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