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Florida Appellate Court Ruling Now Means Retroactive Tax Liens Prioritized

  • Florida Appellate Court Ruling Now Means Retroactive Tax Liens Prioritized

    Florida Appellate Court Ruling Now Means Retroactive Tax Liens Prioritized

    A recent ruling from the Third District Court of Appeals in Florida could have large impacts on real estate lenders. The decision now places years-old tax liens at the forefront of priority.
    The state of Florida has largely used a “first in time, first in right” policy regarding the payment of liens following court decisions. That is, the liens are prioritized based on filing date, and any debts that are recorded earlier are designated superior to those that come later, according to the courts. A rare exception deals with tax liens, which are always considered superior under Florida law. For years, lenders within Florida have known that tax liens are considered first and have been able to plan around any known debts.
    However, the new ruling from the Third Court allows tax liens to retroactively be considered from up to 10 years in the past. This can blindside potential lenders, as previously unseen liens may now take top priority, adding financial stress.
    The ruling stemmed from a case between a lender named Lansdowne Mortgage LLC and Miami-Dade County. The county had issued a tax lien on a property that they alleged had improperly received homestead tax exemptions. Miami-Dade imposed the lien in 2014, almost seven years after Landsowne had issued the mortgage for the property. Landsowne responded with a foreclosure suit against the county and others, saying that its own mortgage took priority over the imposed tax lien, due to its earlier filing date. Records showed that both parties in the suit believed that the law was on each of their sides concerning the issue of priority. At the trial, a Circuit Court judge sided with Landsowne, and Miami-Dade appealed the decision. On appeal, the panel sided with the county, concluding that proper government tax liens, even those issued after lender mortgages, must be the priority when dealing with issues regarding liens.