I was asked what the story was on statues of limitations (in Florida) for enforcement of deficiency judgments.
The Florida Statute of Limitations (time to enforce) the Promissory Note is 5 years from the time it went into default. What defines when that default is can have more than one meaning.
If your property has been foreclosed, the time starts with the date of the foreclosure sale. If your property has been sold at short sale, the time is the date of the closing (although it could be a few days later whent he lender gets its money from the sale). If it is a deed in lieu of foreclosure and there remains an unsatisfied deficiency, it is the date of the recording of the deed. If the lender takes no action at all, such as a 2nd mortgage lender that does not defend its worthless mortgage, it can be the date of the foreclosure of the first mortgage OR the date of notice of the default in the 2nd mortgage promissory note.
There is also a rule on how long a plaintiff can keep open a foreclosure lawsuit that has no activity. That rule says after 1 year of inactivity, the lawsuit can be dismissed by the court. The rule is referred to the "Failure to Prosecute Within One Year" rule. IF the court dismisses the lawsuit after one year and before the bank asks for a deficiency judgment, the lender can still file a new lawsuit and sue just on the promissory note unpaid balance. Some people think that once the one year has past, they are free of the deficiency after a foreclosure. This in incorrect.
Florida courts have noted that a claim for deficiency in a foreclosure action does not accrue until the foreclosure sale has occurred. Thus the five year period starts at the time of the foreclosure sale (not the time of the default).
With the above being said, please understand that this response is a general comment about the law and is not expressing a legal opinion about the very general fact pattern raised herein. As such, this brief response may not be relied upon for any purpose. Please consider obtaining formal legal advice if you have a specific fact pattern with respect to which you need an answer.
Copyright 2010 Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com
See our easy to understand articles at:
TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES