After a judicial foreclosure sale concludes and a certificate of title is issued, the purchaser named in the certificate may find the newly acquired residential property either occupied by a tenant in possession or filled with personal belongings. Sections 83.561, , “Termination of rental agreement upon foreclosure” and 83.62, Florida Statutes, “Restoration of possession to landlord” address these issues.
Section 83.561 addresses the situation in which a tenant is occupying residential property subsequent to foreclosure sale and the clerks issuance of a certificate of title. A purchaser takes title to the residential property subject to the rights a tenant has under section 83.561. Section 83.561 provides a tenant, who is a party to the foreclosure action, with thirty days to remain in possession of the property following the date of delivery of a written thirty-day notice of termination of lease. A form of such notice is included in the statute and the notice must be substantially similar to the form of the notice in the statute. Delivery requirements of the notice are similar to a typical termination of a rental agreement, either by mailing via regular, certified U.S. Mail, hand delivery of a true copy or, if the tenant is absent from the property, by leaving a copy at the residence. A tenant does not receive the benefit of the statute if: 1) the tenant is the mortgagor in the subject foreclosure, or the child, spouse, or parent of the mortgagor; 2) the tenant’s rental agreement is not the result of an arm’s length transaction; 3) the rental agreement allows the tenant to pay rent that is substantially less than the fair market rent for the premises with an exclusion for rent that is reduced or subsidized due to a federal, state or local subsidy.
After providing appropriate notice, if the tenant does not vacate the property at the end of the thirty-day period, the purchaser may apply to the court for a writ of possession which is controlled by section 83.62. At the time the Sheriff executes the writ of possession, or at any time thereafter, the landlord or the landlord’s agent may remove any personal property found on the premises to or near the property line. The statute provides that neither the sheriff nor the landlord or the landlord’s agent shall be liable to the tenant or any other party for the loss, destruction, or damage to the property after it has been removed. The same exculpatory provisions apply to the purchaser as the new owner of the property.
When utilizing the procedures under these sections, a purchaser and even third-parties such as condominium or homeowner associations, including their managers and agents, should be mindful of the potential for liability to the owner of the personal property. Although not addressing the merits of the owner’s claim, the Third District Court of Appeal recently issued an opinion reversing the dismissal of a claim against an Association as to an allegation of conversion of personal property after a judicial foreclosure. See Ice v. The Cosmopolitan Residences on South Beach, 42 Fla. L. Weekly D2604 (Fla. Dec. 13, 2017). In Ice, after execution of a writ of possession, the former owner alleges that the property manager expressly instructed the sheriff to place all of the owner’s property in a designated area for safe keeping, and afterwards the manager denied the owner access to remove the property unless the owner gave the manager a sofa and other items. Id. Although these facts, if true, provide an extreme example of hazards that can occur after a foreclosure sale, the purchaser must remain mindful of sections 83.561 and 83.62 and needs to strictly comply with these sections when confronted with a situation involving tenants or personal property after a foreclosure sale.