Did You Get a Letter Saying You Owe 30%? Florida’s 12% Fee Cap Explained
A letter arrives claiming you have surplus funds from a foreclosure sale. The company offers to recover your money for a 30% fee. Before you sign anything, Florida law has something important to say about surplus funds recovery fees in Florida.
Many former homeowners receive these letters. The funds often sit unclaimed with the court clerk for a long time after the property loss. The amounts often reach thousands of dollars, making a 30% cut feel like a second financial loss. Florida Statute 45.033 exists specifically to protect people in this situation.
Key Takeaways for Surplus Funds Recovery Fees in Florida
- Florida Statute 45.033 caps compensation at 12% for any assignee, meaning a person or company that takes a written assignment of your right to the funds.
- Companies that demand 30% or more in exchange for taking an assignment of your rights may be violating Florida law.
- Signing an assignment agreement before understanding your rights may result in paying thousands more than necessary.
What Foreclosure Surplus Funds Are and Why Companies Contact You
When a foreclosure sale brings in more money than the outstanding mortgage balance, the excess belongs to the former homeowner. This leftover amount sits with the court clerk until someone claims it.
How Surplus Funds End Up in Court Accounts
A property sells at auction for more than what the homeowner owed. The lender takes what it is owed, and remaining funds go to the clerk of court. The clerk holds these funds until the rightful owner files a claim.
Some former homeowners never learn about their surplus funds. Others move and miss court notices. This creates an opportunity for recovery companies to step in.
Why Recovery Companies Find You First
These companies search public foreclosure records for unclaimed surplus funds. They cross-reference property records with current addresses, then send letters offering to recover “your” money for a percentage.
The letters may arrive with urgent language and official-looking formatting. Some people mistake them for government notices. In reality, these are marketing materials from private companies.
Why 30% Fee Demands Raise Serious Concerns
A 30% fee on a $20,000 surplus means losing $6,000 to the recovery company. On larger amounts, the difference becomes even more significant.
The Math Behind Excessive Surplus Funds Recovery Fees
Consider how fee percentages affect real surplus amounts:
- A $15,000 surplus at 30% costs $4,500; at 12%, it costs $1,800.
- A $30,000 surplus at 30% costs $9,000; at 12%, it costs $3,600.
- A $50,000 surplus at 30% costs $15,000; at 12%, it costs $6,000.
These differences represent thousands of dollars that may rightfully belong to you.
How Companies Try to Justify Higher Fees
Some recovery companies use creative language to get around the statutory cap. They may call their charges “consulting fees” or “administrative costs” instead of recovery fees. Assignment companies will charge their attorney’s fees in addition to the 12%.
Others claim their services fall outside the statute because they provide “investigation” rather than recovery. Relabeling a fee does not automatically exempt it from the law.
Florida Statute 45.033 and the 12% Fee Cap Explained
Florida Statute 45.033 directly addresses surplus funds recovery fees in Florida with clear limits on what assignees may charge.
What the Statute Actually Says
The law caps compensation at 12% of the recovered surplus for any assignee, meaning someone or a company that takes a written assignment of the owner’s right to the funds. This cap does not apply to attorneys who represent the former owner without taking assignment rights.
The statute also requires specific disclosures in any assignment agreement. Contracts that fail to meet these requirements may be unenforceable.
Who the 12% Cap Applies To
The fee cap applies specifically to assignees who obtain claim rights through written assignment from the property owner:
- Asset recovery companies that have you sign over your claim rights
- Surplus fund locators who work through assignment agreements
- Any individual or entity that takes assignment of your claim
The cap exists because lawmakers recognized that former homeowners in financial distress need protection from excessive fees.
Common Tactics That Surplus Recovery Companies Use
Recovery companies have developed various approaches to contact potential clients and secure signed agreements quickly.
Pressure and Urgency in Marketing Materials
Many letters suggest that funds may be forfeited if they are not claimed immediately. While Florida does have processes that may eventually affect your claim rights, the urgency may be exaggerated.
Some companies follow up with phone calls that emphasize limited time windows. This pressure may lead people to sign agreements without fully reviewing the terms.
Vague Contract Language That Obscures True Costs
Contracts from recovery companies sometimes bury fee information in dense paragraphs. Others use multiple fee categories that add up to more than 12% total.
Terms like “success bonus” or “document preparation fee” may appear separately from the stated recovery percentage. Combined, these charges may exceed what Florida law allows for assignees.
Hiring a Surplus Recovery Agent vs. Working With an Attorney
Former homeowners have options when recovering surplus funds. The choice between a recovery company and an attorney involves several considerations.
What Recovery Companies Offer
Recovery companies handle the paperwork and court filings to claim surplus funds. They work on contingency, collecting their fee only if recovery is successful.
However, their fees may push against or exceed statutory limits for assignees. Their contracts may contain terms that favor the company over the client.
What an Attorney May Provide
An attorney may review contracts, identify problematic terms, and help clients understand their rights under the statute.
Because attorneys represent the former owner rather than taking an assignment, their fees are not limited by the 12% cap under § 45.033. Instead, attorney fees are governed by client agreements and professional conduct rules. Attorneys also owe fiduciary duties, meaning they must act in your best interest.
What to Review Before Signing Any Agreement
Anyone who receives a surplus recovery offer needs to examine documents carefully before committing.
Key Contract Terms That Deserve Attention
Review these elements in any recovery agreement:
- The total percentage or dollar amount the company will take
- Whether additional fees appear under different labels
- The disclosure language required by Florida Statute 45.033
- Cancellation rights and time frames
Missing or vague answers to these questions may signal problems with the agreement.
Steps for People Who Already Signed
If you already signed an assignment agreement, the situation is not necessarily hopeless. The agreement’s validity depends on whether it complies with Florida law.
Attorney Carlos M. Amor offers free consultations to review existing contracts. A conversation may reveal whether the agreement contains enforceable terms or potential violations.
FAQ for Florida Surplus Funds Recovery Fees
To claim your funds, you need to file a motion or claim with the Clerk of Court in the county where the foreclosure occurred.
The required documents typically include:
- A copy of the final judgment of foreclosure.
- Proof that you were the owner of the property at the time of the sale, such as the deed.
- A sworn statement or affidavit attesting to your right to the funds.
- Personal identification.
Skilled attorneys help clients prepare and file the correct documents to simplify the process.
The law sets a specific order of priority for claims to surplus funds.
After the former property owner’s primary claim, other parties, such as secondary mortgage holders, judgment creditors, or homeowners’ associations, may claim the remaining amount to satisfy outstanding debts. The court determines who receives the funds and in what order based on Florida law and the date and type of lien.
A knowledgeable attorney evaluates these competing claims to fight for the maximum amount of money for you.
Your Surplus Funds, Your Decision
A letter demanding 30% of your surplus funds does not mean you must accept those terms. Florida law provides protections that many former homeowners never learn about until they speak with someone who understands the statute.
Attorney Carlos M. Amor offers free consultations by phone, video meeting, or in person. A conversation may help clarify whether a fee demand complies with Florida Statute 45.033 and what options exist for your situation.
Contact The Law Office of Carlos M. Amor, P.A. to discuss your surplus funds matter with someone who may help you keep more of what belongs to you.
