August 8th, 2013
THE IMPACT OF THE 2013 FLORIDA SESSION LAW
(CHAPTER 2013-137) C.S.C.S.H.B. NO. 87
By Michael W. Leonard, Esquire
Boyle & Leonard P.A.
On June 7, 2013, Florida’s Governor, Rick Scott, signed the Committee Substitute for House Bill No. 87 (the “Act”). Foreclosure—Actions and Proceedings—Complaint, 2013 Fla. Sess. Law Serv. Ch. 2013-137 (C.S.C.S.H.B. 87). The impact of this House Bill is significant for actions involving foreclosure of Florida real estate, and alters, some would say significantly, Florida’s foreclosure landscape. The purpose of this article is not to discuss all of the statutory changes, but to highlight some of the changes which this author finds substantial.
Of first importance is the issue of whether these statutory modifications have retroactive impact, and therefore affect pending foreclosure actions or only actions which are filed after the respective statutes’ effective dates. The first sentence of Section 8 of the Act states that, “[T]he Legislature finds that this act is remedial in nature and applies to all mortgages encumbering real property and all promissory notes secured by a mortgage, whether executed before, on or after the effective date of this act.” The Act clearly states that it is remedial, and remedial statutes, as a general rule, have retroactive application. The enacting Legislation, however, provides exceptions to this general statement, which exceptions will be discussed below.
Section 95.11, Florida Statutes, relating to Florida’s statute of limitations, now clarifies that as to actions filed after July 1, 2013, a lender which has or is foreclosing on a one to four family dwelling unit must enforce its claim for a deficiency within one year from the date that a certificate of title is issued by the clerk or the day after the lender accepts a deed in lieu of foreclosure.
Additionally, the Governor and the Legislature created Section 702.015, Florida Statutes, which supplements the requirements of lenders relating to claims relating to lost or destroyed instruments. The creation of this Statute now requires that if the action relates to residential property, the Complaint must affirmatively allege: (a) that at the time of the commencement of the action, the Plaintiff holds the note; (b) the specific factual basis by which the Plaintiff is the entity entitled to enforce the note; (c) if the Plaintiff was delegated authority to file the foreclosure action on behalf of another entity that is the actual owner of the note, the authority of the Plaintiff and the document which grants the Plaintiff such authority, and; (d) if the Plaintiff is in possession of the note, a statement, under penalty of perjury, that the Plaintiff holds the subject note. Alternatively, if the Plaintiff does not possess the original note, it must provide an affidavit which details the clear chain of custody of the note, the facts showing that the Plaintiff is entitled to enforce the note, together with exhibits of such copies of the note and allonge, or other documents showing receipt of the original note.
Section 702.036, Florida Statutes, was also created which provides that if a party attempts to challenge a foreclosure judgment or the foreclosure sale resulting therefrom, that party’s relief is limited to one of a claim for monetary damages, which relief will not affect the quality or character of the title to the foreclosure property. This is a significant change for those successful third party bidders acquiring title at foreclosure sale and having to spend substantial resources in proving the validity of their title.
Substantial revisions were likewise made to Section 702.10, Florida Statutes. Now, a lien holder, which includes not only the Plaintiff lender but also any defendant who holds a valid lien encumbering the subject property, has the right to demand an expedited foreclosure process through an “order to show cause”. The enactment of this statute applies even to causes of action pending with courts on the effective date. This legislative enactment is particularly important to both condominium and homeowner’s associations who are often pushing for lenders to timely complete their foreclosure action.
Finally, Section 702.11, Florida Statutes, was also created as part of the Act, which specifies what is deemed adequate protection for a borrower when the Plaintiff lender is not in possession of the original note. Adequate protection now includes a written indemnification agreement, a surety bond, a letter of credit, a deposit of cash collateral, or such other security as the court deems just and proper. Like Section 702.10, this statute applies to actions currently pending in Florida tribunals.