Understanding the Notice of Surplus Funds After a Florida Tax Deed…

Short answer

If you receive a notice of surplus funds after a Florida tax deed sale, it means there may be money held by the clerk of court that you could claim. The surplus is the amount the property sold for above the unpaid taxes and the costs of the sale. For homestead property, the opening bid also includes one-half of the assessed value, and that amount is part of the surplus too. You must file a sworn written claim with the clerk of court within 120 days of the notice to protect your rights.

Why it matters

Losing property in a tax deed sale is difficult, but the notice of surplus funds could mean you are entitled to money left over after the sale. Understanding your rights and the process is crucial because:

The surplus can provide financial relief after losing your home.
There is a strict 120-day window to file a claim with the clerk of court.
If you do not act, other lienholders or governmental liens may be paid first, and you could miss out on funds.
If no claim is filed within 120 days, you are presumed entitled, but the funds are handled under Florida’s unclaimed property law, which can make recovery more complex.

Steps

If you are a former owner who has received a notice of surplus funds from a Florida tax deed sale, here is what you should do:

Read the Notice Carefully Confirm that the notice is from the clerk of the circuit court and relates to a tax deed sale (not a mortgage foreclosure, which is a different process). Note the date on the notice — the 120-day period to file a claim starts from this date.

Understand What the Surplus Is The surplus is the amount the property sold for above the unpaid taxes and the costs of the sale. For homestead property, the opening bid also includes one-half of the assessed value, and that amount is part of the surplus too. The surplus is held by the clerk of court until proper claims are resolved.

Determine Who May Be Paid Governmental liens (such as code enforcement or municipal liens) are paid first from the surplus. Other lienholders are paid next, in order of priority (senior before junior). The former owner (the titleholder of record) is paid after all valid liens are satisfied.

File a Sworn Written Claim Prepare a sworn written claim and file it with the clerk of court within 120 days of the notice date. You do not need a lawyer to file a claim, but you may consult one if you have questions or if there are competing claims.

Respond to Conflicting Claims (if any) If multiple parties file claims, the clerk may ask the circuit court to decide who is paid, in a process called interpleader.

If No Claim Is Filed in 120 Days If no claim is filed within 120 days, the titleholder of record is presumed entitled and the funds are handled under Florida’s unclaimed property law. The firm also represents former owners, and the beneficiaries of owners who have died, in claims for surplus that has been sent to the Florida Department of Financial Services.

Example

Illustrative Example:

Suppose you owned a homestead property in Florida, but unpaid property taxes led to a tax deed sale. The holder of a tax certificate applied for a tax deed, and the clerk of the circuit court sold your property at public auction. The opening bid included the unpaid taxes, costs of sale, and one-half of the assessed value (because it was homestead property).

The property sold for $150,000.
Unpaid taxes and costs of sale totaled $20,000.
One-half of the assessed value (for homestead) was $40,000.

The surplus is the amount the property sold for above the unpaid taxes and the costs of the sale. For homestead property, the opening bid also includes one-half of the assessed value, and that amount is part of the surplus too. In this example, the surplus held by the clerk of court would be $130,000 ($150,000 sale price minus $20,000 taxes and costs). The $40,000 homestead half is included in the surplus.

After the sale, the clerk mails a notice of surplus funds. You, as the former owner, have 120 days from the date of the notice to file a sworn written claim with the clerk of court. Governmental liens and other lienholders (if any) are paid first, and then you may receive the remaining surplus.

Action Step: If you received a notice of surplus funds from the clerk of court, mark your calendar for the 120-day deadline and consider filing your claim as soon as possible.

Common pitfalls

Missing the 120-day deadline: If a lienholder does not file a claim within 120 days, they are barred from payment. This bar does not apply to the property owner, but delay can complicate recovery.
Confusing tax deed sales with mortgage foreclosures: The surplus process is different. Tax deed sales are triggered by unpaid property taxes, not mortgage default.
Not understanding the surplus calculation: For homestead property, one-half of the assessed value is included in the opening bid and is part of the surplus, even if no one bids above the opening bid.
Ignoring governmental liens: Governmental liens are paid first from the surplus, which can reduce the amount available to the former owner.
Assuming a lawyer is required: The former owner can file a claim directly with the clerk of court.
Not responding to conflicting claims: If there are multiple claims, failing to participate in the process can delay or jeopardize payment.

Summary

A Florida tax deed sale occurs when property taxes go unpaid and the clerk of court sells the property at public auction.
The surplus is the amount the property sold for above the unpaid taxes and the costs of the sale. For homestead property, the opening bid also includes one-half of the assessed value, and that amount is part of the surplus too.
Governmental liens are paid first, then other lienholders, then the former owner.
The clerk mails a notice of surplus funds, and a sworn written claim must be filed with the clerk within 120 days of the date of that notice. A lienholder that does not file in that time is barred. That bar does not apply to the property owner.
If no claim is filed within 120 days, the titleholder of record is presumed entitled and the funds are handled under Florida’s unclaimed property law. Next steps you can take this week:
Review any notice of surplus funds you have received and note the 120-day deadline.
Consider preparing and filing your sworn written claim with the clerk of court as soon as possible.

This page provides general information and does not create an attorney-client relationship.

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 tax deed surplus funds. A former owner may file a claim with the clerk of court directly.

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

What is a Florida tax deed sale and how is it different from a mortgage foreclosure?

A Florida tax deed sale happens when property taxes go unpaid. The holder of a tax certificate applies for a tax deed, and the clerk of the circuit court sells the property at a public auction. This is a different process from a mortgage foreclosure, which involves unpaid mortgage debt and court proceedings.

What is the surplus in a Florida tax deed sale?

Who gets paid from the surplus after a tax deed sale?

Governmental liens are paid first from the surplus, then other lienholders (in order of priority), and then the former owner (the titleholder of record).

How long do I have to file a claim for surplus funds?

You must file a sworn written claim with the clerk of court within 120 days of the date of the notice of surplus funds. A lienholder that does not file in that time is barred. That bar does not apply to the property owner.

What happens if no claim is filed within 120 days?

If no claim is filed within 120 days, the titleholder of record is presumed entitled and the funds are handled under Florida’s unclaimed property law.