Statute of Limitations in Florida Mortgage Loan Foreclosure Lawsuits
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.
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.
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. Please do not hesitate to contact us to see how we may be able to help you.