Statute of limitations on mortgage debt in Florida
You may have heard at some time someone mention the term “statute of limitations” but may not have understood what that term actually means. “Statute of limitations” is a legal term referring to the period of time by law within which someone has to file a lawsuit, if at all, depending on the type of lawsuit to be filed. If the party—referred to as the “plaintiff”—who intends to file a lawsuit fails to file the lawsuit within the particular time period required by the applicable statute of limitations, the law dictates that that party is barred from later filing the lawsuit. In other words, a plaintiff only has a certain amount of time to file a lawsuit against another party—referred to as the “defendant.” If the plaintiff waits too long to file a lawsuit against the defendant, the plaintiff forever loses its opportunity to sue the defendant. Because different types of lawsuits have different time periods under the applicable statute of limitations, it is important to know what the statute of limitations is for the particular lawsuit that you may be facing or are already facing.
The Law on Promissory Notes
For lawsuits in Florida involving a Promissory Note and/or a Mortgage, the applicable Florida statute of limitations is found in Section 95.11 of the Florida Statutes. Whether the lawsuit involves only a Promissory Note, only a Mortgage, or both a Promissory Note and a Mortgage, the applicable Florida statute of limitations in such instances is five (5) years. Regarding promissory notes, Subsection 95.11(2)(b), Florida Statutes, states in pertinent part:
“Actions … shall be commenced as follows: within five years [for] a legal or equitable action on a contract, obligation, or liability founded on a written instrument….”
Because a promissory note is a loan that creates a legal obligation that is set forth in a written contract—that is, the actual Promissory Note itself—any lawsuit to attempt to collect the loan debt must be brought within five (5) years of the event that constitutes a breach of the Promissory Note.
Likewise, regarding mortgage foreclosures, Subsection 95.11(2)(c), Florida Statutes, states:
“Actions … shall be commenced as follows: within five years [for] an action to foreclose a mortgage.”
Just as with a lawsuit involving a promissory note, any lawsuit to attempt to foreclose a mortgage must be brought within five (5) years of the event that constitutes a breach of the Mortgage. With both promissory notes and mortgages alike, there are various circumstances that may constitute a breach of the promissory note and/or mortgage. The most common type of breach is a default on the promissory note and/or mortgage.
While there are also different circumstances that may constitute a default of the promissory note and/or mortgage, the most common type of default is when the borrower stops making mortgage payments before the mortgage loan has been paid off in full. Since most mortgage loans are paid monthly, the default date typically would be the payment due date of the month immediately following the month that the borrower stopped making mortgage payments. For example, if your mortgage payment is due by the first day of every month until the mortgage loan is paid off in full, if the last time that you made a mortgage payment was in December of 2017, the default date would be January 1, 2018. Five (5) years from the default date of January 1, 2018, is January 1, 2023. Therefore, if the mortgage lender is going to sue you to attempt to collect the loan debt allegedly owed on the Promissory Note and/or to attempt to foreclose the Mortgage and auction your property at a foreclosure sale, the mortgage lender must file the lawsuit against you no later than January 1, 2023. Otherwise, the mortgage lender forever loses its opportunity to sue you.
Defense for the Statute of Limitations in Florida
As a homeowner, you are permitted and encouraged to raise the statute of limitations defense should it apply to your specific case. The courts are not responsible for reviewing the statute of limitations for each and every foreclosure case. If you, as the homeowner, do not raise this issue as part of your defense, then it will be considered waived. This is the case even if the lender violated the statute of limitations. This is why it is so essential to work with an experienced Fort Lauderdale foreclosure defense attorney to make sure you are aware of the statute of limitations and if this pertains to your case as a defense option.
There are instances where some people think that by delaying the proceedings for their foreclosure case will result in defense for passing the statute of limitations. In many cases, a foreclosure case can take years and years to fully resolve. The statute of limitations is considered the time period before the creditor or lender actually takes action. If the statute of limitations runs out while the foreclosure case is still in process, then you are unable to use the statute of limitations as a defense.
The only exception is if the lender has sought a foreclosure previously. In this case, you may be able to raise the statute of limitations as a viable defense.
Restarting the Statute of Limitations on Mortgage Debt Foreclosure Lawsuits
The statute of limitations can be restarted if the homeowner takes certain actions. This is why it is advised to be cautious in your interactions and communications with your creditors and lenders if you want to use the statute of limitations as your defense for a mortgage foreclosure lawsuit. For instance, if you make a payment toward your mortgage, it can restart the statute of limitations. Therefore, this gives the lender more time to move forward with a foreclosure if you stop making payments again.
If you have questions about the statute of limitations and how it may affect your mortgage loan, we welcome the opportunity to meet with you during a free consultation to discuss your particular circumstance. Loan Lawyers, LLC has helped over 5,000 South Florida homeowners and consumers with their debt problems and we provide exceptional foreclosure defense. Please do not hesitate to contact us to see how we may be able to help you.