Florida Foreclosure Surplus: Should You Use a Surplus Recovery…

Short answer

If your Florida home was sold in a judicial foreclosure and there is surplus money left over, you can claim it directly from the clerk of court without paying a surplus recovery company or hiring an attorney. However, some homeowners choose to get help for convenience or peace of mind. The main risk is losing part of your surplus to unnecessary fees or missing key deadlines.

Why it matters

Foreclosure is stressful, and many former homeowners are unaware that they may be entitled to surplus funds after the sale. Understanding your options can make a significant financial difference:

Surplus funds are any money left after the court-ordered debts and costs are paid from the sale proceeds.
In Florida’s judicial foreclosure process, the surplus is held by the clerk of the circuit court, not the lender or their attorney.
You do not need to pay a surplus recovery company or assign your rights to anyone to claim your money. Doing so can reduce what you receive, since an assignee’s total compensation is capped at 12 percent of the surplus.
If you wait too long, after one year the clerk will send any unclaimed surplus to the Florida Department of Financial Services as unclaimed property. The money is not lost, but the process to claim it changes.

Steps

If you are the former owner of a Florida property sold in a judicial foreclosure, here is how the surplus process works:

Understand the process Florida uses a judicial foreclosure system. The court enters a final judgment of foreclosure, and the sale is conducted by the clerk of the circuit court. After the sale, the clerk of court holds any surplus funds in the court registry.

Check for surplus Review the final judgment and sale records to see if there was a surplus after paying the amounts the judgment directs, including any subordinate lienholder claims.

Decide how to claim You can file a claim for the surplus directly with the clerk of court. You do not need a lawyer or a surplus recovery company, but you may choose to get help if you prefer. If you assign your rights to a surplus recovery company or other assignee, their total compensation cannot exceed 12 percent of the surplus under Florida law.

File your claim Submit the required paperwork to the clerk of court in the county where the foreclosure occurred. The claim must show you were the owner of record as of the date the lis pendens was filed.

Wait for distribution The clerk pays out in this order: first, the amounts the final judgment directs; second, subordinate lienholders who filed timely claims; and finally, the owner of record as of the lis pendens date.

If more than one year has passed After one year, any surplus still held by the clerk is sent to the Florida Department of Financial Services as unclaimed property. Only the owner of record or the beneficiary of a deceased owner may claim it from the Department.

Tax-deed surplus is different If your property was sold in a tax-deed sale, the process and deadlines are different. This page covers only judicial foreclosure surplus.

Example

This is a hypothetical example for illustration only.

Suppose your home in Palm Beach County was sold at a judicial foreclosure auction for $320,000. The final judgment ordered the clerk of court to pay $300,000 to the lender and $10,000 to a subordinate lienholder who filed a timely claim. That leaves a $10,000 surplus.

The clerk of court holds the $10,000 in the court registry.
As the former owner (owner of record as of the lis pendens date), you can file a claim directly with the clerk to receive the surplus.
If you choose to assign your rights to a surplus recovery company, they may take up to 12 percent ($1,200) as their fee, and you would receive $8,800.
If you do nothing for one year, the $10,000 is sent to the Florida Department of Financial Services as unclaimed property. You can still claim it, but now only you (or your beneficiary, if you have died) may do so, and the claim is made to the Department, not the clerk.

Tip: You can always check with the clerk of court in the county where your property was sold to see if there is a surplus and how to file a claim.

Common pitfalls

Paying unnecessary fees: Assigning your rights to a surplus recovery company or assignee means you will receive less, since their compensation can be up to 12 percent of the surplus.
Missing the one-year mark: If you do not claim the surplus from the clerk of court within one year, the process changes and you must claim from the Florida Department of Financial Services.
Confusing foreclosure surplus with tax-deed surplus: These are different processes with different rules and deadlines.
Not understanding the distribution order: Subordinate lienholders who file timely claims are paid before the owner of record receives any surplus.
Assuming the lender or their attorney holds the surplus: In Florida, only the clerk of court holds the surplus after a judicial foreclosure sale.

Summary

Florida is a judicial foreclosure state; the clerk of court holds any surplus after the sale.
You can claim surplus funds directly from the clerk without paying a surplus recovery company or hiring an attorney.
The clerk pays out first to those named in the final judgment, then to subordinate lienholders with timely claims, then to the owner of record as of the lis pendens date.
After one year, unclaimed surplus is sent to the Florida Department of Financial Services as unclaimed property; only the owner of record or a beneficiary may claim it from there.
Next steps: Contact the clerk of court in the county where your property was sold to check for surplus, and decide whether to file a claim yourself or seek assistance.

This page provides general information and does not create an attorney-client relationship. If you have questions about surplus funds that have already been sent to the Florida Department of Financial Services, Cruz Law Firm can represent former owners or beneficiaries in making a claim to the Department.

Important information

Attorney advertising. Responsible attorney: Christian Cruz, Esq. Office: CRUZ LAW FIRM, 160 W Camino Real, 589, Boca Raton, FL, 33432.

Florida law does not require you to hire a lawyer or anyone else to claim foreclosure surplus funds. A former owner may file a claim with the clerk of court directly, and does not have to assign their rights to anyone to do so.

This page is general information about Florida law, not legal advice. Reading it does not create an attorney-client relationship, and no such relationship is formed until we have a signed written agreement.

Fee arrangements depend on the posture of the matter and are set out in a written agreement before any work begins. We are glad to explain how fees would work in your situation when we speak.

FAQ

Who holds the surplus funds after a Florida foreclosure sale?

In Florida, after a judicial foreclosure sale, the surplus funds are held by the clerk of the circuit court in the court registry. The lender or their attorney does not hold the surplus.

Do I need a lawyer or surplus recovery company to claim foreclosure surplus in Florida?

No, you do not need a lawyer or surplus recovery company to claim surplus funds. The former owner can file a claim directly with the clerk of court. Some people choose to get help for convenience, but it is not required by law.

What happens if I do not claim the surplus within one year?

If the surplus is not claimed from the clerk of court within one year after the sale, it is sent to the Florida Department of Financial Services as unclaimed property. The money is not lost, but only the owner of record or the beneficiary of a deceased owner may claim it from the Department.

What is the order of payment for surplus funds after a foreclosure sale in Florida?

The clerk of court pays out surplus funds in this order: first, the amounts directed by the final judgment; second, subordinate lienholders who filed timely claims; and finally, the owner of record as of the date the lis pendens was filed.

Is tax-deed surplus the same as foreclosure surplus in Florida?

No, tax-deed surplus is a separate process with different rules and deadlines. This page covers only judicial foreclosure surplus.