| 1 | A bill to be entitled |
| 2 | An act relating to judicial and execution sales of |
| 3 | property; creating s. 45.0321, F.S.; requiring that, as a |
| 4 | condition to entry of a final judgment following a |
| 5 | judicial sale, the lienholder serve notice on the property |
| 6 | owner of the possibility of relief through the filing of a |
| 7 | bankruptcy petition; amending ss. 56.021 and 702.10, F.S., |
| 8 | relating to the required service of notice of potential |
| 9 | relief through bankruptcy; conforming provisions to |
| 10 | changes made by the act; providing an effective date. |
| 11 |
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| 12 | Be It Enacted by the Legislature of the State of Florida: |
| 13 |
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| 14 | Section 1. Section 45.0321, Florida Statutes, is created |
| 15 | to read: |
| 16 | 45.0321 Notice of bankruptcy alternatives to judicial |
| 17 | sales.--As a condition to the entry of a final judgment under s. |
| 18 | 45.031, a lienholder shall serve, together with the original |
| 19 | process, a notice to the property owner containing the following |
| 20 | statement in conspicuous type: |
| 21 |
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| 22 | A judicial or sheriff's sale of your property that is subject to |
| 23 | the lien of the plaintiff in this case may occur shortly. Under |
| 24 | certain circumstances, the United States Bankruptcy Code may |
| 25 | provide a property owner the ability to retain the liened |
| 26 | property and reorganize the claimed indebtedness if a bankruptcy |
| 27 | petition is filed BEFORE the judicial or sheriff's sale occurs. |
| 28 | In most cases, an individual will be required to complete a |
| 29 | credit counseling briefing before being eligible to file a |
| 30 | bankruptcy case. |
| 31 | Section 2. Section 56.021, Florida Statutes, is amended to |
| 32 | read: |
| 33 | 56.021 Executions; issuance and return, alias, etc.--When |
| 34 | issued, an execution is valid and effective during the life of |
| 35 | the judgment or decree on which it is issued. When fully paid, |
| 36 | the officer executing it shall make his or her return and file |
| 37 | it in the court which issued the execution. If the execution is |
| 38 | lost or destroyed, the party entitled thereto may have an alias, |
| 39 | pluries or other copies on making proof of such loss or |
| 40 | destruction by affidavit and filing it in the court issuing the |
| 41 | execution. However, the execution may not be issued before the |
| 42 | judgment creditor has filed and served a notice upon the |
| 43 | judgment debtor in the same form as required by s. 45.0321. |
| 44 | Section 3. Paragraph (a) of subsection (1) of section |
| 45 | 702.10, Florida Statutes, is amended to read: |
| 46 | 702.10 Order to show cause; entry of final judgment of |
| 47 | foreclosure; payment during foreclosure.-- |
| 48 | (1) After a complaint in a foreclosure proceeding has been |
| 49 | filed, the mortgagee may request an order to show cause for the |
| 50 | entry of final judgment and the court shall immediately review |
| 51 | the complaint. If, upon examination of the complaint, the court |
| 52 | finds that the complaint is verified and alleges a cause of |
| 53 | action to foreclose on real property, the court shall promptly |
| 54 | issue an order directed to the defendant to show cause why a |
| 55 | final judgment of foreclosure should not be entered. |
| 56 | (a) The order shall: |
| 57 | 1. Set the date and time for hearing on the order to show |
| 58 | cause. However, the date for the hearing may not be set sooner |
| 59 | than 20 days after the service of the order. When service is |
| 60 | obtained by publication, the date for the hearing may not be set |
| 61 | sooner than 30 days after the first publication. The hearing |
| 62 | must be held within 60 days after the date of service. Failure |
| 63 | to hold the hearing within such time does not affect the |
| 64 | validity of the order to show cause or the jurisdiction of the |
| 65 | court to issue subsequent orders. |
| 66 | 2. Direct the time within which service of the order to |
| 67 | show cause and the complaint must be made upon the defendant. |
| 68 | 3. State that the filing of defenses by a motion or by a |
| 69 | verified or sworn answer at or before the hearing to show cause |
| 70 | constitutes cause for the court not to enter the attached final |
| 71 | judgment. |
| 72 | 4. State that the defendant has the right to file |
| 73 | affidavits or other papers at the time of the hearing and may |
| 74 | appear personally or by way of an attorney at the hearing. |
| 75 | 5. State that, if the defendant files defenses by a |
| 76 | motion, the hearing time may be used to hear the defendant's |
| 77 | motion. |
| 78 | 6. State that, if the defendant fails to appear at the |
| 79 | hearing to show cause or fails to file defenses by a motion or |
| 80 | by a verified or sworn answer or files an answer not contesting |
| 81 | the foreclosure, the defendant may be considered to have waived |
| 82 | the right to a hearing and in such case the court may enter a |
| 83 | final judgment of foreclosure ordering the clerk of the court to |
| 84 | conduct a foreclosure sale. |
| 85 | 7. State that, if the mortgage provides for reasonable |
| 86 | attorney's fees and the requested attorney's fees do not exceed |
| 87 | 3 percent of the principal amount owed at the time of filing the |
| 88 | complaint, it is unnecessary for the court to hold a hearing or |
| 89 | adjudge the requested attorney's fees to be reasonable. |
| 90 | 8. Attach the final judgment of foreclosure the court will |
| 91 | enter, if the defendant waives the right to be heard at the |
| 92 | hearing on the order to show cause. |
| 93 | 9. Require the mortgagee to serve a copy of the order to |
| 94 | show cause on the mortgagor in the following manner: |
| 95 | a. If the mortgagor has been served with the complaint and |
| 96 | original process, service of the order may be made in the manner |
| 97 | provided in the Florida Rules of Civil Procedure. |
| 98 | b. If the mortgagor has not been served with the complaint |
| 99 | and original process, the order to show cause, together with the |
| 100 | summons and a copy of the complaint, shall be served on the |
| 101 | mortgagor in the same manner as provided by law for original |
| 102 | process. |
| 103 | 10. Require the mortgagee to file and serve with the order |
| 104 | to show cause a notice in the same form as required by s. |
| 105 | 45.0321. |
| 106 |
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| 107 | Any final judgment of foreclosure entered under this subsection |
| 108 | is for in rem relief only. Nothing in this subsection shall |
| 109 | preclude the entry of a deficiency judgment where otherwise |
| 110 | allowed by law. |
| 111 | Section 4. This act shall take effect July 1, 2007. |