Florida is a judicial foreclosure state, which means your lender must go through the court system to foreclose on your commercial property. This process starts when the lender files a lawsuit against you. The court will then review the case to determine whether to allow the foreclosure to proceed. This judicial oversight offers you a chance to present your case and any defenses you might have.
Are you behind on commercial mortgage payments? Do you know or suspect that your commercial lender is thinking about foreclosing on your property? Contact Loan Lawyers immediately. We can review your case, walk you through the Florida foreclosure process and explain your options in a free consultation.
Judicial Foreclosure Process in Florida
The process for judicial foreclosures typically begins with the “preforeclosure” stage once a borrower falls behind on their payments for commercial real estate. At this stage, the servicer must inform the borrower about possible ways to avoid foreclosure. This includes sending a breach letter as a formal preforeclosure notice. The loan servicer might also impose new fees, such as late charges and inspection fees.
Commercial lenders and commercial borrowers have several options to consider before moving toward litigation. For example, the lender might demand that the borrower catch up on their payments and only file a foreclosure lawsuit if the borrower fails to do so. Alternatively, the parties could negotiate an agreement that doesn’t require court approval, such as a loan modification. These agreements are particularly useful as they can resolve delinquencies without a lengthy court process. However, if the lender deems these options unsuitable or too risky, they might opt for a judicial foreclosure to recoup their losses.
To initiate a judicial foreclosure, the lender must first issue a notice of default to the borrower or guarantor per the terms of the original loan documents. If the property generates income, the lender might demand the proceeds from any rent payments after notifying tenants. The legal proceedings for commercial foreclosures are similar to those for residential foreclosures, in which the lender must file a complaint, and the borrower has a set period (typically 20 days) to respond.
If the judge hearing your case determines that your defense is without merit, it can issue a summary judgment against you on the borrower’s motion to initiate foreclosure proceedings. Otherwise, your case will proceed to trial, during which the judge will hear arguments before rendering a decision.
Receivers in Commercial Foreclosures
Florida courts often appoint receivers to manage commercial properties during foreclosure. A receiver is an independent party who oversees the property to ensure it maintains its value and generates income, if applicable. A lender might request a receiver if they believe the borrower will not adequately protect or manage the property. Once appointed, the receiver handles all aspects of property management, from collecting rents to maintaining the premises. This protects the property’s value and reassures the lender that the asset will remain viable throughout the foreclosure process.
If the court appoints a receiver in your commercial foreclosure case, you will lose the authority to manage your property and collect rent. This could affect your cash flow and ability to make decisions about the property. Therefore, seek legal counsel immediately if foreclosure seems imminent. By taking early action, you might be able to negotiate alternatives with your lender to prevent the need for a receiver and allow you to retain control over your property.
Contact Our Florida Commercial Foreclosure Lawyers for a Free Consultation
If you’re facing commercial foreclosure in Florida, don’t wait to get help. Contact Loan Lawyers today for a free consultation about what to do about foreclosed commercial property. Our team of experienced commercial foreclosure attorneys can advise you on your rights while protecting your property and your future.
