Florida Surplus Funds: Claim Filing, Deadlines, and Disputes

If your Florida home sold at a foreclosure or tax deed auction for more than what you owed, the extra money belongs to you. These leftover proceeds are called Florida surplus funds, and you claim them by filing a sworn form with the clerk of court in the county where the sale happened. Two firm deadlines control whether you actually collect: one year for mortgage foreclosure surplus before it goes to the state, and 120 days for tax deed surplus before non-owner claims are barred forever.

What Florida Surplus Funds Are

Surplus is whatever cash is left over after the auction pays off the debt that caused the sale. The two types come from different situations and are governed by different statutes.

In a mortgage foreclosure, the lender takes a judgment and the property is auctioned. The surplus is the winning bid minus the judgment amount, accrued interest, and clerk’s fees. That money sits in the court registry under Florida Statute 45.032.¹

In a tax deed sale, the county auctions the property because property taxes went unpaid. Surplus is what’s left after the winning bid covers unpaid taxes, interest, penalties, and administrative costs. This surplus follows Florida Statute 197.582, and its rules and timelines are separate from foreclosure surplus.²

Who Has a Right to the Money

Florida law sets a hierarchy. Junior lienholders whose interests were wiped out by the sale get paid first, in the order their liens were recorded in the public records. Common examples include second mortgages, HOA or condo assessment liens, judgment creditors, and construction liens. If a second mortgage was recorded before an HOA lien, the second mortgage is paid first. Any lienholder who was already paid in full out of the sale proceeds has no claim to the surplus.¹

After lienholders are paid, whatever remains goes to the former property owner. Florida law creates a rebuttable presumption that the “owner of record” — the person listed as the owner on the date the foreclosure lis pendens was filed — is entitled to that remainder. It is the ownership on the date the lawsuit was filed that matters, not ownership on the date of the auction.³

The Deadlines That Matter Most

This is where people lose money they were entitled to.

Mortgage Foreclosure: One Year

After the clerk issues a certificate of disbursements, the surplus is held for 60 days pending a court order. Subordinate lienholders should file their claims in that window. One year after the sale, any surplus that hasn’t been disbursed by court order is presumed unclaimed under Florida Statute 717.113 and gets transferred to the Florida Department of Financial Services.¹ You can still get the money back after that point, but it takes longer and involves an additional agency. File before the year runs out.

Tax Deed: 120 Days

Tax deed surplus is stricter. Anyone other than the property owner has 120 days from the date the clerk mails the surplus notice to file a written claim. The statute uses the phrase “forever barred” for late claims and applies it literally. If no claims of any kind arrive within the 120-day period, the clerk processes the funds as unclaimed property under Chapter 717.²

Filing a Mortgage Foreclosure Surplus Claim

Start by confirming how much surplus exists. After the sale, the clerk issues a certificate of disbursements showing the sale price, what was paid to the foreclosing lender, and the exact surplus remaining. That document is in the public court file for the foreclosure case.¹

Florida Statute 45.032 provides a specific form titled “Owner’s Claim for Mortgage Foreclosure Surplus.” You file it with the clerk of court in the county that handled the case. It’s a sworn statement, signed under penalty of perjury and notarized, in which you certify:

You were the owner of the property on the date the lis pendens was filed.
You do not owe money on any mortgage other than the one paid off by the foreclosure.
You do not owe money tied to a judgment, tax warrant, condo lien, or HOA assessment.
You are not currently in bankruptcy.
You have not sold or assigned your right to the surplus.

The form also asks for your current address and, if there were multiple owners, how the funds should be split among you.¹ Bring a government-issued photo ID; the clerk can require proof of identity before releasing funds. Having a copy of your deed is a good idea too.

If you are the only claimant and no subordinate lienholder has filed a competing claim, the court can enter an order directing the clerk to deduct any service charges and pay you the balance. No hearing is needed in that situation.¹

Filing a Tax Deed Surplus Claim

Under Florida Statute 197.582, the clerk first pays any recorded government liens, including tax certificates that were not part of the original tax deed application. What remains is held for the former owner and other eligible parties. The clerk then mails a surplus notice, and the 120-day clock starts on the date of that mailing. Holders of recorded government liens must also file within the 120 days. If the clerk receives conflicting claims, the clerk can file an interpleader action in circuit court so a judge can decide who gets what.²

When Someone Else Also Claims the Surplus

Competing claims are common when there is meaningful money at stake. If the owner files but acknowledges that other parties may have rights, or if any lienholder files, the court sets an evidentiary hearing to determine entitlement.¹ Subordinate lienholders are paid in recording order until the money runs out. Only after every valid lien claim is satisfied does the former owner receive anything. If the surplus is smaller than the total of valid lien claims, lower-priority lienholders and the owner get nothing.

If More Than a Year Has Passed

If a year went by after a foreclosure sale without a court order disbursing the surplus, the funds were presumed unclaimed under Florida Statute 717.113 and sent to the Florida Department of Financial Services.⁴ Search for them on the state’s unclaimed property portal at fltreasurehunt.gov.⁵ Florida holds unclaimed property indefinitely, so the money doesn’t disappear. Recovering it does mean filing a claim through the Department of Financial Services and documenting your right to the funds. If your foreclosure was more than a year ago, check that portal before doing anything else.

Watch Out for Recovery Companies

After a sale creates surplus, third-party “recovery” companies often contact former owners offering to collect the money for a fee. Some are legitimate. Many are not. The usual pitch asks you to sign over your surplus rights for a fraction of what they’re worth, or bakes in fees higher than the law permits.

Florida Statute 45.033 caps total compensation for anyone who buys or takes an assignment of your surplus rights at 12 percent of the surplus amount. Any agreement paying the company more than that fails to qualify under the statute. The written assignment must also carry specific disclosures. Before the sale, it must state the property’s assessed value, note that assessed value can differ from actual value, give the approximate debt, and give the approximate equity. After the sale, it must include the sale price and the surplus amount. In every case it must state that you do not need a lawyer or any representative to recover your surplus, and it must list every form of payment the company will receive. The assignment must be filed with the court within 60 days of the certificate of disbursements.³ If a court finds those requirements were not met, it can set the agreement aside and restore your right to the surplus.

The claim form itself says, in bold: “I understand that I am not required to have a lawyer or any other representation and I do not have to assign my rights to anyone else in order to claim any money to which I may be entitled.”¹ For a straightforward claim where you are the only owner and no lienholders are competing, filing yourself is manageable. Junior liens make it more complicated, but 12 percent of a $40,000 surplus is $4,800, which is real money to keep if you can handle the paperwork.

Taxes on the Money You Receive

Surplus funds are not tax-free from the IRS’s point of view. The IRS treats a foreclosure as a sale or exchange of real estate, and the full auction sale price, not just the surplus, is used to figure your gain or loss. You may receive a Form 1099-S reporting the total sale proceeds.⁶

If the property was your primary residence, Internal Revenue Code Section 121 may let you exclude up to $250,000 of gain, or $500,000 if you file jointly, as long as you owned and lived in the home for at least two of the five years before the sale.⁷ That exclusion usually wipes out federal tax on the surplus, because the gain rarely exceeds those thresholds. Investment properties don’t qualify, and any gain on a rental or second home is taxable. Talking with a tax professional before filing for the year you receive the surplus is worthwhile if the property was anything other than your primary residence.

1
The Florida Legislature. Florida Code 45.032 – Disbursement of Surplus Funds After Judicial Sale
2
Florida Senate. Florida Code 197.582 – Disbursement of Proceeds of Sale
3
Florida Senate. Florida Code 45.033 – Sale or Assignment of Rights to Surplus Funds in a Property Subject to Foreclosure
4
Florida Senate. Florida Code 717.113 – Property Held by Courts and Public Agencies
5
Florida Department of Financial Services. Florida’s Unclaimed Property
6
Internal Revenue Service. Instructions for Form 1099-S
7
Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence