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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to legal instruments; amending s. 2
117.201, F.S.; defining the term "witness"; amending 3
s. 697.07, F.S.; defining the terms "mortgagee" and 4
"mortgagor"; requiring that a lien created by an 5
assignment of rents be perfected against a mortgagor 6
in addition to third parties under certain conditions; 7
making technical changes; revising the types of 8
expenses that may be paid by collected rents under 9
certain circumstances; providing applicability; 10
amending s. 702.036, F.S.; defining the term 11
"property"; expanding the scope of a final judgment of 12
foreclosure to include other liens; requiring the 13
award of attorney fees in certain circumstances; 14
amending s. 702.10, F.S.; conforming provisions to 15
changes made by the act; defining the term 16
"mortgagor"; providing for retroactive applicability; 17
providing an effective date. 18
19
Be It Enacted by the Legislature of the State of Florida: 20
21
Section 1. Subsectio n (16) is added to section 117.201, 22
Florida Statutes, to read: 23
117.201 Definitions. —As used in this part, the term: 24
(16) "Witness," when used as a noun, means an individual 25
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whose electronic signature is affixed to an electronic record to 26
attest or subscribe to a principal's signature on such record. 27
Section 2. Subsections (1) through (8) of section 697.07, 28
Florida Statutes, are renumbered as subsections (2) through (9), 29
respectively, present subsections (2), (3), and (4) are amended, 30
and a new subsection (1) and subsection (10) are added to that 31
section, to read: 32
697.07 Assignment of rents. — 33
(1) For purposes of this section, the term: 34
(a) "Mortgagee" means a person entitled to enforce an 35
obligation secured by a mortgage. 36
(b) "Mortgagor" means a person who grants a mortgage or a 37
successor in ownership of the real property described in the 38
mortgage. 39
(3)(2) If such an assignment is made, the mortgagee shall 40
hold a lien on the rents, and the lien created by the assignment 41
shall be perfected and effective against the mortgagor and third 42
parties upon recordation of the mortgage or separate instrument 43
in the public records of the county in which the real property 44
is located, according to law. 45
(4)(3) Unless otherwise agreed to in writing by the 46
mortgagee and mortgagor, the lien created by the assignment of 47
rents is shall be enforceable upon the mortgagor's default and 48
written demand for the rents made by the mortgagee to the 49
mortgagor, whereupon the mortgagor shall turn over all rents in 50
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the possession or control of the mortgagor at the time of the 51
written demand or collected thereafter (the "collected rents") 52
to the mortgagee less payment of any expenses authorized by the 53
mortgagee in writing. 54
(5)(4) Upon application by the mortgagee or mortgagor, in 55
a foreclosure action, and notwithstanding any asserted defenses 56
or counterclaims of the mortgagor, a court of competent 57
jurisdiction, pending final adjudication of any action, may 58
require the mortgagor to deposit the collected rents into the 59
registry of the court, or in such other depository as the court 60
may designate. However, the court may authorize the use of the 61
collected rents, before deposit into the registry of the court 62
or other depository, to: 63
(a) Pay the reasonable expenses solely to protect , 64
preserve, and operate the real property, including, without 65
limitation, real estate taxes , and insurance, and assessments 66
that become due after the entry of the court's order to a 67
homeowners' association or an association, as those terms are 68
defined in s. 720.301, or a corporation regulated under chapter 69
718 or chapter 719; 70
(b) Escrow sums required by the mortgagee or separate 71
assignment of rents instrument; and 72
(c) Make payments to the mortgagee. 73
74
The court shall require the mortgagor to account to the court 75
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and the mortgagee for the receipt and use of the collected rents 76
and may also impose other conditions on the mortgagor's use of 77
the collected rents. 78
(10) This section does not apply to a corpo ration that is 79
a homeowners' association or an association, as those terms are 80
defined in s. 720.301, or a corporation regulated under chapter 81
718 or chapter 719, that: 82
(a) Acquires title to a parcel or unit through the 83
foreclosure of its claim of lien, or a deed in lieu of 84
foreclosure, provided that title remains vested in the 85
association or corporation and any rents collected are applied 86
to assessments that are then due; or 87
(b) Collects rents from tenants in a parcel or unit 88
pursuant to s. 718.116(11) , s. 719.108(10), or s. 720.3085(8). 89
Section 3. Subsections (1), (2), and (3) of section 90
702.036, Florida Statutes, are renumbered as subsections (2), 91
(3), and (4), respectively, paragraph (a) of present subsection 92
(1) and present subsection (2) are am ended, and a new subsection 93
(1) and subsection (5) are added to that section, to read: 94
702.036 Finality of mortgage foreclosure judgment. — 95
(1) As used in this section, the term "property" means 96
real property. 97
(2)(a)(1)(a) In any action or proceeding in which a party 98
seeks to set aside, invalidate, or challenge the validity of a 99
final judgment of foreclosure of a mortgage or other lien, or to 100
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establish or reestablish a lien or encumbrance on the property 101
in abrogation of the final judgment of foreclosu re of a mortgage 102
or other lien, the court shall treat such request solely as a 103
claim for monetary damages and may not grant relief that 104
adversely affects the quality or character of the title to the 105
property, if: 106
1. The party seeking relief from the fina l judgment of 107
foreclosure of the mortgage or lien was properly served in the 108
foreclosure lawsuit as provided in chapter 48 or chapter 49. 109
2. The final judgment of foreclosure of the mortgage or 110
lien was entered as to the property. 111
3. All applicable app eals periods have run as to the final 112
judgment of foreclosure of the mortgage or lien with no appeals 113
having been taken or any appeals having been finally resolved. 114
4. The property has been acquired for value, by a person 115
not affiliated with the foreclos ing mortgageholder, the 116
foreclosing lienholder, lender or the foreclosed owner, at a 117
time in which no lis pendens regarding the suit to set aside, 118
invalidate, or challenge the foreclosure appears in the official 119
records of the county where the property was located. 120
(3)(2) For purposes of this section, the following, 121
without limitation, shall be considered persons affiliated with 122
the foreclosing mortgageholder or foreclosing lienholder lender: 123
(a) The foreclosing mortgageholder, the foreclosing 124
lienholder, lender or any loan servicer for the mortgage or lien 125
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loan being foreclosed; 126
(b) Any past or present owner or holder of the mortgage or 127
lien loan being foreclosed; 128
(c) Any maintenance company, holding company, foreclosure 129
services company, or law firm under contract to any entity 130
listed in paragraph (a), paragraph (b), or this paragraph, with 131
regard to the mortgage or lien loan being foreclosed; or 132
(d) Any parent entity, subsidiary, or other person who 133
directly, or indirectly through one or more intermediaries, 134
controls or is controlled by, or is under common control with, 135
any entity listed in paragraph (a), paragraph (b), or paragraph 136
(c). 137
(5) If a party seeks r elief from a final judgment 138
foreclosing a mortgage or lien, or files a separate action 139
attacking such a final judgment, and the party claims that it 140
holds or held a lien superior in right, priority, or dignity to 141
the mortgage or lien foreclosed in the judg ment, the court must 142
award reasonable attorney fees to the party prevailing on the 143
claim. This subsection applies whether the litigation seeking 144
relief from the final judgment occurs in the case in which the 145
judgment was entered or in any separate case or proceeding. 146
Section 4. Subsection (2) of section 702.10, Florida 147
Statutes, is amended to read: 148
702.10 Order to show cause; entry of final judgment of 149
foreclosure; payment during foreclosure. — 150
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(2) Except as provided in paragraph (i), in any action f or 151
foreclosure, other than owner-occupied residential real estate, 152
in addition to any other relief that the court may award, the 153
plaintiff may request that the court enter an order directing 154
the mortgagor defendant to show cause why an order to make 155
payments during the pendency of the foreclosure proceedings or 156
an order to vacate the premises should not be entered. 157
(a) The order shall: 158
1. Set the date and time for hearing on the order to show 159
cause. However, the date for the hearing may not be set soone r 160
than 20 days after the service of the order. If service is 161
obtained by publication, the date for the hearing may not be set 162
sooner than 30 days after the first publication. 163
2. Direct the time within which service of the order to 164
show cause and the comp laint shall be made upon each defendant. 165
3. State that a defendant has the right to file affidavits 166
or other papers at the time of the hearing and may appear 167
personally or by way of an attorney at the hearing. 168
4. State that, if a defendant fails to app ear at the 169
hearing to show cause and fails to file defenses by a motion or 170
by a verified or sworn answer, the defendant is deemed to have 171
waived the right to a hearing and in such case the court may 172
enter an order to make payment or vacate the premises. 173
5. Require the movant to serve a copy of the order to show 174
cause on the defendant in the following manner: 175
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a. If a defendant has been served with the complaint and 176
original process, service of the order may be made in the manner 177
provided in the Florida Rules of Civil Procedure. 178
b. If a defendant has not been served with the complaint 179
and original process, the order to show cause, together with the 180
summons and a copy of the complaint, shall be served on the 181
defendant in the same manner as provided by la w for original 182
process. 183
(b) The right of a defendant to be heard at the hearing to 184
show cause is waived if the defendant, after being served as 185
provided by law with an order to show cause, engages in conduct 186
that clearly shows that the defendant has reli nquished the right 187
to be heard on that order. A defendant's failure to file 188
defenses by a motion or by a sworn or verified answer or to 189
appear at the hearing duly scheduled on the order to show cause 190
presumptively constitutes conduct that clearly shows tha t the 191
defendant has relinquished the right to be heard. 192
(c) If the court finds that a defendant has waived the 193
right to be heard as provided in paragraph (b), the court may 194
promptly enter an order requiring payment in the amount provided 195
in paragraph (f) or an order to vacate. 196
(d) If the court finds that the mortgagor has not waived 197
the right to be heard on the order to show cause, the court 198
shall, at the hearing on the order to show cause, consider the 199
affidavits and other showings made by the parties appearing and 200
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make a determination of the probable validity of the underlying 201
claim alleged against the mortgagor and the mortgagor's 202
defenses. If the court determines that the plaintiff is likely 203
to prevail in the foreclosure action, the court shall enter an 204
order requiring the mortgagor to make the payment described in 205
paragraph (e) to the plaintiff and provide for a remedy as 206
described in paragraph (f). However, the order shall be stayed 207
pending final adjudication of the claims of the parties if the 208
mortgagor files with the court a written undertaking executed by 209
a surety approved by the court in an amount equal to the unpaid 210
balance of the lien being foreclosed, including all principal, 211
interest, unpaid taxes, and insurance premiums paid by the 212
plaintiff. 213
(e) If the court enters an order requiring the mortgagor 214
to make payments to the plaintiff, payments shall be payable at 215
such intervals and in such amounts provided for in the mortgage 216
instrument before acceleration or maturity. The obligation to 217
make payments pursuant to any order entered under this 218
subsection shall commence from the date of the motion filed 219
under this section. The order shall be served upon the mortgagor 220
no later than 20 days before the date specified for the first 221
payment. The order may permit, but may not require, the 222
plaintiff to take all appropriate steps to secure the premises 223
during the pendency of the foreclosure action. 224
(f) If the court enters an order requiring payments, the 225
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order shall also provide that the plaintiff is ent itled to 226
possession of the premises upon the failure of the mortgagor to 227
make the payment required in the order unless at the hearing on 228
the order to show cause the court finds good cause to order some 229
other method of enforcement of its order. 230
(g) All amounts paid pursuant to this section shall be 231
credited against the mortgage obligation in accordance with the 232
terms of the loan documents; however, payments made under this 233
section do not constitute a cure of any default or a waiver or 234
any other defense to the mortgage foreclosure action. 235
(h) Upon the filing of an affidavit with the clerk that 236
the premises have not been vacated pursuant to the court order, 237
the clerk shall issue to the sheriff a writ for possession which 238
shall be governed by s. 83.62. 239
(i) This subsection does not apply to foreclosure of an 240
owner-occupied residence. For purposes of this paragraph, there 241
is a rebuttable presumption that a residential property for 242
which a homestead exemption for taxation was granted according 243
to the certified rolls of the latest assessment by the county 244
property appraiser, before the filing of the foreclosure action, 245
is an owner-occupied residential property. 246
(j) For purposes of this subsection, the term "mortgagor" 247
means a person who grants a mortgage or a successor in ownership 248
of the real property described in the mortgage. The term does 249
not include a homeowners' association or an association, as 250
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those terms are defined in s. 720.301, or a corporation 251
regulated under chapter 718 or chapter 719, that: 252
1. Acquires title to a parcel or unit through the 253
foreclosure of its claim of lien, or a deed in lieu of 254
foreclosure, provided that title remains vested in the 255
association or corporation and any rents collected are applied 256
to assessments that are then due; or 257
2. Collects rents from the tenants in the parcel or unit 258
pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8). 259
Section 5. The amendment to s. 117.201, Florida Statutes, 260
in this act is intended to clarify existing law and applies 261
retroactively to January 1, 2020. 262
Section 6. This act shall take effect July 1, 2023. 263