Short answer
After a Florida tax deed sale, the clerk of court pays out surplus funds in a strict order: governmental liens are paid first, then other lienholders (in order of priority), and finally the former owner. 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
Understanding who gets paid first from Florida tax deed surplus funds is crucial if you are the former owner of a property sold for unpaid taxes. The order of payment affects how much, if any, of the surplus you may receive. Missing deadlines or misunderstanding the process can mean losing out on funds that could help you move forward after the loss of your property. The surplus is held by the clerk of court, and knowing your rights and the process can help you avoid unnecessary delays or disputes.
Steps
If your property was sold at a Florida tax deed sale, here is how the surplus distribution process works:
Tax Deed Sale Occurs When property taxes go unpaid, the holder of a tax certificate can apply for a tax deed. The clerk of the circuit court then sells the property at a public auction. This is a different process from a mortgage foreclosure.
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. The clerk of court holds the surplus funds.
Notice of Surplus The clerk mails a notice of surplus funds to parties who may have an interest.
Filing a Claim A sworn written claim must be filed with the clerk within 120 days of the date of the notice. Lienholders who do not file within 120 days are barred from receiving payment. This bar does not apply to the property owner.
Order of Payment The clerk pays out the surplus in this order: Governmental liens (such as code enforcement or municipal liens) Other lienholders, with senior liens paid before junior liens The former owner (titleholder of record)
Conflicting Claims If there are conflicting claims, the clerk may ask the circuit court to decide who is paid, in a case called an interpleader.
Unclaimed Surplus If no claim is filed within the 120 days, the titleholder of record is presumed entitled to the surplus, 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 for illustration only.
Suppose your homestead property is sold at a tax deed auction for $150,000. The unpaid taxes and costs of the sale total $10,000. The assessed value of your homestead is $100,000, so the opening bid included $50,000 (one-half of the assessed value). The surplus is calculated as follows:
- Sale price: $150,000
- Minus unpaid taxes and costs: $10,000
- Surplus: $140,000
- Of this, $50,000 (one-half of the assessed value) is included as part of the surplus for homestead property.
The clerk of court holds the $140,000 surplus. If there is a $20,000 governmental lien and a $30,000 mortgage lien, the order of payment would be:
- $20,000 to pay off the governmental lien
- $30,000 to the mortgage lienholder (if they file a timely claim)
- The remaining $90,000 to the former owner (if no other liens exist and all claims are timely)
Key Point: The former owner can file a claim for surplus funds directly with the clerk of court. No attorney is required, but legal guidance may help if there are disputes or complex liens.
Common pitfalls
- Confusing tax deed sales with mortgage foreclosures: The surplus process and rules are different. Do not rely on foreclosure surplus rules.
- Missing the 120-day claim window: Lienholders who do not file within 120 days of the notice are barred from payment. This does not apply to the former owner, but it can affect how much is left for you.
- Overlooking governmental liens: These are always paid first, which can significantly reduce the surplus available to the former owner.
- Not understanding the homestead rule: For homestead property, one-half of the assessed value is included in the surplus, even if no one bids above the opening bid.
- Assuming you need a lawyer to file a claim: The former owner may file a claim directly with the clerk of court.
- Failing to respond to conflicting claims: If multiple parties claim the surplus, the process may go to court (interpleader), which can delay payment.
Summary
- The surplus from a Florida tax deed sale is the amount the property sold for above unpaid taxes and sale costs. For homestead property, one-half of the assessed value is also part of the surplus.
- The clerk of court pays governmental liens first, then other lienholders (senior before junior), then the former owner.
- Lienholders must file a sworn claim with the clerk within 120 days of the notice of surplus funds. The former owner is not barred by this deadline.
- 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.
- Next steps: If you are the former owner, review any notice of surplus funds you receive and consider filing a claim with the clerk of court. If you have questions about liens or conflicting claims, consider seeking legal advice. 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.
Who gets paid first from Florida tax deed surplus funds?
Governmental liens are paid first, then other lienholders (senior before junior), and finally the former owner (titleholder of record).
How long do I have to file a claim for surplus funds?
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 within that time are barred, but this does not apply to the property owner.
What happens if multiple people claim the surplus?
If there are conflicting claims, the clerk may ask the circuit court to decide who is paid, in a case called an interpleader.
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.