After the court enters its Final Judgment of Foreclosure in favor of the plaintiff, the Court will schedule a foreclosure sale date. Sometimes, the foreclosure sale results in the purchaser paying more for the property than the amount of the final judgment. This amount above the final judgment amount is called the surplus.
The clerk of court keeps this surplus amount in the court registry after the clerk disburses funds to the plaintiff in an amount sufficient to satisfy the final judgment. The plaintiff is only entitled to funds in an amount sufficient to satisfy the court’s Final Judgment of Foreclosure.
Many people or entities may attempt to claim an interest in the surplus, for example, the holder of a second mortgage on the property or anyone who has filed a lien against the property, like a homeowner’s association or a condominium association. Any party claiming an interest in the surplus must file its request for disbursement of surplus funds within 60 days of the sale. Each party will need to set forth facts in its request that support the claim for the surplus funds.
The requirement that such a request for disbursement of surplus funds be filed within 60 days only applies to parties who were not the titled owner of the foreclosed property at the time the plaintiff filed its foreclosure action and notice of lis pendens. A lis pendens is a document that the plaintiff records in the Official Records of the county in which the property lies, and the lis pendens gives notice to all that a lawsuit has been filed which affects the property.
If you owned the property on the date the plaintiff filed its lawsuit for foreclosure and recorded the notice of lis pendens, then you may request that the court disburse the surplus funds to you, the homeowner. While no time limit applies to the homeowner’s request for surplus funds, the best practice is to file the request for surplus funds immediately to preserve your right to the surplus funds.
Hearing on Requests for Disbursement of Surplus Funds
Once the 60-day period for filing requests for disbursement of surplus funds has passed, anyone who files a request for surplus funds may schedule a hearing on their request.
What If There Were Multiple Owners at the Time of the Lis Pendens?
If more than one person owned the property at the time the plaintiff filed its notice of lis pendens, then each owner of the property has a claim to the surplus funds.
Our Fort Lauderdale foreclosure defense lawyers have years of experience helping South Florida homeowners retain their properties. We have saved well over 1800 homes from foreclosure and have helped our clients collect millions of dollars based on fraudulent bank and loaner practices. Contact us for a free consultation to see how we may be able to help you. Call us at 1-888-Fight13 (344-4813) or fill out our online contact form.