What Happens When the Clerk Files an Interpleader Over Florida Tax…

Short answer

If there are conflicting claims to the surplus from a Florida tax deed sale, the clerk of court may file an interpleader in the circuit court to let a judge decide who is entitled to the funds. 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.

Why it matters

Losing property in a tax deed sale is stressful, and the process for claiming any surplus can be confusing. Understanding what happens if the clerk files an interpleader is important because:

The surplus can be a significant sum, and it may be your last chance to recover value from your former home.
When multiple parties (such as lienholders or heirs) claim the surplus, the process can become complicated and slow.
If you do not respond or participate, you risk missing out on funds that may be rightfully yours.
The order in which claims are paid is set by law: governmental liens are paid first, then other lienholders (senior before junior), and finally the former owner (the titleholder of record).
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.

Steps

If the clerk of the circuit court files an interpleader over a Florida tax deed surplus, here is what typically happens:

Tax deed sale occurs Property taxes go unpaid, a tax certificate holder applies for a tax deed, and the clerk of court sells the property at public auction. This is a different process from a mortgage foreclosure. Surplus is identified 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. Notice of surplus funds The clerk mails a notice of surplus funds to parties who may have a claim. Claims period A sworn written claim must be filed with the clerk within 120 days of the date of the notice. Lienholders who do not file in time are barred from claiming. This bar does not apply to the property owner. Conflicting claims arise If more than one party files a claim and there is a dispute about who should be paid, the clerk may not be able to determine the correct recipient. Clerk files an interpleader The clerk may ask the circuit court to decide who is entitled to the surplus funds. This is called an interpleader case. Court decides The circuit court reviews the claims, applies the legal order of distribution (governmental liens first, then other lienholders, then the former owner), and issues an order directing the clerk how to distribute the funds. Distribution Once the court issues its order, the clerk of court distributes the surplus according to the court’s instructions.

Example

Example (for illustration only):

Suppose your homestead property is sold at a tax deed auction for $120,000. The unpaid taxes and costs of the sale total $15,000. The property’s assessed value is $80,000, so the opening bid includes $40,000 (one-half of the assessed value). 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 case, the surplus held by the clerk of court would be $105,000 ($120,000 sale price minus $15,000 taxes and costs).

If both a credit card company with a recorded judgment and a former spouse with a support lien file claims, and you as the former owner also file a claim, the clerk may file an interpleader so the circuit court can decide who is paid first. The court will pay governmental liens first, then other lienholders (senior before junior), and then the former owner.

Tip: If you receive a notice about surplus funds or an interpleader, read it carefully and consider your options. You may file your own claim with the clerk of court.

Common pitfalls

Missing the 120-day claim period: Lienholders who do not file a claim within 120 days of the notice are barred from receiving surplus funds. This does not apply to the former owner, but waiting too long can complicate matters.
Confusing tax deed sales with mortgage foreclosure: The rules for surplus distribution are different. Tax deed sales follow their own process and timelines.
Not understanding the surplus definition: The surplus is the amount the property sold for above the unpaid taxes and costs of the sale. For homestead property, one-half of the assessed value is also included in the surplus.
Ignoring court notices: If an interpleader is filed, failing to respond or participate can result in losing your opportunity to explain your claim to the court.
Assuming you need a lawyer to file a claim: The former owner may file a claim directly with the clerk of court.

Summary

The surplus from a Florida tax deed sale is the amount the property sold for above the unpaid taxes and costs of the sale. For homestead property, one-half of the assessed value is also included in the surplus.
The surplus is held by the clerk of court and is distributed first to governmental liens, then other lienholders (senior before junior), and then to the former owner.
If there are conflicting claims, the clerk may file an interpleader and the circuit court will decide who is paid.
A sworn written claim must be filed with the clerk within 120 days of the notice of surplus funds. Lienholders who miss this deadline are barred, but this does not apply to the former owner.
If you receive a notice about surplus funds or an interpleader, review it promptly and consider your next steps. Next steps you can take this week:
Review any notice from the clerk of court about surplus funds or an interpleader carefully.
If you believe you are entitled to surplus funds, consider filing a claim with the clerk of court or seeking legal advice if you have questions about your rights.

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 surplus?

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.

What happens if multiple people claim the surplus from a tax deed sale?

If there are conflicting claims, the clerk of court may file an interpleader in the circuit court. The court will decide who is entitled to the surplus, following the legal order: governmental liens first, then other lienholders, then the former owner.

How long do I have to file a claim for surplus funds after a tax deed sale?

A sworn written claim must be filed with the clerk of court within 120 days of the date of the notice of surplus funds. Lienholders who do not file in that time are barred, but this does not apply to the property owner.

What if no one files a claim 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.