There is a rule of Civil Procedure that exists which bars successive lawsuits after 2 tries, often referred to as the “two dismissal rule” under Rule 1.420. The 1st DCA recently held that this rule does not apply to foreclosures. Based upon the reasoning in Bartram that each monthly payment not made was its own default which warranted a new foreclosure action, the Court held that Rule 1.420 did not bar a third foreclosure action. Forero v. Green Tree Servicing, LLC, No. 1D16-2151 (Fla. 1st DCA July 14, 2017)
In regards to the statute of limitations, the 4th DCA joined the 2nd DCA in finding that continuous defaults occurred each month that payment was not made under the Bartram line of reasoning, and that the complaint may allege the same default date (or one beyond 5 years old) as long as there is also alleged a continuous state of default for each payment since. Kebreau v. Bayview Loan Servicing, LLC et al., No. 4D16-2010 (Fla. 4th DCA July 12, 2017)
Some new revisions to the Florida condo laws, contained in Chapter 718 of the Florida Statutes, have become effective as of July 1, 2017. A few of the notable changes are:
- 718.111(12)(c)(1) – A unit renter has a right to inspect and copy the association’s bylaws and rules.
- 718.111(12)(c)(3)(g)(1) – by July 1, 2018, an association with 150 or more units (which does not manage timeshare units) must post digital copies of the required documents on its website.
- 718.116(8) – The association must issue an estoppel certificate within 10 business days of receipt of a written or electronic request for said certificate.
- 718.116(8)(a) – Any condominium estoppel certificate must contain specific assessment information, such as the regular periodic assessment and frequency; an itemized list of all assessments, special assessments and other moneys scheduled to become due; if there is a capital contribution fee, resale fee or other fee due and what the amount is; if there is a right of first refusal provided to the association or the members; and contact information for all insurance maintained by the association, among other things.
- 718.116(8)(b) – The estoppel certificate (sent via hand delivery or electronically) has a 30-day effective period (35-days if sent by regular mail).
- 718.116(8)(d) – If a requested estoppel certificate is not delivered within 10 business days, a fee may not be charged for the preparation and delivery of that estoppel letter.
- 718.116(8)(f) – The association may charge a reasonable fee for preparation and delivery of an estoppel certificate that may not exceed $250.00; if the certificate is requested on an expedited basis and delivered within 3 business days after the request, however, the association may charge an additional $150.00; an additional fee of up to $150.00 may also be charged for an estoppel certificate on a unit if a delinquent amount is owed.
The 3rd DCA recently held, along with the 4th in De Sousa v. JP Morgan Chase, N.A., 170 So. 3d 928 (Fla. 4th DCA 2015), that when a purchaser of a property via deed or foreclosure sale takes title after the senior/first mortgage records its lis pendens the purchaser has no standing to contest the foreclosure case.
The court reasoned that the lis pendens the bank files with it’s foreclosure complaint is “to notify third parties of pending litigation and protect its proponents from intervening liens that could impair or extinguish claimed property rights.” As such, the purchaser via deed from the owner, or association/junior mortgage foreclosure sale, takes title with notice of the pending bank foreclosure lawsuit. Thus, the purchaser’s remedy is the right of redemption, or to pay the foreclosing bank what is owed, but not to intervene in the foreclosure case as a party and defend.
This should be a lesson to all investors to do your homework and obtain a title search and hire real estate counsel before buying property at HOA/condo auction, or taking a deed to property from an owner. Once the damage is done, as shown above, the court system is not going to help remedy the investor’s lack of due diligence.
Full opinion here.
The 5th DCA recently ruled that the trial court erred in distributing surplus to a 3rd party purchaser. FL Statute 45.033, states that surplus foreclosure proceeds are generally disbursed to owner of record (except in certain limited circumstances). Surplus proceeds are that which a bidder bids over the final judgment amount owed to the bank; those excess funds are called surplus funds of the auction. They typically go to the owner of record on the date that the lis pendens was filed/recorded; after any junior liens (2nd mortgage, association assessments due, etc) are paid off, if any exist.
There has been an increase in illegal claims by 3rd party bidders themselves to foreclosure surplus when they are not entitled to such. They are essentially getting a refund of their money for making a poor business decision. The 5th DCA here put a stop to this practice holding that it is contrary to Florida law.
The 5th DCA recently issued Klebanoff v. Bank of N.Y. Mellon, and the 2nd DCA Huntington National Bank v. Watters, which clarify the pleadings requirements for lenders filing subsequent foreclosure actions.
Previously, the Court ruled in Hicks v. Wells Fargo Bank, N.A., 178 So. 3d 957 (Fla. 5th DCA 2015) that the bank could not foreclose as it alleged a default date more than 5 years before the new complaint was filed, and thus under Bartram, could not prevail. But the 5th DCA said not so fast. The Court stated that Hicks can only be looked at upon its very specific set of facts, as after all, and appeal can only review the law based upon the facts at the trial court level; and sometimes this leads to broad generalizations that do not apply to other sets of facts. Here, the bank has specifically stipulated to proceed to trial only upon the initial default date (that was more than 5 years prior to the re-filing of the case). Based on that fact alone, the bank could not prevail as the default date alleged was beyond the statute of limtations.
The Court clarified in Klebanoffi and Watters finding that as long as the bank alleged the prier default date AND that every mortgage payment from that default date onward was due, then the bank had met the statute of limitations. This is because under Bartram, each missed monthly payment is a new default the bank can allege and use as a basis for foreclosure.
So as long as the bank alleged the old default and all subsequent payments were due, a continuous default including defaults withing the statute of limitations period, the bank satisfies its requirement that there is still a present default within the statute of limitations. And the bank must prove this continuous default at trial or summary judgment to prevail.
These cases will surely make it easier for banks to foreclose upon old cases and defaults as all it must allege now is the old default date and all subsequent payments have not been made; a continuous state of default; as typically borrowers have not made payments or cured the default. This should put some clarity into the pleadings requirements the bank must follow when alleging old default dated in a new foreclosure action.