Florida Tax Deed Sale - who gets the surplus - HOA or mortgage

[mytownparty]

We have a first mortgage on a South Florida condo, that will go thru the Tax Deed Sale later this month, $3,000 of taxes are unpaid. I expect the sale to bring around $30,000 and after deducting $3,000 for taxes, leave $27,000 surplus overbid.

Who would have priority to that money in FL - $35,000 mortgage or the condo association with past dues of $12,000?

 

[FlyingRon]

In Florida it depends on when the mortgage was taken out and when the association declaration was filed. In many cases of more recent construction, the HOA gets priorty.

 

[LdiJ]

In Florida it depends on when the mortgage was taken out and when the association declaration was filed. In many cases of more recent construction, the HOA gets priorty.

How would anyone ever be able to get a mortgage loan if the mortgage was not superior? I cannot imagine many mortgage companies being willing to do business in FL under those conditions.

 

[FlyingRon]

How would anyone ever be able to get a mortgage loan if the mortgage was not superior? I cannot imagine many mortgage companies being willing to do business in FL under those conditions.

The same way they deal with tax issues being priority. Often they're paid via escrow impound just like taxes and insurance. Or the lender has the right to pay them and tack them on to the debt just like forced insurance.

You can be incredulous but the law in Florida is that if the property had its declarations filed after the law was changed (which varies depending on whether we are talking about houses or condos), then the priorty date is the date the declaration was filed. There are some exeptions but in most situations, it is the case.