city foreclosing on code violation liens

[Jpony]

The city of Fort Pierce, Fl, recently started foreclosing on code violation liens.

I would like to know, once the property has been sold at the public auction, does that extinguish all the liens against the property held by the city or just the ones listed in the foreclosure? I don't know why they wouldn't include all the liens but small town bs is sometimes hard to figure out. And I assume that however much they get at the auction, it will satisfy the liens and whereas they might have the option to go after the original owner to collect any deficit, they can not go after the new owner or attach to the property?

 

[STEPHAN]

The unpaid liens stay with the property. They can not go after the owner personally.

 

[Jpony]

The unpaid liens stay with the property. They can not go after the owner personally.

Are they considered 'unpaid' if the city foreclosed on those liens and the property was sold to a third party at the auction but the auction didn't bring enough to cover the total liens?

I know with a bank foreclosures, the bank puts in their bid, if no one out bids them, they get the property back. But if someone outbids the bank, the high bidder gets the property and that mortgage is released regardless of the final judgement amount vs auction results. However, depending on the actual foreclosure suit, the bank could go back on the original borrower for the deficiency but the bank loses the house as collateral. I'm pretty sure it's the same with a city lien foreclosure. Just wondering if anyone knows what the law is.

The other part of the question, put a little differently, if a property has multiple liens does the city have to foreclose on all the liens at the same time or can they file a foreclosure for one, the property goes to auction, that lien has to be extinguished because it was foreclosed on but if there are other liens from the city that were not included in that particular suit, can the city come back and file another foreclose on the new owner for the other liens? Or do they have to file all the liens they hold on a property at the same time?

 

[quincy]

The city of Fort Pierce, Fl, recently started foreclosing on code violation liens.

I would like to know, once the property has been sold at the public auction, does that extinguish all the liens against the property held by the city or just the ones listed in the foreclosure? I don't know why they wouldn't include all the liens but small town bs is sometimes hard to figure out. And I assume that however much they get at the auction, it will satisfy the liens and whereas they might have the option to go after the original owner to collect any deficit, they can not go after the new owner or attach to the property?

The liens are not necessarily “extinguished” when a property is foreclosed and sold at auction.

Code violation liens, however, will not take priority over original mortgage liens or tax liens. Tax and mortgage liens (generally) will be paid first from the proceeds of the property sale. After mortgage or tax liens, liens on the property (generally) will be paid from the sale proceeds in order of the date of recordation of the lien.

A lien not paid from the proceeds will either become the responsibility of the purchaser (depending on the type of lien), or a lien holder would need to sue the original property owner to collect on the still-outstanding debt.

Any excess funds from a foreclosure sale will go to the original property owner.

Because there are several exceptions, general rules do not always apply. You will want the specific liens on the property personally reviewed by an attorney in your area of Florida.

 

[zddoodah]

I would like to know, once the property has been sold at the public auction, does that extinguish all the liens against the property held by the city or just the ones listed in the foreclosure?

Generally speaking, a foreclosure sale extinguishes all junior liens but not senior liens.

I assume that however much they get at the auction, it will satisfy the liens and whereas they might have the option to go after the original owner to collect any deficit, they can not go after the new owner or attach to the property?

Despite your use of a question mark, this sentence isn't a question. If your intent was to ask whether your assumption is correct, I don't see any point in addressing this sort of issue without any relevant facts whatsoever.

Let's start with these questions: Is your home being foreclosed? If not, what leads you to inquire about this? If so, what are the nature and amount of all of the liens?

 

[quincy]

Jpony, another question: Are you planning to bid on a foreclosed house at an auction? If so, you should know that there are risks in doing so. You might be buying a house with hidden defects and liens attached.

Here is some reading material for you:

From the Florida Bar Journal: https://www.floridabar.org/the-florida-bar-journal/code-liens-are-not-superpriority-liens-is-it-the-end-of-the-debate/

County or Municipal Code Enforcement: https://www.flsenate.gov/Laws/Statutes/2023/162.09

Full Chapter of above:
https://www.flsenate.gov/Laws/Statutes/2023/Chapter162/All