Short answer
If foreclosure surplus funds remain unclaimed with the clerk of court for one year after a judicial foreclosure sale in Florida, the money is sent to the Florida Department of Financial Services as unclaimed property. The funds are not lost, but after this point, only the owner of record (or the beneficiary of a deceased owner) may claim them from the state.
Why it matters
Foreclosure surplus funds can represent a significant amount of money for a former homeowner who has just lost their property. Understanding the process and deadlines is crucial because:
- The surplus is not automatically sent to the former owner; a claim must be made.
- Missing the one-year window to claim from the clerk of court means the process changes, and the funds are transferred to the state’s unclaimed property program.
- Knowing the correct procedure helps avoid unnecessary delays or loss of access to funds that could help with moving costs, debts, or a fresh start.
- There are companies and individuals who may offer to help for a fee, but Florida law allows the owner to claim the surplus directly from the clerk of court without any third party.
Steps
Here’s how the process works for foreclosure surplus funds in Florida:
Judicial foreclosure and sale: Florida is a judicial foreclosure state. The court enters a final judgment of foreclosure, and the sale is conducted by the clerk of the circuit court.
Surplus determination: If the sale price is higher than the total owed under the final judgment (including costs and fees), the extra amount is called the surplus. The surplus is held by the clerk of court in the court registry—not by the lender or their attorney.
Distribution order: The clerk of court pays out the surplus in a specific order: Amounts the final judgment directs the clerk to pay (such as the lender’s judgment and court costs). Subordinate lienholders who filed a timely claim. The owner of record as of the date the lis pendens was filed.
Claiming the surplus: The former owner may file a claim directly with the clerk of court to receive any remaining surplus after subordinate lienholders are paid. No attorney or third party is required to file this claim, though some choose to seek assistance.
After one year: If the surplus is still unclaimed one year after the sale, the clerk of court sends the funds to the Florida Department of Financial Services as unclaimed property. The money is not lost; it is held by the state’s unclaimed property program. From this point, only the owner of record or the beneficiary of a deceased owner may claim the funds from the Department.
If the surplus has already been sent to the state: The former owner or the beneficiary of a deceased owner may file a claim with the Florida Department of Financial Services to recover the funds. The firm can assist with this process if needed.
Note: This process is different from surplus funds from a tax-deed sale, which is a separate procedure not covered here.
Example
This is a hypothetical example for illustration only.
Suppose a homeowner’s property is sold at a judicial foreclosure sale for $250,000. The final judgment of foreclosure (including all costs and fees) is $230,000. The surplus is $20,000.
- The $20,000 surplus is held by the clerk of court.
- A subordinate lienholder files a timely claim for $5,000 and is paid from the surplus.
- The remaining $15,000 is available to the former owner, who can file a claim with the clerk of court.
- If the former owner does not claim the $15,000 within one year, the clerk of court sends it to the Florida Department of Financial Services as unclaimed property.
- After that, only the owner of record or the beneficiary of a deceased owner may claim the funds from the Department.
Need help with surplus funds already sent to the state?
Cruz Law Firm can represent former owners and beneficiaries in claims to the Florida Department of Financial Services.
Common pitfalls
- Missing the one-year mark: Waiting too long to claim from the clerk of court means the process changes and the claim must be made to the state.
- Confusing foreclosure surplus with tax-deed surplus: These are different processes with different rules and deadlines.
- Assuming the lender or their attorney holds the funds: Only the clerk of court holds foreclosure surplus funds.
- Not understanding the distribution order: Subordinate lienholders who file timely claims are paid before the former owner.
- Paying unnecessary fees: Some companies offer to help claim surplus funds for a fee, but the owner can file directly. If an assignment is made, the total compensation to an assignee may not exceed 12 percent of the surplus.
- Believing the money is lost after one year: The funds are not lost; they are transferred to the state’s unclaimed property program and may still be claimed by the rightful party.
Summary
- Florida is a judicial foreclosure state; surplus funds from a foreclosure sale are held by the clerk of court.
- The surplus is distributed first to amounts 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 funds are sent to the Florida Department of Financial Services as unclaimed property.
- The money is not lost after one year, but must be claimed from the state by the owner of record or the beneficiary of a deceased owner.
- Next steps:
- If you believe you are owed surplus funds, check with the clerk of court in the county where the foreclosure occurred.
- If more than one year has passed, search the Florida unclaimed property database or contact the Department of Financial Services. This page is for general information only 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 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 foreclosure surplus funds in Florida?
In Florida, foreclosure surplus funds are held by the clerk of court in the court registry, not by the lender or their attorney.
What happens to surplus funds after one year?
If surplus funds remain unclaimed with the clerk of court for one year after the foreclosure sale, they are sent to the Florida Department of Financial Services as unclaimed property. The funds are not lost and may still be claimed by the owner of record or the beneficiary of a deceased owner.
Can I claim surplus funds myself, or do I need a lawyer?
Florida law allows the former owner to claim surplus funds directly from the clerk of court. You do not need a lawyer or third party to make a claim, though some people choose to seek help.
What is the order of distribution for foreclosure surplus funds?
The clerk of court pays out surplus funds first to amounts directed by the final judgment, then to subordinate lienholders who filed timely claims, and finally to the owner of record as of the date the lis pendens was filed.
Is tax-deed surplus handled the same way as foreclosure surplus?
No, surplus from a tax-deed sale is a separate process with different rules and deadlines. This page covers only foreclosure surplus.