Senate Bill sb0890c1
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Florida Senate - 2001 CS for SB 890
By the Committee on Banking and Insurance; and Senator
Campbell
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1 A bill to be entitled
2 An act relating to mortgages; amending s.
3 697.07, F.S.; providing that rents in the
4 control of a mortgagor are subject to
5 assignment of rents; correcting provisions
6 relating to assignment of rents; providing for
7 expedited procedure under certain conditions;
8 providing that a hearing and an adjudication
9 that requested attorney's fees are reasonable
10 are not necessary under certain conditions;
11 providing that attorney's fees when provided in
12 a note or mortgage constitute liquidated
13 damages; amending s. 702.10, F.S.; specifying
14 information to be included in an order to show
15 cause why a final judgment of foreclosure
16 should not be entered; providing that a hearing
17 on attorney's fees is unnecessary under certain
18 circumstances; requiring the court to enter a
19 final judgment of foreclosure under certain
20 circumstances; providing an effective date.
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22 Be It Enacted by the Legislature of the State of Florida:
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24 Section 1. Section 697.07, Florida Statutes, is
25 amended to read:
26 697.07 Assignment of rents.--
27 (1) A mortgage or separate instrument may provide for
28 an assignment of rents of real property or any interest
29 therein as security for repayment of an indebtedness.
30 (2) If such an assignment is made, the mortgagee shall
31 hold a lien on the rents, and the lien created by the
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Florida Senate - 2001 CS for SB 890
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1 assignment shall be perfected and effective against third
2 parties upon recordation of the mortgage or separate
3 instrument in the public records of the county in which the
4 real property is located, according to law.
5 (3) Unless otherwise agreed to in writing by the
6 mortgagee and mortgagor, the assignment of rents shall be
7 enforceable upon the mortgagor's default and written demand
8 for the rents made by the mortgagee to the mortgagor,
9 whereupon the mortgagor shall turn over all rents in the
10 possession or control of the mortgagor at the time of the
11 written demand or collected thereafter (the "collected rents")
12 to the mortgagee less payment of any expenses authorized by
13 the mortgagee in writing.
14 (4) Upon application by the mortgagee or mortgagor, in
15 a foreclosure action, and notwithstanding any asserted
16 defenses or counterclaims of the mortgagor, a court of
17 competent jurisdiction, pending final adjudication of any
18 action, may require the mortgagor to deposit the collected
19 rents into the registry of the court, or in such other
20 depository as the court may designate. However, the court may
21 authorize the use of the collected rents, before deposit into
22 the registry of the court or other depository, to:
23 (a) Pay the reasonable expenses solely to protect,
24 preserve, and operate the real property, including, without
25 limitation, real estate taxes and insurance;
26 (b) Escrow sums required by the mortgagee mortgagor or
27 separate assignment of rents assignment-of-rents instrument;
28 and
29 (c) Make payments to the mortgagee.
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Florida Senate - 2001 CS for SB 890
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1 The court shall require the mortgagor to account to the court
2 and the mortgagee for the receipt and use of the collected
3 rents and may also impose other conditions on the mortgagor's
4 use of the collected rents.
5 (5) Nothing herein shall preclude the court from
6 granting any other appropriate relief regarding the collected
7 rents pending final adjudication of the action. The
8 undisbursed collected rents remaining in the possession of the
9 mortgagor or in the registry of the court, or in such other
10 depository as ordered by the court, shall be disbursed at the
11 conclusion of the action in accordance with the court's final
12 judgment or decree.
13 (6) The court shall expedite the hearing on the
14 application by the mortgagee or mortgagor to enforce the its
15 assignment of rents. The procedures authorized by this
16 statute are in addition to any other rights or remedies of the
17 mortgagee or mortgagor under the mortgage, separate assignment
18 of rents assignment-of-rents instrument, promissory note, at
19 law, or in equity.
20 (7) Nothing herein shall alter the lien priorities,
21 rights, or interests among mortgagees or other lienholders or
22 alter the rights of the mortgagee under the mortgage, separate
23 assignment of rents assignment-of-rents instrument, at law or
24 in equity, concerning rents collected before the written
25 demand by the mortgagee. A mortgagee's enforcement of its
26 assignment assignments of rents under this statute shall not
27 operate to transfer title to any rents not received by the
28 mortgagee.
29 (8) Any moneys received by the mortgagee pursuant to
30 this statute shall be applied by the mortgagee in accordance
31 with the mortgage, separate assignment of rents
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1 assignment-of-rents instrument, or promissory note, and the
2 mortgagee shall account to the mortgagor for such application.
3 Section 2. (1) In uncontested mortgage-foreclosure
4 proceedings in which the mortgagee waives the right to recoup
5 any deficiency judgment, the court shall enter final judgment
6 within 90 days from the date of the close of pleadings. For
7 the purposes of this subsection a mortgage-foreclosure
8 proceeding is uncontested if an answer not contesting the
9 foreclosure has been filed or a default judgment has been
10 entered by the court.
11 (2) In a mortgage foreclosure proceeding, when a
12 default judgment has been entered against the mortgagor and
13 the note or mortgage provides for the award of reasonable
14 attorney's fees, it is not necessary for the court to hold a
15 hearing or adjudge the requested attorney's fees to be
16 reasonable if the fees do not exceed 3 percent of the
17 principal amount owed at the time of filing the complaint,
18 even if the note or mortgage does not specify the percentage
19 of the original amount that would be paid as liquidated
20 damages. Such fees constitute liquidated damages in any
21 proceeding to enforce the note or mortgage. This section does
22 not preclude a challenge to the reasonableness of the
23 attorney's fees.
24 Section 3. Subsection (1) of section 702.10, Florida
25 Statutes, is amended to read:
26 702.10 Order to show cause; entry of final judgment of
27 foreclosure; payment during foreclosure.--
28 (1) After a complaint in a foreclosure proceeding has
29 been filed, the mortgagee may request an order to show cause
30 for the entry of final judgment and the court shall
31 immediately review the complaint. If, upon examination of the
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1 complaint, the court finds that the complaint is verified and
2 alleges a cause of action to foreclose on real property, the
3 court shall promptly issue an order directed to the defendant
4 to show cause why a final judgment of foreclosure should not
5 be entered.
6 (a) The order shall:
7 1. Set the date and time for hearing on the order to
8 show cause. However, the date for the hearing may shall not
9 be set sooner than 20 days after the service of the order.
10 When Where service is obtained by publication, the date for
11 the hearing may shall not be set sooner than 30 days after the
12 first publication. The hearing must be held within 60 days
13 after the date of service.
14 2. Direct the time within which service of the order
15 to show cause and the complaint must shall be made upon the
16 defendant.
17 3. State that the filing of defenses by a motion or by
18 a verified or sworn answer at or before the hearing to show
19 cause constitutes cause for the court not to enter the
20 attached final judgment.
21 4. State that the defendant has the right to file
22 affidavits or other papers at the time of the hearing and may
23 appear personally or by way of an attorney at the hearing.
24 5. State that, if the defendant files defenses by a
25 motion, the hearing time may be used to hear the defendant's
26 motion.
27 6. State that, if the defendant fails to appear at the
28 hearing to show cause or fails to file defenses by a motion or
29 by a verified or sworn answer or files an answer not
30 contesting the foreclosure, the defendant may be considered
31 deemed to have waived the right to a hearing and in such case
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1 the court may enter a final judgment of foreclosure ordering
2 the clerk of the court to conduct a foreclosure sale.
3 7. State that if the mortgage provides for reasonable
4 attorney's fees and the requested attorney's fees do not
5 exceed 3 percent of the principal amount owed at the time of
6 filing the complaint, it is unnecessary for the court to hold
7 a hearing or adjudge the requested attorney's fees to be
8 reasonable.
9 8.7. Attach the final judgment of foreclosure the
10 court will enter, if the defendant waives the right to be
11 heard at the hearing on the order to show cause.
12 9.8. Require the mortgagee to serve a copy of the
13 order to show cause on the mortgagor in the following manner:
14 a. If the mortgagor has been served with the complaint
15 and original process, service of the order may be made in the
16 manner provided in the Florida Rules of Civil Procedure.
17 b. If the mortgagor has not been served with the
18 complaint and original process, the order to show cause,
19 together with the summons and a copy of the complaint, shall
20 be served on the mortgagor in the same manner as provided by
21 law for original process.
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23 Any final judgment of foreclosure entered under this
24 subsection is shall be for in rem relief only. Nothing in this
25 subsection shall preclude the entry of a deficiency judgment
26 where otherwise allowed by law.
27 (b) The right to be heard at the hearing to show cause
28 is waived if the defendant, after being served as provided by
29 law with an order to show cause, engages in conduct that
30 clearly shows that the defendant has relinquished the right to
31 be heard on that order. The defendant's failure to file
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1 defenses by a motion or by a sworn or verified answer or to
2 appear at the hearing duly scheduled on the order to show
3 cause presumptively constitutes conduct that clearly shows
4 that the defendant has relinquished the right to be heard. If
5 a defendant files defenses by a motion or by a verified or
6 sworn answer at or before the hearing, such action constitutes
7 cause and precludes shall preclude the entry of a final
8 judgment at the hearing to show cause.
9 (c) In a mortgage foreclosure proceeding, when a
10 default judgment has been entered against the mortgagor and
11 the note or mortgage provides for the award of reasonable
12 attorney's fees, it is unnecessary for the court to hold a
13 hearing or adjudge the requested attorney's fees to be
14 reasonable if the fees do not exceed 3 percent of the
15 principal amount owed on the note or mortgage at the time of
16 filing, even if the note or mortgage does not specify the
17 percentage of the original amount that would be paid as
18 liquidated damages.
19 (d)(c) If the court finds that the defendant has
20 waived the right to be heard as provided in paragraph (b), the
21 court shall may promptly enter a final judgment of
22 foreclosure. If the court finds that the defendant has not
23 waived the right to be heard on the order to show cause, the
24 court shall then determine whether there is cause not to enter
25 a final judgment of foreclosure. If the court finds that the
26 defendant has not shown cause, the court shall may promptly
27 enter a judgment of foreclosure.
28 Section 4. This act shall take effect July 1, 2001.
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Florida Senate - 2001 CS for SB 890
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 SB 890
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4 Amends s. 702.10, F.S., which provides an expedited process
for mortgage foreclosure proceedings, to require, rather than
5 allow, the court to promptly enter a judgment of foreclosure,
if the defendant has not shown cause not to enter a final
6 judgment.
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