Short answer
In Florida judicial foreclosure cases, the clerk of court pays out surplus funds in a strict order: first, any amounts the final judgment directs the clerk to pay; second, subordinate lienholders who filed timely claims; and finally, the owner of record as of the date the lis pendens was filed. If the surplus remains unclaimed for one year after the sale, it is sent to the Florida Department of Financial Services as unclaimed property, but it is not lost.
Why it matters
Understanding who gets paid first from foreclosure surplus funds is crucial for former homeowners because:
- It affects whether you may receive any money after your home is sold at foreclosure.
- Missing a step or misunderstanding the process can delay or prevent you from recovering funds you may be entitled to.
- The process is governed by strict legal rules, and the timing is important—especially regarding when surplus funds are transferred to the state.
- If you have subordinate liens (like a second mortgage or unpaid association dues), those lienholders may have a right to claim part of the surplus before you do.
For example, if your home sells for more than the amount owed on the mortgage and other court-ordered costs, the surplus could help you move forward financially. But if a subordinate lienholder files a claim, they may be paid before you.
Steps
If you are a former homeowner whose property was sold in a Florida judicial foreclosure, here’s how the surplus distribution process works:
Foreclosure Sale and Surplus Determination 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. If the sale price exceeds the amounts owed under the final judgment, the surplus is deposited with the clerk of court (not the lender or their attorney).
Distribution Order The clerk of court pays out the surplus in this order: Any amounts the final judgment specifically directs the clerk to pay (such as court costs or fees). Subordinate lienholders who file a timely claim with the clerk of court. The owner of record as of the date the lis pendens was filed, if any surplus remains after paying subordinate lienholders.
Claiming the Surplus If you are the owner of record, you may file a claim directly with the clerk of court to request the surplus funds. You do not need a lawyer or anyone else to file this claim, but some people choose to get help if their situation is complicated. If you assign your rights to a surplus recovery company or other assignee, the total compensation for the assignment may not exceed 12 percent of the surplus.
Unclaimed Surplus After One Year One year after the foreclosure sale, any surplus funds still held by the clerk of court are presumed unclaimed and are sent to the Florida Department of Financial Services as unclaimed property. The money is not lost. From that point on, only the owner of record (or the beneficiary of an owner who has died) may claim it, but the claim is made to the Department, not the clerk.
Special Note on Tax-Deed Surplus Surplus from tax-deed sales is a separate process not covered on this page.
Example
Example scenario:
Suppose your home is sold at a judicial foreclosure sale for $320,000. The final judgment entered by the court orders the clerk of court to pay $280,000 to the lender and $5,000 in court costs. There is a second mortgage (a subordinate lienholder) for $10,000, and unpaid HOA dues of $2,000 (another subordinate lienholder). Here’s how the surplus is distributed:
- Total sale price: $320,000
- Amounts paid per final judgment: $285,000 ($280,000 to lender + $5,000 costs)
- Surplus: $35,000
Distribution order:
- Final judgment amounts: $285,000 paid first.
- Subordinate lienholders: If the second mortgage holder and HOA both file timely claims, $10,000 goes to the second mortgage holder and $2,000 to the HOA.
- Owner of record: The remaining $23,000 is available to the owner of record as of the date the lis pendens was filed, if they file a claim with the clerk of court.
If no one claims the $23,000 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 it, by applying to the Department.
Common pitfalls
- Assuming the lender holds the surplus: In Florida, only the clerk of court holds surplus funds after a judicial foreclosure sale.
- Missing subordinate lienholder claims: If a subordinate lienholder files a timely claim, they are paid before the owner of record.
- Not filing a claim: The owner of record must file a claim with the clerk of court to receive surplus funds. Waiting too long means the funds are sent to the state after one year.
- Confusing foreclosure surplus with tax-deed surplus: These are different processes with different rules and deadlines.
- Assigning rights without understanding the cost: If you assign your rights to a surplus recovery company or other assignee, their compensation cannot exceed 12 percent of the surplus, but you may receive less than the full amount.
Summary
- Florida is a judicial foreclosure state; the clerk of court holds any surplus funds from a foreclosure sale.
- Surplus is paid first to amounts in the final judgment, then to subordinate lienholders who file timely claims, and finally 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, but it is not lost.
- The owner of record or the beneficiary of a deceased owner may claim surplus from the clerk or, after one year, from the Department.
- Next steps: If you believe surplus funds may be available from a foreclosure sale, contact the clerk of court to check the status and consider whether you want to file a claim yourself or seek help if your situation is complex.
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 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?
After a judicial foreclosure sale in Florida, the surplus funds are held by the clerk of court in the court registry, not by the lender or their attorney.
What is the order of payment for foreclosure surplus funds in Florida?
The clerk of court pays surplus funds first to amounts specified in the final judgment, then to subordinate lienholders who file timely claims, and finally to the owner of record as of the date the lis pendens was filed.
What happens if surplus funds are not claimed within one year?
One year after the sale, any surplus funds still held by the clerk of court are sent to the Florida Department of Financial Services as unclaimed property. The money is not lost, but from then on only the owner of record or the beneficiary of a deceased owner may claim it.
Can I claim surplus funds myself, or do I need a lawyer?
You may file a claim for surplus funds directly with the clerk of court. You do not need a lawyer or anyone else to do this, though some people choose to get help if their situation is complicated.
Is the process for tax-deed surplus the same as foreclosure surplus?
No, surplus from tax-deed sales is a separate process with different rules and deadlines. This page covers only foreclosure surplus from judicial sales.