Section 48.23(1)(d) of the Florida Statutes substantively provides that recording a notice of lis pendens constitutes a bar to the enforcement against the property described in the notice of all interests and liens, including, but not limited to, federal tax liens and levies, unrecorded at the time of recording the notice unless the holder of any such unrecorded interest or lien intervenes in such proceedings within 30 days after the recording of the notice. If the holder of any such unrecorded interest or lien does not intervene in the proceedings and if such proceedings are prosecuted to a judicial sale of the property described in the notice, the property shall be forever discharged from all such unrecorded interests and liens. In the case of Ober v. Town of Lauderdale-By-the-Sea, the question was raised as to when the 30-day statutory period closes for recording liens – 30 days from the final foreclosure judgment or at the foreclosure sale?
On November 26, 2007, Bank of America recorded a lis pendens on property that it would ultimately foreclosure upon. The bank obtained the final foreclosure judgment on September 22, 2008. Between July 13, 2009 through October 27, 2011, the Town of Lauderdale-By-the-Sea recorded seven (7) post-judgment liens against the property relating to various code violations occurring after the entry of the final judgment. On September 27, 2012, the bank purchased the property at a foreclosure sale and thereafter sold it to James Ober. After Ober acquired the property, the city recorded three (3) additional liens. Ober attempted to quite title to the property. In response, Lauderdale-By-the-Sea filed a counterclaim to foreclose on the liens. On August 24, 2016, the trial court ruled in favor of the city finding that the numerous liens placed between a final judgment of foreclosure and the judicial sale were enforceable. Essentially, the court decision meant that foreclosing lenders and buyers could (i) face new liability from creditors who did not take part in the foreclosure process, but rather waited to record post-judgment claims, and (ii) no longer rely that the certificate of title ensured that their ownership of the property was lien free.
The decision was reheard and the Fourth District Court of Appeals completely reversed its original decision. On January 25, 2015, the court ruled that liens placed on a property after a final foreclosure judgment, but before a judicial sale, are discharged by Section 48.23(1)(d) of the Florida Statutes. This decision is consistent with the understanding of counsel for foreclosing banks and buyers of the lis pendens statute and buyers can breathe easy again when they look to purchase distressed properties that have been properly foreclosed upon.