Your Money After A Tax Lien Foreclosure

Understanding Surplus Funds After a Tax Lien Foreclosure Sale in Florida

When a property in Florida is sold at a tax lien foreclosure auction, the sale often results in surplus funds. These funds represent the amount collected above what was required to satisfy the outstanding tax debt and related costs. Understanding the rules surrounding surplus funds is crucial for property owners, lienholders, and other interested parties. Here’s what you need to know about surplus funds after a tax lien foreclosure sale in Florida.

What Are Surplus Funds?

Surplus funds are the proceeds from a tax lien foreclosure sale that exceed the amount needed to pay:

1. Outstanding Taxes and Penalties: This includes delinquent property taxes, interest, and penalties.

2. Costs and Fees: These are the administrative expenses related to the foreclosure process, such as court fees and auction costs.

Once these obligations are met, any remaining money is considered a surplus and may be claimed by eligible parties.

Who Can Claim Surplus Funds?

Florida law prioritizes the distribution of surplus funds to interested parties in a certain order:

1. Property Owners: Former owners have the first right to claim any surplus funds remaining after the sale.

2. Junior Lienholders: If there are mortgages or other liens recorded on the property, lienholders may have a right to surplus funds in the order of their legal priority.

3. Other Creditors: In some cases, other creditors may assert a claim based on unpaid debts tied to the property.

How to Claim Surplus Funds

If you believe you are entitled to surplus funds from a Florida tax lien foreclosure sale, follow these steps:

1. Verify the Availability of Surplus Funds: Check with the Clerk of Court in the county where the property was sold. They manage the distribution of surplus funds.

2. File a Claim: Submit a written claim to the Clerk of Court. This claim should include:

   • Your name and contact information.

   • Documentation proving your eligibility (e.g., proof of ownership or lien).

   • Details of the property in question.

3. Wait for the Clerk or Court’s Decision: The clerk then court will review all claims and determine the rightful recipient of the surplus funds.

4. Respond to Disputes: If multiple parties file claims, a judge may hold a hearing to resolve disputes and determine the distribution.

Deadlines and Timelines

In Florida, property owners and other eligible parties should act quickly to claim surplus funds. If no claim is made within 120 days, the Clerk of Court may transfer the funds to the state as unclaimed property. Once transferred, you can still claim the funds through Florida’s Department of Financial Services, but the process may take longer.

Protect Yourself from Scams

Surplus funds often attract scammers who prey on vulnerable former property owners. To protect yourself:

1. Avoid Upfront Fees: Legitimate services do not require payment upfront to assist with surplus fund claims.

2. Work with Trusted Professionals: Consider hiring an attorney or a trusted surplus recovery specialist to help navigate the process. If court is required, you should consider an attorney rather than just a specialist as a lawyer can represent you through the process.

3. Verify Claims: Confirm any communication regarding surplus funds with the Clerk of Court.

Common Challenges

• Disputes Among Claimants: Multiple claims for surplus funds can lead to legal disputes that prolong the process.

• Unclaimed Funds: Many property owners are unaware of their right to surplus funds and miss the opportunity to claim them.

• Complex Liens: Determining the priority of liens can be legally complex and may require court intervention.

Final Thoughts

Surplus funds after a tax lien foreclosure sale in Florida can offer a financial reprieve for former property owners or creditors, but the process of claiming them requires diligence and awareness. If you believe you may be entitled to surplus funds, act promptly, gather the necessary documentation and seek legal advice, if needed.

Understanding your rights and navigating the claims process effectively can ensure that you receive the funds to which you are entitled. Stay informed, and do not let surplus funds go unclaimed. If you have more questions or concerns, you can call Juris Firm Chartered for more information and a free consultation.