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On July 29, 2020, the Florida Governor issued an Executive Order extending the foreclosure moratorium until Sept. 1, 2020, but also made some significant carve-outs which will allow for foreclosure files to be initiated and progress through the system. The moratorium now only prohibits the “final action” in a mortgage foreclosure actions, and only applies to single-family mortgages where non-payment is due to the COVID pandemic. It is Padgett Law Group’s reading of the amended moratorium that it would not apply to loans where the default occurred prior to the issuance of the state of emergency in Florida. Additionally, we expect different counties/judges to interpret “final action” to be either sale, certificate of title, or eviction. In summary, absent an investor restriction, a mortgage foreclosure may be initiated and moved all the way to “final action” under the amended moratorium, and in some circumstances through the sale and eviction stage. Click the image below to access our comprehensive COVID-9 response blog for additional moratorium updates and information.  The Florida Legislature passed a new law relating to drafting errors in deeds that went into effect on July 1, 2020. Florida Statute Section 689.041 provides a procedure to cure scrivener’s errors in deeds instead of these issues having to be addressed through litigation. The statute allows for specific errors to be resolved by preparing and recording a “curative notice”. The types of issues that can be corrected with the curative notice are specifically outlined in detail in the statute. The issues that can be fixed include errors or omission in the lot or block information of the property, errors or omissions in the unit, building, or phase identifications of a condo unit, and errors or omissions in a directional call or fraction of a section, township or range in the legal description. However, the statute only applies where there is a “single error” in the legal description. It seems the intent was to limit the number of errors that can be corrected using the curative notice, so deeds with multiple errors may not be able to rely on the statute’s remedy. On July 9, 2020, the United States Bankruptcy Court for the Middle District of Florida entered Administrative order FLMB 2020-7 Proscribing Procedures for Chapter 13 Cases Filed on or After August 1, 2020 and Revised Model Chapter 13 Plan, effective August 1, 2020. What has changed? One of the most fundamental changes that will impact creditors is paragraph 10 (ten) titled Reimposition of the Automatic Stay. It reads as follows: “If Debtor files an amended or modified Plan that includes payments to a secured creditor or lessor in the Plan payments, the automatic stay is reimposed as to that secured creditor or lessor automatically upon the filing of the amended or modified Plan unless the secured creditor or lessor has concluded its state law foreclosure or repossession remedies. Debtor must serve the amended or modified Plan upon the affected creditor or lessor.” Florida Enacts Uniform Commercial Real Estate Receivership Act Effective as of July 1, 20207/10/2020
On July 1, 2020, Uniform Commercial Real Estate Receivership Act (UCRERA) became effective under Chapter 714 of the Florida Statutes. The UCRERA codifies existing Florida common law regarding commercial foreclosures as a remedy to stakeholders and provides much needed uniformity. This is huge for Commercial Foreclosures in Florida, specifically, Fla. Stat. 714. 06, cited below. Prior to the enactment of this statute, there was not a statute that addressed the process for commercial real estate disputes. Of interest, is the fact that the statute states that the Court may condition the appointment of a receiver without prior notice of a hearing, on the giving of security by the person seeking the appointment for the payment of damages, reasonable attorney fees, and costs incurred. Padgett Law Group was successful in winning an appeal in the 4th DCA on a Broward County case, reversing the trial court’s dismissal of the bank’s foreclosure of a 2006 mortgage based on homeowner’s argument that when the bank filed foreclosure in March of 2015, there was an LP in place filed by the HOA in February of 2015 on the HOA’s foreclosure of its lien, and therefore the court in the case lacked subject matter jurisdiction. Steven Hurley appeared for Ditech, and in ruling for the bank, the court concluded:
“We conclude the trial court erred when it found the court lacked subject matter jurisdiction over the Foreclosure Action. The lower court’s ruling was based upon a misinterpretation of section 48.23(1)(d), Florida Statutes. Section 48.23(1)(d), Florida Statutes, only acts to preclude enforcement of liens unrecorded at the time a lis pendens is recorded. It is undisputed that the Bank recorded its interest in the subject property years prior to the Association’s lis pendens filing/lien foreclosure action. The Bank was free to separately file the Foreclosure Action. The trial court did not lack subject matter jurisdiction.” On Friday, July 14, 2017, the 1st DCA in Forero v. Green Tree Servicing, LLC, Case No. 1D16-2151 (1st DCA July 14, 2017) affirmed that the continuing nature of the default serves to make each foreclosure its own, distinct action, even though the initial date of default was the same as in prior foreclosure actions. Borrower’s appeal raised two main issues: 1) the foreclosure was barred as res judicata under the two dismissal rule (a 2nd voluntary dismissal of a case operates as an adjudication on the merits); and 2) the statute of limitations had expired due to the December 1, 2008 default date. This was the third foreclosure filed with the same 2008 default date and both of the prior foreclosures were voluntarily dismissed. In reaching its decision, the Court ruled, “…the foreclosure action was not rendered res judicata by the two previously dismissed foreclosure suits on the same note, and …the statute of limitations in section 95.11(2)(c), Florida Statutes, did not bar the action due to the inclusion within the allegations of at least some defaulted installment payments within five years of the date the complaint was filed.”
The Court followed the recent rulings in the Desylvester and Bollettieri cases from the 2nd DCA and Supreme Court cases Singleton and Bartram which address the “installment nature” of mortgages and joined the 2nd , 4th and 5th DCAs in confirming that allegations in the complaint of the continuing state of default satisfies the statute of limitations. The Padgett Law Group, through attorney Michael Ruff, represented the servicer in this case, which is a monumental victory that positively impacts Florida law on statute of limitations for lenders and servicers. Click the "read more" link below for the full decision. |
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