March 31, 2013 Florida Property Tax Payment Deadline: Do You, as Creditor, Need To Pay?

March 4, 2013

In Florida, tax certificates sold by the tax collector for delinquent ad valorem taxes for 2010 are eligible for tax deed applications on April 1, 2013. Thus, a creditor who has a mortgage lien on real property in Florida should confirm that 2010 property taxes are paid on or before March 31, 2013, or risk a transfer of the real property at a tax deed sale to the successful bidder, free and clear of the creditor's mortgage lien on the subject real property.

If 2010 property taxes have not been paid, to protect its security interest, a creditor with a mortgage lien on real property in Florida should consider payment of the amount required to redeem the 2010 property tax certificates on or before March 31, 2013. If the redemption amount is not paid by that date, a tax certificate holder is permitted to submit an application for a tax deed. After a tax certificate holder files an application for a tax deed, the redemption amount will include not only the amounts for 2010 ad valorem taxes but will also include the amounts for all other delinquent ad valorem taxes and additional interest, fees, and costs as permitted by Florida Statutes. If the redemption amount is not paid prior to the tax deed sale, the real property will be transferred to the successful bidder at the tax deed sale, free and clear of the creditor's mortgage lien on the real property.

A general timeline for sale of tax certificates and issuance of tax deeds is summarized in the chart below.

In considering whether a mortgagee should make an advance for payment of 2011 and 2012 ad valorem taxes, which are delinquent but not yet eligible for applications for tax deeds, a mortgagee should consider the following factors:  

  • If the loan is in default and the mortgagee has initiated foreclosure, a mortgagee may consider delaying an advance for payment of 2011 and 2012 ad valorem taxes until after the mortgagee obtains title to the property because, among other reasons, the borrower and owner of the property may retain the property as a result of a settlement agreement or a third party bidder may be the successful bidder at the foreclosure sale; or  
  • If the mortgagee is a second mortgage holder and there is a first mortgage, the second mortgage holder may not want to make advances for a substantial tax payment if there is a chance that the first mortgagee may pay the property taxes or wipe out the second mortgage through foreclosure. 

The timing for advances for ad valorem taxes will depend on the circumstances of each loan and will include additional business factors such as whether there is a substantial discount to pay delinquent ad valorem taxes now rather than deferring payment, or the likelihood of being able to recover such advances through settlement or a foreclosure sale.

If you have any questions, please contact any of the featured authors or any other member of the Distressed Real Estate Solutions and Property Taxes groups.

PDF FileTax Timeline 2013