Florida Senate - 2023                              CS for SB 286
       
       
        
       By the Committee on Banking and Insurance; and Senator Powell
       
       
       
       
       
       597-02029-23                                           2023286c1
    1                        A bill to be entitled                      
    2         An act relating to legal instruments; amending s.
    3         117.201, F.S.; defining the term “witness”; amending
    4         s. 697.07, F.S.; defining the terms “mortgagee” and
    5         “mortgagor”; requiring that a lien created by an
    6         assignment of rents be perfected against a mortgagor
    7         in addition to third parties under certain conditions;
    8         making technical changes; revising the types of
    9         expenses that may be paid by collected rents in
   10         foreclosure actions under certain circumstances;
   11         providing applicability; amending s. 702.036, F.S.;
   12         defining the term “property”; expanding the scope of a
   13         final judgment of foreclosure to include other liens;
   14         requiring the award of attorney fees in certain
   15         circumstances; providing applicability; amending s.
   16         702.10, F.S.; defining the term “mortgagor”; providing
   17         for retroactive applicability of a specified
   18         provision; providing an effective date.
   19          
   20  Be It Enacted by the Legislature of the State of Florida:
   21  
   22         Section 1. Subsection (16) is added to section 117.201,
   23  Florida Statutes, to read:
   24         117.201 Definitions.—As used in this part, the term:
   25         (16)“Witness,” when used as a noun, means an individual
   26  whose electronic signature is affixed to an electronic record to
   27  attest or subscribe to a principal’s signature on such record.
   28         Section 2. Present subsections (1) through (8) of section
   29  697.07, Florida Statutes, are redesignated as subsections (2)
   30  through (9), respectively, present subsections (2), (3), and (4)
   31  of that section are amended, and a new subsection (1) and
   32  subsection (10) are added to that section, to read:
   33         697.07 Assignment of rents.—
   34         (1)For purposes of this section, the term:
   35         (a)“Mortgagee” means a person entitled to enforce an
   36  obligation secured by a mortgage.
   37         (b)“Mortgagor” means a person who grants a mortgage or a
   38  successor in ownership of the real property described in the
   39  mortgage.
   40         (3)(2) If such an assignment is made, the mortgagee shall
   41  hold a lien on the rents, and the lien created by the assignment
   42  shall be perfected and effective against the mortgagor and third
   43  parties upon recordation of the mortgage or separate instrument
   44  in the public records of the county in which the real property
   45  is located, according to law.
   46         (4)(3) Unless otherwise agreed to in writing by the
   47  mortgagee and mortgagor, the lien created by the assignment of
   48  rents is shall be enforceable upon the mortgagor’s default and
   49  written demand for the rents made by the mortgagee to the
   50  mortgagor, whereupon the mortgagor shall turn over all rents in
   51  the possession or control of the mortgagor at the time of the
   52  written demand or collected thereafter (the “collected rents”)
   53  to the mortgagee less payment of any expenses authorized by the
   54  mortgagee in writing.
   55         (5)(4) Upon application by the mortgagee or mortgagor, in a
   56  foreclosure action, and notwithstanding any asserted defenses or
   57  counterclaims of the mortgagor, a court of competent
   58  jurisdiction, pending final adjudication of any action, may
   59  require the mortgagor to deposit the collected rents into the
   60  registry of the court, or in such other depository as the court
   61  may designate. However, the court may authorize the use of the
   62  collected rents, before deposit into the registry of the court
   63  or other depository, to:
   64         (a) Pay the reasonable expenses solely to protect,
   65  preserve, and operate the real property, including, without
   66  limitation, real estate taxes, and insurance, and assessments
   67  that become due after the entry of the court’s order to a
   68  homeowners’ association or an association, as those terms are
   69  defined in s. 720.301, or a corporation regulated under chapter
   70  718 or chapter 719;
   71         (b) Escrow sums required by the mortgagee or separate
   72  assignment of rents instrument; and
   73         (c) Make payments to the mortgagee.
   74  
   75  The court shall require the mortgagor to account to the court
   76  and the mortgagee for the receipt and use of the collected rents
   77  and may also impose other conditions on the mortgagor’s use of
   78  the collected rents.
   79         (10)This section does not apply to a corporation that is a
   80  homeowners’ association or an association, as those terms are
   81  defined in s. 720.301, or a corporation regulated under chapter
   82  718 or chapter 719, that:
   83         (a)Acquires title to a parcel or unit through the
   84  foreclosure of its claim of lien, or a deed in lieu of
   85  foreclosure, provided that title remains vested in the
   86  association or corporation and any rents collected are applied
   87  to assessments that are then due; or
   88         (b)Collects rents from tenants in a parcel or unit
   89  pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8).
   90         Section 3. Present subsections (1), (2), and (3) of section
   91  702.036, Florida Statutes, are redesignated as subsections (2),
   92  (3), and (4), respectively, a new subsection (1) and subsection
   93  (5) are added to that section, and paragraph (a) of present
   94  subsection (1) and present subsection (2) of that section are
   95  amended, to read:
   96         702.036 Finality of mortgage foreclosure judgment.—
   97         (1)As used in this section, the term “property” means real
   98  property.
   99         (2)(a)(1)(a) In any action or proceeding in which a party
  100  seeks to set aside, invalidate, or challenge the validity of a
  101  final judgment of foreclosure of a mortgage or other lien, or to
  102  establish or reestablish a lien or encumbrance on the property
  103  in abrogation of the final judgment of foreclosure of a mortgage
  104  or other lien, the court shall treat such request solely as a
  105  claim for monetary damages and may not grant relief that
  106  adversely affects the quality or character of the title to the
  107  property, if:
  108         1. The party seeking relief from the final judgment of
  109  foreclosure of the mortgage or lien was properly served in the
  110  foreclosure lawsuit as provided in chapter 48 or chapter 49.
  111         2. The final judgment of foreclosure of the mortgage or
  112  lien was entered as to the property.
  113         3. All applicable appeals periods have run as to the final
  114  judgment of foreclosure of the mortgage or lien with no appeals
  115  having been taken or any appeals having been finally resolved.
  116         4. The property has been acquired for value, by a person
  117  not affiliated with the foreclosing mortgageholder, the
  118  foreclosing lienholder, lender or the foreclosed owner, at a
  119  time in which no lis pendens regarding the suit to set aside,
  120  invalidate, or challenge the foreclosure appears in the official
  121  records of the county where the property was located.
  122         (3)(2) For purposes of this section, the following, without
  123  limitation, shall be considered persons affiliated with the
  124  foreclosing mortgageholder or foreclosing lienholder lender:
  125         (a) The foreclosing mortgageholder, the foreclosing
  126  lienholder, lender or any loan servicer for the mortgage or lien
  127  loan being foreclosed;
  128         (b) Any past or present owner or holder of the mortgage or
  129  lien loan being foreclosed;
  130         (c) Any maintenance company, holding company, foreclosure
  131  services company, or law firm under contract to any entity
  132  listed in paragraph (a), paragraph (b), or this paragraph, with
  133  regard to the mortgage or lien loan being foreclosed; or
  134         (d) Any parent entity, subsidiary, or other person who
  135  directly, or indirectly through one or more intermediaries,
  136  controls or is controlled by, or is under common control with,
  137  any entity listed in paragraph (a), paragraph (b), or paragraph
  138  (c).
  139         (5)If a party seeks relief from a final judgment
  140  foreclosing a mortgage or lien, or files a separate action
  141  attacking such a final judgment, and the party claims that it
  142  holds or held a lien superior in right, priority, or dignity to
  143  the mortgage or lien foreclosed in the judgment, the court must
  144  award reasonable attorney fees to the party prevailing on the
  145  claim. This subsection applies whether the litigation seeking
  146  relief from the final judgment occurs in the case in which the
  147  judgment was entered or in any separate case or proceeding.
  148         Section 4. Subsection (2) of section 702.10, Florida
  149  Statutes, is amended to read:
  150         702.10 Order to show cause; entry of final judgment of
  151  foreclosure; payment during foreclosure.—
  152         (2) Except as provided in paragraph (i), in any action for
  153  foreclosure, other than owner-occupied residential real estate,
  154  in addition to any other relief that the court may award, the
  155  plaintiff may request that the court enter an order directing
  156  the mortgagor defendant to show cause why an order to make
  157  payments during the pendency of the foreclosure proceedings or
  158  an order to vacate the premises should not be entered.
  159         (a) The order shall:
  160         1. Set the date and time for hearing on the order to show
  161  cause. However, the date for the hearing may not be set sooner
  162  than 20 days after the service of the order. If service is
  163  obtained by publication, the date for the hearing may not be set
  164  sooner than 30 days after the first publication.
  165         2. Direct the time within which service of the order to
  166  show cause and the complaint shall be made upon each defendant.
  167         3. State that a defendant has the right to file affidavits
  168  or other papers at the time of the hearing and may appear
  169  personally or by way of an attorney at the hearing.
  170         4. State that, if a defendant fails to appear at the
  171  hearing to show cause and fails to file defenses by a motion or
  172  by a verified or sworn answer, the defendant is deemed to have
  173  waived the right to a hearing and in such case the court may
  174  enter an order to make payment or vacate the premises.
  175         5. Require the movant to serve a copy of the order to show
  176  cause on the defendant in the following manner:
  177         a. If a defendant has been served with the complaint and
  178  original process, service of the order may be made in the manner
  179  provided in the Florida Rules of Civil Procedure.
  180         b. If a defendant has not been served with the complaint
  181  and original process, the order to show cause, together with the
  182  summons and a copy of the complaint, shall be served on the
  183  defendant in the same manner as provided by law for original
  184  process.
  185         (b) The right of a defendant to be heard at the hearing to
  186  show cause is waived if the defendant, after being served as
  187  provided by law with an order to show cause, engages in conduct
  188  that clearly shows that the defendant has relinquished the right
  189  to be heard on that order. A defendant’s failure to file
  190  defenses by a motion or by a sworn or verified answer or to
  191  appear at the hearing duly scheduled on the order to show cause
  192  presumptively constitutes conduct that clearly shows that the
  193  defendant has relinquished the right to be heard.
  194         (c) If the court finds that a defendant has waived the
  195  right to be heard as provided in paragraph (b), the court may
  196  promptly enter an order requiring payment in the amount provided
  197  in paragraph (f) or an order to vacate.
  198         (d) If the court finds that the mortgagor has not waived
  199  the right to be heard on the order to show cause, the court
  200  shall, at the hearing on the order to show cause, consider the
  201  affidavits and other showings made by the parties appearing and
  202  make a determination of the probable validity of the underlying
  203  claim alleged against the mortgagor and the mortgagor’s
  204  defenses. If the court determines that the plaintiff is likely
  205  to prevail in the foreclosure action, the court shall enter an
  206  order requiring the mortgagor to make the payment described in
  207  paragraph (e) to the plaintiff and provide for a remedy as
  208  described in paragraph (f). However, the order shall be stayed
  209  pending final adjudication of the claims of the parties if the
  210  mortgagor files with the court a written undertaking executed by
  211  a surety approved by the court in an amount equal to the unpaid
  212  balance of the lien being foreclosed, including all principal,
  213  interest, unpaid taxes, and insurance premiums paid by the
  214  plaintiff.
  215         (e) If the court enters an order requiring the mortgagor to
  216  make payments to the plaintiff, payments shall be payable at
  217  such intervals and in such amounts provided for in the mortgage
  218  instrument before acceleration or maturity. The obligation to
  219  make payments pursuant to any order entered under this
  220  subsection shall commence from the date of the motion filed
  221  under this section. The order shall be served upon the mortgagor
  222  no later than 20 days before the date specified for the first
  223  payment. The order may permit, but may not require, the
  224  plaintiff to take all appropriate steps to secure the premises
  225  during the pendency of the foreclosure action.
  226         (f) If the court enters an order requiring payments, the
  227  order shall also provide that the plaintiff is entitled to
  228  possession of the premises upon the failure of the mortgagor to
  229  make the payment required in the order unless at the hearing on
  230  the order to show cause the court finds good cause to order some
  231  other method of enforcement of its order.
  232         (g) All amounts paid pursuant to this section shall be
  233  credited against the mortgage obligation in accordance with the
  234  terms of the loan documents; however, payments made under this
  235  section do not constitute a cure of any default or a waiver or
  236  any other defense to the mortgage foreclosure action.
  237         (h) Upon the filing of an affidavit with the clerk that the
  238  premises have not been vacated pursuant to the court order, the
  239  clerk shall issue to the sheriff a writ for possession which
  240  shall be governed by s. 83.62.
  241         (i) This subsection does not apply to foreclosure of an
  242  owner-occupied residence. For purposes of this paragraph, there
  243  is a rebuttable presumption that a residential property for
  244  which a homestead exemption for taxation was granted according
  245  to the certified rolls of the latest assessment by the county
  246  property appraiser, before the filing of the foreclosure action,
  247  is an owner-occupied residential property.
  248         (j)For purposes of this subsection, the term “mortgagor”
  249  means a person who grants a mortgage or a successor in ownership
  250  of the real property described in the mortgage. The term does
  251  not include a homeowners’ association or an association, as
  252  those terms are defined in s. 720.301, or a corporation
  253  regulated under chapter 718 or chapter 719, that:
  254         1.Acquires title to a parcel or unit through the
  255  foreclosure of its claim of lien, or a deed in lieu of
  256  foreclosure, provided that title remains vested in the
  257  association or corporation and any rents collected are applied
  258  to assessments that are then due; or
  259         2.Collects rents from the tenants in the parcel or unit
  260  pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8).
  261         Section 5. The amendment to s. 117.201, Florida Statutes,
  262  made by this act is intended to clarify existing law and applies
  263  retroactively to January 1, 2020.
  264         Section 6. This act shall take effect July 1, 2023.