Tax Deed Surplus: Hard-And-Fast Deadline for Claims Enacted into Florida Law

Posted on December 4, 2017, by Juli Groot

On April 9, 2018, Governor Scott signed House Bill 1383 into law, amending Florida’s tax deed sale statutes. The most substantial implication for lienholders is the establishment of a new deadline for claiming an interest in surplus proceeds from tax deed sales.

Prior to the amendment, the only deadline was the clerk’s option to remit surplus funds to the State if no claims were received within a year of the clerk’s notice of surplus. Section 197.582(3), Florida Statutes, now establishes a firm 120-day deadline for claiming surplus proceeds — at least for lienholders.

The clerk is still authorized to accept claims filed by prior titleholders after the 120-day deadline. In fact, prior titleholders are the only category of claimants who are not barred from asserting a claim after the 120-day period.

If a lienholder fails to file a claim on or before the close of business on the 120^th day following the date stated on the clerk’s notice of tax deed sale surplus, the lienholder’s claim will be forever barred. Amended Section 197.582(5) clearly bars any claim, other than a claim filed by a prior titleholder, filed after the 120-day deadline and bars any distribution of the surplus funds to lienholders who fail to file a claim by the deadline.

Additionally, revised Section 197.582(6) states that failure to file a claim within the 120-day deadline constitutes a waiver of any interest to the surplus funds in an interpleader action filed to adjudicate conflicting claims. Again, the amended law carves out an exception to the 120-day deadline for prior titleholders with regard to interpleader actions.

The amendments require the clerk to send a written notice of surplus funds to various parties, including all lienholders of record. The 120-day deadline begins on the date stated on the clerk’s notice. The notice must be provided in a substantially equivalent form to that established by revised Section 197.582(2)(a), must include a form for making a claim, and must include details regarding how to file the claim. Amended Section 197.582(3) provides the required form to claim surplus funds.

The amendments will become effective July 1, 2018; however, the 120-day deadline and other new provisions apply only to tax deed applications filed on or after October 1, 2018. Given the fact that a tax deed sale may not occur until at least thirty days after a tax deed application is filed, the 120-day deadline will first be triggered for some tax deed sales occurring in November of 2018.

The full statutory text is available here: CHAPTER 2018-160, Committee Substitute for House Bill No. 1383.

The above is intended to inform firm clients and friends about recent developments in the law, including analysis of statutes and new case decisions. This update should not be construed as legal advice or a legal opinion, and readers should not act upon the information contained herein without seeking the advice of legal counsel.