Surplus funds can also be referred to as an “overage”, or “excess funds”. When a property goes into foreclosure, it sells at auction. The foreclosure may be an association foreclosure, a mortgage foreclosure, or a tax-deed foreclosure for example. In any case, when the property sells, it often times will sell for more than the amount for which it was being foreclosed on. These excess funds are called a “surplus”, and these excess funds belong to the original home-owner, or heirs to the original home-owner!

You have been identified as the appropriate party to claim these funds because property you owned has gone through a foreclosure or tax sale, or because you are an heir to property that has gone through sale.

The funds we are calling you about are held in the county court registry. They are the result of an association foreclosure, a mortgage foreclosure, or a tax-deed foreclosure sale, where the amount the property sold for at auction is more than the amount it was being foreclosed on for. These are called “surplus funds”.

The Legislature in the State of Florida has been very specific in how they worded the law on who is entitled to surplus. Here is the “legalese” version our attorney uses, and below it, our version that’s easier to interpret2021 Florida StatutesTitle VI – Civil Practice and ProcedureChapter 45 – Civil Procedure: General Provisions45.032 – Disbursement of Surplus Funds After Judicial Sale.There is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim. It is the intent of the Legislature to abrogate the common law rule that surplus proceeds in a foreclosure case are the property of the owner of the property on the date of the foreclosure sale. Owner of record” means the person or persons who appear to be owners of the property that is the subject of the foreclosure proceeding on the date of the filing of the lis pendens. In determining an owner of record, a person need not perform a title search and examination but may rely on the plaintiff’s allegation of ownership in the complaint when determining the owner of record. Subordinate lienholder” means the holder of a subordinate lien shown on the face of the pleadings as an encumbrance on the property. The lien held by the party filing the foreclosure lawsuit is not a subordinate lien. A subordinate lienholder includes, but is not limited to, a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien. However, the holder of a subordinate lien shall not be deemed a subordinate lienholder if the holder was paid in full from the proceeds of the sale.Our version:Whoever owned the property on the date the lawsuit was filed is the party who can claim surplus funds. They can make that claim after any lienholders are paid what they are owed on the property. Other lienholders might be: second or third mortgages, city liens (unpaid water, electricity, trash, etc.), code enforcement violations (didn’t fix something the city asked you to), UCCs (people who have a secured asset they have loaned to you like solar power on the roof, or hot water heaters, etc.) During our case review, our expert specialist will walk you through all the details of your case and who may or may not claim surplus.A lot of times, we see the investor or purchaser at auction try and make a claim for surplus funds. This happens a lot when the homeowner isn’t represented by us. If nobody files an objection to this claim, a lot of judges will grant it. As a result, money that actually belongs to you (the prior homeowner) instead gets wrongfully disbursed to the new buyer of the home at auction. We can and will fight this on your behalf!

If you aren’t the owner of record, you’ve been identified as an heir to that person. When someone who owns property passes away, and their property goes through foreclosure, the “heirs” of that person are the rightful party to claim surplus.Sometimes it’s as simple as a spouse’s property, or your parents. However, in the state of Florida if someone dies without a will they died “intestate”, and so there is a predefined set of rules on who are the heirs. Your account specialist will walk you through how exactly you are entitled to the funds, but rest assured we are experts in this and have identified you as the right party!

The short answer is, No!

If the mortgage was not named in the foreclosure case, they cannot claim surplus. Even if they are the plaintiff, they can’t claim surplus because they were paid in full from the proceeds of the sale. If they are not named, the reason why they cannot claim surplus is that they still have their “senior” lien on the property; they weren’t “foreclosed”. The person who bought it at auction bought the property with that mortgage still on the property, and so that new property owner is now responsible for that mortgage. In other words, you are in the clear to have us claim the funds on your behalf.