Florida Tax Deed Surplus vs. Mortgage Foreclosure Surplus: Key Differences for Former Owners

Short answer

Florida tax deed surplus and mortgage foreclosure surplus are two very different processes. The surplus from a tax deed sale 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. If you recently lost your property due to unpaid taxes, it is important to understand how the surplus is handled and what steps you need to take to claim any funds you may be entitled to.

Why it matters

Losing a property at a tax deed sale can be overwhelming, but many former owners are unaware that there may be surplus funds held by the clerk of court after the sale. Understanding the difference between a tax deed surplus and a mortgage foreclosure surplus is crucial because:

• The process for claiming surplus funds is different for tax deed sales than for mortgage foreclosures.
• 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 order in which surplus funds are distributed is set by law: governmental liens are paid first, then other lienholders (senior before junior), and only then the former owner (the titleholder of record).
• There is a strict timeline: 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 the 120 days, the titleholder of record is presumed entitled and the funds are handled under Florida’s unclaimed property law.

If you do not act within the required timeframe, you may face delays or additional steps to recover any surplus funds.

Steps

If you are a former owner whose property was sold at a Florida tax deed sale, here’s what you should do:

Understand the process A 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. Watch for the notice After the sale, the clerk of court will mail a notice of surplus funds to interested parties. Review the surplus calculation 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. File a claim if needed To claim surplus funds, a sworn written claim must be filed with the clerk of court within 120 days of the date of the notice. Lienholders must file within this period or they are barred from claiming. This bar does not apply to the property owner. Understand the order of payment The clerk pays governmental liens first, then other lienholders in order of priority, and finally the former owner. Prepare for possible court involvement If there are conflicting claims, the clerk may ask the circuit court to decide who is paid, in a case called an interpleader. If no claim is filed If no claim is filed within the 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

This is a neutral hypothetical example for illustration only.

Suppose your homestead property is sold at a tax deed sale for $150,000. The unpaid property taxes and costs of sale total $10,000. The assessed value of your home is $100,000, so one-half of the assessed value ($50,000) is included in the opening bid and is part of the surplus.

• Sale price: $150,000
• Unpaid taxes and costs: $10,000
• One-half of assessed value (homestead): $50,000 (included in opening bid and part of surplus)
• Surplus: $150,000 (sale price) minus $10,000 (taxes/costs) = $140,000
• Of this $140,000, $50,000 is the homestead half, and the remaining $90,000 is the amount above taxes/costs and the homestead half.

The clerk of court holds the $140,000 surplus. Governmental liens are paid first, then other lienholders, and finally, if any funds remain, the former owner can claim the rest by filing a sworn written claim within 120 days of the notice.

Key Point: The surplus is not just what the property sold for above the taxes and costs—it also includes one-half of the assessed value for homestead properties.

Common pitfalls

• Confusing tax deed surplus with mortgage foreclosure surplus
  • The rules and timelines are different. Do not rely on mortgage foreclosure procedures for a tax deed sale.
• Missing the 120-day deadline
  • Lienholders who do not file a claim with the clerk of court within 120 days are barred from claiming. This does not apply to the former owner, but waiting can complicate the process.
• Not understanding the order of payment
  • Governmental liens are paid first, then other lienholders, and only then the former owner. Failing to recognize this can lead to unrealistic expectations about what you may receive.
• Overlooking the homestead half
  • For homestead properties, one-half of the assessed value is part of the surplus, even if the property sells for the opening bid.
• Not checking for conflicting claims
  • If multiple parties file claims, the process can become more complex and may require court involvement.

Summary

• Florida tax deed surplus is the amount the property sold for above the unpaid taxes and 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 and distributed in a specific order: governmental liens 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. Lienholders are barred if they miss this deadline, but the bar does not apply to the property owner.
• If no claim is filed within the 120 days, the titleholder of record is presumed entitled and the funds are handled under Florida’s unclaimed property law.
• Next steps: If you recently lost your property in a tax deed sale, watch for the notice from the clerk of court and consider reviewing your options for filing a claim. If you have questions about surplus funds already sent to the Florida Department of Financial Services, legal guidance may help clarify your rights.

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

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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.

How is a tax deed sale different from a mortgage foreclosure?

A 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 a lender foreclosing on a mortgage.

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

The clerk of court pays governmental liens first, then other lienholders in order of priority, and finally the former owner (the titleholder of record) if any funds remain.

What is the deadline to claim surplus funds after a tax deed sale?

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. Lienholders who do not file in that time are barred, but this bar does not apply to the property owner.

What happens if no one files a claim for the surplus within 120 days?

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