Florida Senate - 2023 SB 286 By Senator Powell 24-00376-23 2023286__ 1 A bill to be entitled 2 An act relating to legal instruments; amending s. 3 117.201, F.S.; defining the term witness; amending 4 s. 697.07, F.S.; defining the terms mortgagee and 5 mortgagor; requiring that a lien created by an 6 assignment of rents be perfected against a mortgagor 7 in addition to third parties under certain conditions; 8 making technical changes; revising the types of 9 expenses that may be paid by collected rents in 10 foreclosure actions under certain circumstances; 11 providing applicability; amending s. 702.036, F.S.; 12 defining the term property; expanding the scope of a 13 final judgment of foreclosure to include other liens; 14 requiring the award of attorney fees in certain 15 circumstances; providing applicability; amending s. 16 702.10, F.S.; revising the class of persons authorized 17 to move for expedited foreclosure; making conforming 18 changes; defining the term mortgagor; providing for 19 retroactive applicability of a specified provision; 20 providing an effective date. 21 22 Be It Enacted by the Legislature of the State of Florida: 23 24 Section 1.Subsection (16) is added to section 117.201, 25 Florida Statutes, to read: 26 117.201Definitions.As used in this part, the term: 27 (16)Witness, when used as a noun, means an individual 28 whose electronic signature is affixed to an electronic record as 29 an attesting or subscribing witness. 30 Section 2.Present subsections (1) through (8) of section 31 697.07, Florida Statutes, are redesignated as subsections (2) 32 through (9), respectively, present subsections (2), (3), and (4) 33 of that section are amended, and a new subsection (1) and 34 subsection (10) are added to that section, to read: 35 697.07Assignment of rents. 36 (1)For purposes of this section, the term: 37 (a)Mortgagee means any party entitled to enforce the 38 mortgage or assignment of rents instrument under applicable law. 39 (b)Mortgagor means the original mortgagor and all 40 parties who have subsequently acquired title to the property 41 subject to the assignment. 42 (3)(2)If such an assignment is made, the mortgagee shall 43 hold a lien on the rents, and the lien created by the assignment 44 shall be perfected and effective against the mortgagor and third 45 parties upon recordation of the mortgage or separate instrument 46 in the public records of the county in which the real property 47 is located, according to law. 48 (4)(3)Unless otherwise agreed to in writing by the 49 mortgagee and mortgagor, the lien created by the assignment of 50 rents is shall be enforceable upon the mortgagors default and 51 written demand for the rents made by the mortgagee to the 52 mortgagor, whereupon the mortgagor shall turn over all rents in 53 the possession or control of the mortgagor at the time of the 54 written demand or collected thereafter (the collected rents) 55 to the mortgagee less payment of any expenses authorized by the 56 mortgagee in writing. 57 (5)(4)Upon application by the mortgagee or mortgagor, in a 58 foreclosure action, and notwithstanding any asserted defenses or 59 counterclaims of the mortgagor, a court of competent 60 jurisdiction, pending final adjudication of any action, may 61 require the mortgagor to deposit the collected rents into the 62 registry of the court, or in such other depository as the court 63 may designate. However, the court may authorize the use of the 64 collected rents, before deposit into the registry of the court 65 or other depository, to: 66 (a)Pay the reasonable expenses solely to protect, 67 preserve, and operate the real property, including, without 68 limitation, real estate taxes, and insurance, and assessments 69 that become due after the entry of the courts order to a 70 homeowners association or an association, as those terms are 71 defined in s. 720.301, or a corporation regulated under chapter 72 718 or chapter 719; 73 (b)Escrow sums required by the mortgagee or separate 74 assignment of rents instrument; and 75 (c)Make payments to the mortgagee. 76 77 The court shall require the mortgagor to account to the court 78 and the mortgagee for the receipt and use of the collected rents 79 and may also impose other conditions on the mortgagors use of 80 the collected rents. 81 (10)This section does not apply to a corporation that is a 82 homeowners association or an association, as those terms are 83 defined in s. 720.301, or a corporation regulated under chapter 84 718 or chapter 719, that: 85 (a)Acquires title to a parcel or unit through the 86 foreclosure of its claim of lien, or a deed in lieu of 87 foreclosure, provided that title remains vested in the 88 association or corporation and any rents collected are applied 89 to assessments that are then due; or 90 (b)Collects rents from tenants in a parcel or unit 91 pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8). 92 Section 3.Present subsections (1), (2), and (3) of section 93 702.036, Florida Statutes, are redesignated as subsections (2), 94 (3), and (4), respectively, a new subsection (1) and subsection 95 (5) are added to that section, and paragraph (a) of present 96 subsection (1) and present subsection (2) of that section are 97 amended, to read: 98 702.036Finality of mortgage foreclosure judgment. 99 (1)As used in this section, the term property means real 100 property. 101 (2)(a)(1)(a)In any action or proceeding in which a party 102 seeks to set aside, invalidate, or challenge the validity of a 103 final judgment of foreclosure of a mortgage or other lien, or to 104 establish or reestablish a lien or encumbrance on the property 105 in abrogation of the final judgment of foreclosure of a mortgage 106 or other lien, the court shall treat such request solely as a 107 claim for monetary damages and may not grant relief that 108 adversely affects the quality or character of the title to the 109 property, if: 110 1.The party seeking relief from the final judgment of 111 foreclosure of the mortgage or lien was properly served in the 112 foreclosure lawsuit as provided in chapter 48 or chapter 49. 113 2.The final judgment of foreclosure of the mortgage or 114 lien was entered as to the property. 115 3.All applicable appeals periods have run as to the final 116 judgment of foreclosure of the mortgage or lien with no appeals 117 having been taken or any appeals having been finally resolved. 118 4.The property has been acquired for value, by a person 119 not affiliated with the foreclosing mortgageholder, the 120 foreclosing lienholder, lender or the foreclosed owner, at a 121 time in which no lis pendens regarding the suit to set aside, 122 invalidate, or challenge the foreclosure appears in the official 123 records of the county where the property was located. 124 (3)(2)For purposes of this section, the following, without 125 limitation, shall be considered persons affiliated with the 126 foreclosing lender: 127 (a)The foreclosing mortgageholder, the foreclosing 128 lienholder, lender or any loan servicer for the mortgage or lien 129 loan being foreclosed; 130 (b)Any past or present owner or holder of the mortgage or 131 lien loan being foreclosed; 132 (c)Any maintenance company, holding company, foreclosure 133 services company, or law firm under contract to any entity 134 listed in paragraph (a), paragraph (b), or this paragraph, with 135 regard to the mortgage or lien loan being foreclosed; or 136 (d)Any parent entity, subsidiary, or other person who 137 directly, or indirectly through one or more intermediaries, 138 controls or is controlled by, or is under common control with, 139 any entity listed in paragraph (a), paragraph (b), or paragraph 140 (c). 141 (5)If a party seeks relief from a final judgment 142 foreclosing a mortgage or lien, or files a separate action 143 attacking such a final judgment, and the party claims that it 144 holds or held a lien superior in right, priority, or dignity to 145 the mortgage or lien foreclosed in the judgment, the court must 146 award reasonable attorney fees to the party prevailing on the 147 claim. This subsection applies whether the litigation seeking 148 relief from the final judgment occurs in the case in which the 149 judgment was entered or in any separate case or proceeding. 150 Section 4.Subsection (2) of section 702.10, Florida 151 Statutes, is amended to read: 152 702.10Order to show cause; entry of final judgment of 153 foreclosure; payment during foreclosure. 154 (2)Except as provided in paragraph (i), in any action for 155 foreclosure, other than owner-occupied residential real estate, 156 in addition to any other relief that the court may award, the 157 plaintiff may request that the court enter an order directing 158 the mortgagor defendant to show cause why an order to make 159 payments during the pendency of the foreclosure proceedings or 160 an order to vacate the premises should not be entered. 161 (a)The order shall: 162 1.Set the date and time for hearing on the order to show 163 cause. However, the date for the hearing may not be set sooner 164 than 20 days after the service of the order. If service is 165 obtained by publication, the date for the hearing may not be set 166 sooner than 30 days after the first publication. 167 2.Direct the time within which service of the order to 168 show cause and the complaint shall be made upon the mortgagor 169 each defendant. 170 3.State that the mortgagor a defendant has the right to 171 file affidavits or other papers at the time of the hearing and 172 may appear personally or by way of an attorney at the hearing. 173 4.State that, if the mortgagor a defendant fails to appear 174 at the hearing to show cause and fails to file defenses by a 175 motion or by a verified or sworn answer, the mortgagor defendant 176 is deemed to have waived the right to a hearing and in such case 177 the court may enter an order to make payment or vacate the 178 premises. 179 5.Require the movant to serve a copy of the order to show 180 cause on the mortgagor defendant in the following manner: 181 a.If the mortgagor a defendant has been served with the 182 complaint and original process, service of the order may be made 183 in the manner provided in the Florida Rules of Civil Procedure. 184 b.If the mortgagor a defendant has not been served with 185 the complaint and original process, the order to show cause, 186 together with the summons and a copy of the complaint, shall be 187 served on the mortgagor defendant in the same manner as provided 188 by law for original process. 189 (b)The right of the mortgagor a defendant to be heard at 190 the hearing to show cause is waived if the mortgagor defendant, 191 after being served as provided by law with an order to show 192 cause, engages in conduct that clearly shows that the mortgagor 193 defendant has relinquished the right to be heard on that order. 194 The mortgagors A defendants failure to file defenses by a 195 motion or by a sworn or verified answer or to appear at the 196 hearing duly scheduled on the order to show cause presumptively 197 constitutes conduct that clearly shows that the mortgagor 198 defendant has relinquished the right to be heard. 199 (c)If the court finds that the mortgagor a defendant has 200 waived the right to be heard as provided in paragraph (b), the 201 court may promptly enter an order requiring payment in the 202 amount provided in paragraph (f) or an order to vacate. 203 (d)If the court finds that the mortgagor has not waived 204 the right to be heard on the order to show cause, the court 205 shall, at the hearing on the order to show cause, consider the 206 affidavits and other showings made by the parties appearing and 207 make a determination of the probable validity of the underlying 208 claim alleged against the mortgagor and the mortgagors 209 defenses. If the court determines that the plaintiff is likely 210 to prevail in the foreclosure action, the court shall enter an 211 order requiring the mortgagor to make the payment described in 212 paragraph (e) to the plaintiff and provide for a remedy as 213 described in paragraph (f). However, the order shall be stayed 214 pending final adjudication of the claims of the parties if the 215 mortgagor files with the court a written undertaking executed by 216 a surety approved by the court in an amount equal to the unpaid 217 balance of the lien being foreclosed, including all principal, 218 interest, unpaid taxes, and insurance premiums paid by the 219 plaintiff. 220 (e)If the court enters an order requiring the mortgagor to 221 make payments to the plaintiff, payments shall be payable at 222 such intervals and in such amounts provided for in the mortgage 223 instrument before acceleration or maturity. The obligation to 224 make payments pursuant to any order entered under this 225 subsection shall commence from the date of the motion filed 226 under this section. The order shall be served upon the mortgagor 227 no later than 20 days before the date specified for the first 228 payment. The order may permit, but may not require, the 229 plaintiff to take all appropriate steps to secure the premises 230 during the pendency of the foreclosure action. 231 (f)If the court enters an order requiring payments, the 232 order shall also provide that the plaintiff is entitled to 233 possession of the premises upon the failure of the mortgagor to 234 make the payment required in the order unless at the hearing on 235 the order to show cause the court finds good cause to order some 236 other method of enforcement of its order. 237 (g)All amounts paid pursuant to this section shall be 238 credited against the mortgage obligation in accordance with the 239 terms of the loan documents; however, payments made under this 240 section do not constitute a cure of any default or a waiver or 241 any other defense to the mortgage foreclosure action. 242 (h)Upon the filing of an affidavit with the clerk that the 243 premises have not been vacated pursuant to the court order, the 244 clerk shall issue to the sheriff a writ for possession which 245 shall be governed by s. 83.62. 246 (i)This subsection does not apply to foreclosure of an 247 owner-occupied residence. For purposes of this paragraph, there 248 is a rebuttable presumption that a residential property for 249 which a homestead exemption for taxation was granted according 250 to the certified rolls of the latest assessment by the county 251 property appraiser, before the filing of the foreclosure action, 252 is an owner-occupied residential property. 253 (j)For purposes of this subsection, the term mortgagor 254 means the original mortgagor and any subsequent owner or party 255 in possession of the property. The term does not include a 256 homeowners association or an association, as those terms are 257 defined in s. 720.301, or a corporation regulated under chapter 258 718 or chapter 719, that: 259 1.Acquires title to a parcel or unit through the 260 foreclosure of its claim of lien, or a deed in lieu of 261 foreclosure, provided that title remains vested in the 262 association or corporation and any rents collected are applied 263 to assessments that are then due; or 264 2.Collects rents from the tenants in the parcel or unit 265 pursuant to s. 718.116(11), s. 719.108(10), or s. 720.3085(8). 266 Section 5.The amendment to s. 117.201, Florida Statutes, 267 made by this act is intended to clarify existing law and applies 268 retroactively to January 1, 2020. 269 Section 6.This act shall take effect July 1, 2023.