Surplus proceeds refer to the extra money that remains after a foreclosure sale once all the debts secured by the property have been paid off. This situation can arise when the foreclosure sale price exceeds the total amount owed on the property. According to Florida Statutes 45.032 and 45.033, the former property owner has the right to claim these surplus proceeds, provided certain conditions are met.
Claiming Surplus Proceeds
The former property owner is entitled to claim the surplus proceeds if they did not assign their 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. However, there is another stipulation: there should be no other “subordinate lienholders” (people or companies who are owed money) who have filed a claim for the funds. If no subordinate lienholders file a claim, the property owner receives the surplus money, minus the court’s fees. The property owner has 60 days from the date of the sale to request the surplus funds.
Role of Subordinate Lienholders
Subordinate lienholders are individuals or entities that have a claim on the property but whose claim is ranked below that of the primary lender. If there are subordinate lienholders who have filed a claim, they may be entitled to a portion of the surplus proceeds. The distribution of surplus proceeds in such cases can be complex and may require legal assistance to navigate.
Transfers of Ownership and Surplus Proceeds
Transfers of ownership can complicate the distribution of surplus proceeds. For example, if a homeowner received a foreclosure notice and transferred ownership to someone else, the court must determine whether the transfer was voluntary or involuntary. A voluntary transfer would be one made in writing that followed all of Florida Statute 45.044(3) guidelines. An involuntary transfer is one made by inheritance or guardianship. If the court determines that the transfer was made in “good faith,” the transferee may be entitled to the surplus funds. If not, the court can award the surplus to the original owner, and the transferee would have the option to sue the owner for a refund.
Seeking Legal Advice
Dealing with surplus proceeds from a foreclosure sale can be complex. It’s crucial to seek professional advice to navigate these challenges. A foreclosure attorney can guide you through the process, help you understand your rights and options, and work to protect your interests. If you’re facing a situation involving a foreclosure sale and potential surplus proceeds, don’t hesitate to consult with a qualified attorney.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.
