownership after the lis pendens makes a claim for the surplus funds. An example of this is that a homeowner received a foreclosure notice and transferred ownership to someone else. In cases like this, the transfer must be deemed voluntary or involuntary.
A voluntary transfer would be one made in writing that that followed all of Florida Statue 45.044(3) guidelines. An involuntary transfer is one made by inheritance or guardianship. If the court discovers that the transfer does not meet all of the statutory requirements, they can still provide the surplus funds to the transferee if the transfer was made in “good faith”. If this is not the case, the court can give the surplus to the original owner and the transferee would be able to sue the owner for a refund.
Stephen K. Hachey, a Florida real estate attorney can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.
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This post was written by Stephen Hachey. Follow Stephen on Google