Senate Bill sb0890er

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    2001 Legislature                  CS for SB 890, 1st Engrossed



  1                                 

  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 that the petitioner or

21         petitioner's attorney is responsible for

22         placing the legal advertisement, publication,

23         or notice of a foreclosure proceeding;

24         providing an effective date.

25  

26  Be It Enacted by the Legislature of the State of Florida:

27  

28         Section 1.  Section 697.07, Florida Statutes, is

29  amended to read:

30         697.07  Assignment of rents.--

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    2001 Legislature                  CS for SB 890, 1st Engrossed



  1         (1)  A mortgage or separate instrument may provide for

  2  an assignment of rents of real property or any interest

  3  therein as security for repayment of an indebtedness.

  4         (2)  If such an assignment is made, the mortgagee shall

  5  hold a lien on the rents, and the lien created by the

  6  assignment shall be perfected and effective against third

  7  parties upon recordation of the mortgage or separate

  8  instrument in the public records of the county in which the

  9  real property is located, according to law.

10         (3)  Unless otherwise agreed to in writing by the

11  mortgagee and mortgagor, the assignment of rents shall be

12  enforceable upon the mortgagor's default and written demand

13  for the rents made by the mortgagee to the mortgagor,

14  whereupon the mortgagor shall turn over all rents in the

15  possession or control of the mortgagor at the time of the

16  written demand or collected thereafter (the "collected rents")

17  to the mortgagee less payment of any expenses authorized by

18  the mortgagee in writing.

19         (4)  Upon application by the mortgagee or mortgagor, in

20  a foreclosure action, and notwithstanding any asserted

21  defenses or counterclaims of the mortgagor, a court of

22  competent jurisdiction, pending final adjudication of any

23  action, may require the mortgagor to deposit the collected

24  rents into the registry of the court, or in such other

25  depository as the court may designate. However, the court may

26  authorize the use of the collected rents, before deposit into

27  the registry of the court or other depository, to:

28         (a)  Pay the reasonable expenses solely to protect,

29  preserve, and operate the real property, including, without

30  limitation, real estate taxes and insurance;

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    2001 Legislature                  CS for SB 890, 1st Engrossed



  1         (b)  Escrow sums required by the mortgagee mortgagor or

  2  separate assignment of rents assignment-of-rents instrument;

  3  and

  4         (c)  Make payments to the mortgagee.

  5  

  6  The court shall require the mortgagor to account to the court

  7  and the mortgagee for the receipt and use of the collected

  8  rents and may also impose other conditions on the mortgagor's

  9  use of the collected rents.

10         (5)  Nothing herein shall preclude the court from

11  granting any other appropriate relief regarding the collected

12  rents pending final adjudication of the action. The

13  undisbursed collected rents remaining in the possession of the

14  mortgagor or in the registry of the court, or in such other

15  depository as ordered by the court, shall be disbursed at the

16  conclusion of the action in accordance with the court's final

17  judgment or decree.

18         (6)  The court shall expedite the hearing on the

19  application by the mortgagee or mortgagor to enforce the its

20  assignment of rents.  The procedures authorized by this

21  statute are in addition to any other rights or remedies of the

22  mortgagee or mortgagor under the mortgage, separate assignment

23  of rents assignment-of-rents instrument, promissory note, at

24  law, or in equity.

25         (7)  Nothing herein shall alter the lien priorities,

26  rights, or interests among mortgagees or other lienholders or

27  alter the rights of the mortgagee under the mortgage, separate

28  assignment of rents assignment-of-rents instrument, at law or

29  in equity, concerning rents collected before the written

30  demand by the mortgagee.  A mortgagee's enforcement of its

31  assignment assignments of rents under this statute shall not


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  1  operate to transfer title to any rents not received by the

  2  mortgagee.

  3         (8)  Any moneys received by the mortgagee pursuant to

  4  this statute shall be applied by the mortgagee in accordance

  5  with the mortgage, separate assignment of rents

  6  assignment-of-rents instrument, or promissory note, and the

  7  mortgagee shall account to the mortgagor for such application.

  8         Section 2.  (1)  In uncontested mortgage-foreclosure

  9  proceedings in which the mortgagee waives the right to recoup

10  any deficiency judgment, the court shall enter final judgment

11  within 90 days from the date of the close of pleadings. For

12  the purposes of this subsection a mortgage-foreclosure

13  proceeding is uncontested if an answer not contesting the

14  foreclosure has been filed or a default judgment has been

15  entered by the court.

16         (2)  In a mortgage foreclosure proceeding, when a

17  default judgment has been entered against the mortgagor and

18  the note or mortgage provides for the award of reasonable

19  attorney's fees, it is not necessary for the court to hold a

20  hearing or adjudge the requested attorney's fees to be

21  reasonable if the fees do not exceed 3 percent of the

22  principal amount owed at the time of filing the complaint,

23  even if the note or mortgage does not specify the percentage

24  of the original amount that would be paid as liquidated

25  damages. Such fees constitute liquidated damages in any

26  proceeding to enforce the note or mortgage. This section does

27  not preclude a challenge to the reasonableness of the

28  attorney's fees.

29         Section 3.  Subsection (1) of section 702.10, Florida

30  Statutes, is amended to read:

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    2001 Legislature                  CS for SB 890, 1st Engrossed



  1         702.10  Order to show cause; entry of final judgment of

  2  foreclosure; payment during foreclosure.--

  3         (1)  After a complaint in a foreclosure proceeding has

  4  been filed, the mortgagee may request an order to show cause

  5  for the entry of final judgment and the court shall

  6  immediately review the complaint.  If, upon examination of the

  7  complaint, the court finds that the complaint is verified and

  8  alleges a cause of action to foreclose on real property, the

  9  court shall promptly issue an order directed to the defendant

10  to show cause why a final judgment of foreclosure should not

11  be entered.

12         (a)  The order shall:

13         1.  Set the date and time for hearing on the order to

14  show cause.  However, the date for the hearing may shall not

15  be set sooner than 20 days after the service of the order.

16  When Where service is obtained by publication, the date for

17  the hearing may shall not be set sooner than 30 days after the

18  first publication. The hearing must be held within 60 days

19  after the date of service. Failure to hold the hearing within

20  such time does not affect the validity of the order to show

21  cause or the jurisdiction of the court to issue subsequent

22  orders.

23         2.  Direct the time within which service of the order

24  to show cause and the complaint must shall be made upon the

25  defendant.

26         3.  State that the filing of defenses by a motion or by

27  a verified or sworn answer at or before the hearing to show

28  cause constitutes cause for the court not to enter the

29  attached final judgment.

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  1         4.  State that the defendant has the right to file

  2  affidavits or other papers at the time of the hearing and may

  3  appear personally or by way of an attorney at the hearing.

  4         5.  State that, if the defendant files defenses by a

  5  motion, the hearing time may be used to hear the defendant's

  6  motion.

  7         6.  State that, if the defendant fails to appear at the

  8  hearing to show cause or fails to file defenses by a motion or

  9  by a verified or sworn answer or files an answer not

10  contesting the foreclosure, the defendant may be considered

11  deemed to have waived the right to a hearing and in such case

12  the court may enter a final judgment of foreclosure ordering

13  the clerk of the court to conduct a foreclosure sale.

14         7.  State that if the mortgage provides for reasonable

15  attorney's fees and the requested attorney's fees do not

16  exceed 3 percent of the principal amount owed at the time of

17  filing the complaint, it is unnecessary for the court to hold

18  a hearing or adjudge the requested attorney's fees to be

19  reasonable.

20         8.7.  Attach the final judgment of foreclosure the

21  court will enter, if the defendant waives the right to be

22  heard at the hearing on the order to show cause.

23         9.8.  Require the mortgagee to serve a copy of the

24  order to show cause on the mortgagor in the following manner:

25         a.  If the mortgagor has been served with the complaint

26  and original process, service of the order may be made in the

27  manner provided in the Florida Rules of Civil Procedure.

28         b.  If the mortgagor has not been served with the

29  complaint and original process, the order to show cause,

30  together with the summons and a copy of the complaint, shall

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  1  be served on the mortgagor in the same manner as provided by

  2  law for original process.

  3  

  4  Any final judgment of foreclosure entered under this

  5  subsection is shall be for in rem relief only. Nothing in this

  6  subsection shall preclude the entry of a deficiency judgment

  7  where otherwise allowed by law.

  8         (b)  The right to be heard at the hearing to show cause

  9  is waived if the defendant, after being served as provided by

10  law with an order to show cause, engages in conduct that

11  clearly shows that the defendant has relinquished the right to

12  be heard on that order.  The defendant's failure to file

13  defenses by a motion or by a sworn or verified answer or to

14  appear at the hearing duly scheduled on the order to show

15  cause presumptively constitutes conduct that clearly shows

16  that the defendant has relinquished the right to be heard.  If

17  a defendant files defenses by a motion or by a verified or

18  sworn answer at or before the hearing, such action constitutes

19  cause and precludes shall preclude the entry of a final

20  judgment at the hearing to show cause.

21         (c)  In a mortgage foreclosure proceeding, when a

22  default judgment has been entered against the mortgagor and

23  the note or mortgage provides for the award of reasonable

24  attorney's fees, it is unnecessary for the court to hold a

25  hearing or adjudge the requested attorney's fees to be

26  reasonable if the fees do not exceed 3 percent of the

27  principal amount owed on the note or mortgage at the time of

28  filing, even if the note or mortgage does not specify the

29  percentage of the original amount that would be paid as

30  liquidated damages.

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  1         (d)(c)  If the court finds that the defendant has

  2  waived the right to be heard as provided in paragraph (b), the

  3  court shall may promptly enter a final judgment of

  4  foreclosure.  If the court finds that the defendant has not

  5  waived the right to be heard on the order to show cause, the

  6  court shall then determine whether there is cause not to enter

  7  a final judgment of foreclosure.  If the court finds that the

  8  defendant has not shown cause, the court shall may promptly

  9  enter a judgment of foreclosure.

10         Section 4.  Whenever a legal advertisement,

11  publication, or notice relating to a foreclosure proceeding is

12  required to be placed in a newspaper, it is the responsibility

13  of the petitioner or petitioner's attorney to place such

14  advertisement, publication, or notice. The advertisement,

15  publication, or notice shall be placed directly by the

16  attorney for the petitioner, by the petitioner if acting pro

17  se, or by the clerk of the court.

18         Section 5.  This act shall take effect July 1, 2001.

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