HB 0065CS

CHAMBER ACTION



1The Civil Justice Committee recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to foreclosure proceedings; amending s.
745.031, F.S.; revising provisions for distribution of
8proceeds from a judicial sale; creating s. 45.032, F.S.;
9providing for disbursement of surplus funds after a
10judicial sale; providing definitions; specifying a form;
11establishing a presumption of entitlement to surplus funds
12in certain filings; providing for disbursement of surplus
13funds by the clerk of court; requiring notice to potential
14claimants; providing notice requirements; providing for
15service charges and fees for the clerk; authorizing the
16clerk to expend certain surplus funds for certain
17purposes; providing for treatment of surplus funds as
18unclaimed property under certain circumstances; requiring
19a disposition hearing under certain circumstances;
20specifying burden of proof; requiring the clerk to use
21certain fees for certain purposes; creating s. 45.033,
22F.S.; providing for a sale or assignment of rights to
23surplus funds in a foreclosure proceeding; creating a
24rebuttable presumption of entitlement to certain funds;
25providing requirements for transfers or assignments in
26rebuttal; providing for court action to set aside or
27rescind certain transfers or assignments under certain
28circumstances; providing for recovery of attorneys' fees;
29providing for nonapplication to certain instruments;
30specifying absence of effect on title or marketability of
31certain property or validity of certain liens; creating s.
32501.2078, F.S.; providing definitions; providing a civil
33penalty for knowingly using unfair or deceptive homeowner
34victimization methods, acts, or practices in residential
35foreclosure proceedings; specifying higher priority of an
36order of restitution or reimbursement over imposition of a
37civil penalty; providing for deposit of civil penalties
38into the Legal Affairs Revolving Trust Fund of the
39Department of Legal Affairs; allocating such funds for
40certain purposes; specifying nonapplication to certain
41encumbrances; amending s. 702.035, F.S.; limiting costs
42chargeable in a foreclosure proceeding; providing an
43effective date.
44
45Be It Enacted by the Legislature of the State of Florida:
46
47     Section 1.  Subsection (7) of section 45.031, Florida
48Statutes, is amended to read:
49     45.031  Judicial sales procedure.--In any sale of real or
50personal property under an order or judgment, the following
51procedure may be followed as an alternative to any other sale
52procedure if so ordered by the court:
53     (7)  DISBURSEMENTS OF PROCEEDS.--
54     (a)  On filing a certificate of title, the clerk shall
55disburse the proceeds of the sale in accordance with the order
56or final judgment and shall file a report of such disbursements
57and serve a copy of it on each party not in default, and on the
58Department of Revenue if the department was named as a defendant
59in the action or if the Agency for Workforce Innovation or the
60former Department of Labor and Employment Security was named as
61a defendant while the Department of Revenue was providing
62unemployment tax collection services under contract with the
63Agency for Workforce Innovation through an interagency agreement
64pursuant to s. 443.1316.
65     (b)  The certificate of disbursements shall be, in
66substantially the following form:
67
68(Caption of Action)
69
70
CERTIFICATE OF DISBURSEMENTS
71
72     The undersigned clerk of the court certifies that he or she
73disbursed the proceeds received from the sale of the property as
74provided in the order or final judgment to the persons and in
75the amounts as follows:
76Name     Amount
77
78
Total
79
80WITNESS my hand and the seal of the court on _____,   (year)  .
81       (Clerk)  
82     By   (Deputy Clerk)  
83
84     (c)  If no objections to the report are served within 10
85days after it is filed, the disbursements by the clerk shall
86stand approved as reported. If timely objections to the report
87are served, they shall be heard by the court. Service of
88objections to the report does not affect or cloud the title of
89the purchaser of the property in any manner.
90     (d)  If there are funds remaining after payment of all
91disbursements required by the final judgment of foreclosure and
92shown on the certificate of disbursements, the provisions of ss.
9345.032 and 45.033 apply.
94     Section 2.  Section 45.032, Florida Statutes, is created to
95read:
96     45.032  Disbursement of surplus funds after judicial
97sale.--
98     (1)  For purposes of this section and s. 45.033, the term:
99     (a)  "Notice of surplus funds" means a document in
100substantially the following form:
101
102(Caption of Action)
103
104
NOTICE OF SURPLUS FUNDS
105
106     The undersigned clerk of the court certifies that he or she
107disbursed the proceeds received from the sale of the property as
108provided in the order or final judgment to the persons named in
109the certificate of disbursements, and that surplus funds of
110$___________ remain and are subject to disbursement by the
111court.
112     It appears that ______________, as owner(s) of the property
113at the time that the foreclosure was filed, (is/are) entitled to
114payment of the surplus funds. The clerk of court will pay the
115surplus funds to the owner(s) unless an objection to payment of
116the surplus funds is filed with the court on or before
117______________________. If an objection is timely filed, a
118hearing will be set in order for the court to determine who is
119entitled to receive the surplus funds.
120     IF YOU ARE AN INDIVIDUAL AND ARE THE OWNER OF THE PROPERTY,
121YOU MAY CLAIM THESE FUNDS YOURSELF. YOU ARE NOT REQUIRED TO HAVE
122A LAWYER OR ANY OTHER REPRESENTATION AND YOU DO NOT HAVE TO
123ASSIGN YOUR RIGHTS TO ANYONE ELSE IN ORDER FOR YOU TO CLAIM ANY
124MONEY TO WHICH YOU ARE ENTITLED.
125
126WITNESS my hand and the seal of the court on _____,   (year)  .
127       (Clerk)  
128     By   (Deputy Clerk)  
129
130     (b)  "Owner of record" means the person or persons who
131appear to be the owner of the property on the date of the filing
132of the lis pendens. The clerk need not perform a title search
133and examination but may rely on the plaintiff's allegation of
134ownership in the complaint when determining the owner of record.
135     (c)  "Surplus funds" means the funds remaining after
136payment of all disbursements required by the final judgment of
137foreclosure and shown on the certificate of disbursements.
138     (2)  There is established a legal presumption that the
139owner of record on the date of the filing of a lis pendens is
140the person entitled to surplus funds. The surplus funds shall be
141paid to the owner of record on the date of the filing of the lis
142pendens unless a court rules otherwise.
143     (3)(a)  If the surplus funds are less than $200, the clerk,
144after deducting a $5 service charge, shall pay the surplus funds
145to the owner of record. The payment instrument may be furnished
146by regular mail to the last known address of the owner of
147record.
148     (b)  If the surplus funds are $200 or more, the following
149provisions apply:
150     1.  The clerk shall furnish a notice of surplus funds by
151certified mail to the following persons:
152     a.  The owner of record.
153     b.  All defendants in the action listed on the final
154judgment of foreclosure, except that:
155     (I)  A defendant whose claim was paid in full as shown on
156the certificate of disbursements need not be furnished a notice
157of surplus funds.
158     (II)  Any defendant named by position and not by actual
159name need not be furnished a notice of surplus funds. Examples
160of such defendants include, but are not limited to, defendants
161designated as "unknown tenant" or "unknown heir."
162     c.  If a suggestion of bankruptcy was filed in the action,
163the bankruptcy trustee.
164     d.  Any other person who appears from the record to be a
165person who may be entitled to the surplus funds. The plaintiff
166need not be given a notice of surplus funds.
167     2.  If the clerk is unsure as to who the owner of record
168is, the clerk may write "unknown" on the form and send the
169notice of surplus funds with a notice of hearing. The clerk may
170only receive one service charge for the mailing.
171     (4)  The clerk shall be entitled to a service charge of $5
172for each notice of surplus funds. The clerk may draw the service
173charge from the surplus funds upon mailing.
174     (5)  Unless an objection is filed within 30 days after the
175mailing of the notice of surplus funds, the clerk shall pay the
176surplus funds to the owner of record. If the location of the
177owner of record is unknown, the clerk may expend up to $250 of
178the surplus funds to conduct or contract for a search for the
179owner of record. If the search is unsuccessful and more than 90
180days have elapsed, the clerk shall treat the funds as unclaimed
181property, to be deposited with the Chief Financial Officer
182pursuant to chapter 717.
183     (6)  If an objection is filed or if the clerk is unable to
184determine the owner of record, the court shall set a hearing to
185determine the disposition of the surplus funds. The clerk shall
186prepare a notice of the hearing and shall furnish the notice by
187certified mail to all persons who received a notice of surplus
188funds and to any other person who has requested notice of the
189hearing on surplus funds. The clerk shall be entitled to an
190additional service charge of $5 per notice of hearing, which may
191be drawn from the surplus funds.
192     (7)  At the hearing, any person other than the owner of
193record has the burden of proving that he or she is entitled to
194some or all of the surplus funds. The court shall consider the
195factors in s. 45.033 when hearing a claim that a person other
196than the owner of record is entitled to the surplus funds.
197     (8)  The clerk of court may additionally collect a fee of
198$25 from any surplus funds remaining in the court registry
199following a foreclosure sale. The clerk shall use the proceeds
200of such fee solely for purposes of educating the public as to
201the rights of homeowners regarding foreclosure proceedings.
202     Section 3.  Section 45.033, Florida Statutes, is created to
203read:
204     45.033  Sale or assignment of rights to surplus funds in a
205property subject to foreclosure.--
206     (1)  There is created a rebuttable presumption that the
207owner of real property as of the date of the filing of a lis
208pendens is entitled to surplus funds available in a foreclosure
209of that real property.
210     (2)  The presumption may be rebutted only by proving that a
211transfer or assignment of the right to collect the surplus funds
212or any portion or percentage of the surplus funds has been
213executed as required by this section.
214     (3)  For a transfer or assignment to qualify as a transfer
215or assignment entitling the transferee or assignee to the
216surplus funds, or any portion or percentage of the surplus
217funds, the instrument must:
218     (a)  Include a financial disclosure that specifies the
219assessed value of the property, a statement that the assessed
220value may be lower than the actual value of the property, the
221approximate amount of any debt encumbering the property, and the
222approximate amount of any equity in the property.
223     (b)  Include a statement that the owner does not need an
224attorney or other representative to recover surplus funds in a
225foreclosure.
226     (c)  Specify all forms of consideration paid for the rights
227to the property or the assignment of the rights to any surplus
228funds.
229     (4)  A transfer or assignment that does not qualify under
230subsection (3) may nevertheless qualify if the court finds that
231the instrument was procured in good faith and with no intent to
232defraud the transferee or assignee.
233     (5)  A party who has executed a transfer or assignment that
234does not conform to the requirements of this section may
235petition the court presiding over the foreclosure proceeding to
236set aside the nonconforming transfer or assignment. If the
237transfer or assignment is set aside, the owner of record shall
238be entitled to the surplus funds, but the other party, in a
239separate proceeding, may seek rescission of contract and
240appropriate damages in such proceeding. The prevailing party in
241any proceeding under this subsection is entitled to recover all
242fees and costs incurred in connection with such proceeding,
243including a reasonable attorney's fee.
244     (6)  This section does not apply to a deed, mortgage, or
245deed in lieu of foreclosure unless a person other than the owner
246of record is claiming that a deed or mortgage entitles the
247person to surplus funds. Nothing in this section affects the
248title or marketability of the real property that is the subject
249of the deed or other instrument. Nothing in this section affects
250the validity of a lien evidenced by a mortgage.
251     Section 4.  Section 501.2078, Florida Statutes, is created
252to read:
253     501.2078  Violations involving individual homeowners during
254the course of residential foreclosure proceedings; civil
255penalties.--
256     (1)  As used in this section:
257     (a)  "Homeowner" means any individual who is the owner of
258the property subject to a residential foreclosure proceeding.
259     (b)  "Residential foreclosure proceeding" means any action
260in a circuit court of this state in which a party seeks to
261foreclose on a mortgage encumbering the mortgagor's primary
262dwelling.
263     (2)  Any person, other than a financial institution as
264defined in s. 655.005, who willfully uses, or has willfully
265used, a method, act, or practice in violation of this part,
266which method, act, or practice victimizes or attempts to
267victimize homeowners during the course of a residential
268foreclosure proceeding, and in committing such violation knew or
269should have known that such conduct was unfair or deceptive, is
270liable for a civil penalty of not more than $15,000 for each
271such violation.
272     (3)  Any order of restitution or reimbursement based on a
273violation of this part committed against a homeowner in a
274residential foreclosure proceeding has priority over the
275imposition of any civil penalty for such violation pursuant to
276this section.
277     (4)  Civil penalties collected pursuant to this section
278shall be deposited into the Legal Affairs Revolving Trust Fund
279of the Department of Legal Affairs and allocated solely to the
280Department of Legal Affairs for the purpose of preparing and
281distributing consumer education materials, programs, and
282seminars to benefit homeowners in residential foreclosure
283proceedings or to further enforcement efforts.
284     (5)  This section does not apply to the act of encumbering
285the dwelling subject to a residential foreclosure proceeding
286with a substitute or additional lien.
287     Section 5.  Section 702.035, Florida Statutes, is amended
288to read:
289     702.035  Legal notice concerning foreclosure
290proceedings.--Whenever a legal advertisement, publication, or
291notice relating to a foreclosure proceeding is required to be
292placed in a newspaper, it is the responsibility of the
293petitioner or petitioner's attorney to place such advertisement,
294publication, or notice. The advertisement, publication, or
295notice shall be placed directly by the attorney for the
296petitioner, by the petitioner if acting pro se, or by the clerk
297of the court. Only the actual costs charged by the newspaper for
298the advertisement, publication, or notice may be charged as
299costs in the action.
300     Section 6.  This act shall take effect July 1, 2006.


CODING: Words stricken are deletions; words underlined are additions.