Florida Appellate Court Reverses Prior Decision and Holds That Liens Placed on Property Between Final Foreclosure Judgment and Sale Are Discharged

A Florida appellate court recently granted a motion for rehearing and reversed its prior decision, now holding that municipal liens placed on a property after a final judgment of foreclosure but before the judicial sale were discharged by the sale.  See Ober v. Town of Lauderdale-by-the-Sea, 2017 WL 361127 (Fla. Dist. Ct. App. Jan. 25, 2017).  In August, the Court addressed a situation in which a local municipality recorded seven liens on a property after the final judgment of foreclosure was entered but before the property was sold at a foreclosure sale.  There, the Court affirmed a lower court’s decision that a lis pendens remained valid until final judgment, but that any liens recorded after final judgment were not discharged and remained on the property after the sale.  See Ober v. Town of Lauderdale-by-the-Sea, 2016 WL 4468134 (Fla. Dist. Ct. App. Aug. 24, 2016).  The appellant, who had purchased the property after the sale and sought to discharge the liens, filed a motion for rehearing, which the Court granted.  The Court then reversed its prior decision, finding that the all post-judgment liens should be discharged because the lis pendens statute “expressly contemplates that its preclusive operation continues through a ‘judicial sale.’”  It further held that this is “consistent with how foreclosure suits operate in the real world.”

The analysis of the prior decision can be found here.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com or Clarissa Gomez at cgomez@riker.com.