Who Gets the Tax Surplus After a Tax Deed Sale? Association vs. Property Owner

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By Dane E. Leitner

There has been a lot of talk recently about the Tax Reform Act that was passed by the Federal government and primarily deals with income tax.  However, there has also been recent activity with a different type of taxes, real property taxes.  In December of 2017 the Fourth District Court of Appeal in Florida issued an opinion in the case of Jenifer E. Calendar v. Stonebridge Gardens Section III Condominium Association that dealt with the distribution of surplus funds from a tax sale of an owner’s condominium unit.

Owners of real property have an obligation to pay their property taxes each year.  If they do not, the Tax Collector holds an auction for a tax certificate sale to pay off the delinquent taxes.  The successful bidder at the auction is issued a tax lien certificate.  This entitles the holder of the certificate a lien on the property and interest on the lien.  If the tax lien certificate and accrued interest is not paid off within two years, the holder of the certificate may force a public auction of the property.  This is called a tax deed sale.  At the tax deed sale, the winning bidder purchases the property.  The tax lien certificate holder is paid, and any remaining lienholders and the prior property owner may apply for any excess funds. Continue reading