Chapter 5-8 Reforeclosure

5-8 Reforeclosure

A common-law suit for reforeclosure is a petition in equity seeking the discharge of the rights of inferior lienholders following the expiration of a reasonable period for redemption.⁵⁸ The right of reforeclosure belongs to the purchaser at the foreclosure sale or the mortgagee, and may be employed to remedy any irregularity in the foreclosure proceeding, including the addition of omitted parties.⁵⁹ It may be employed in a suit de novo by the purchaser,⁶⁰ or if the foreclosure judgment has reserved jurisdiction, the purchaser may seek a judgment of reforeclosure as a proceeding supplementary in the foreclosure action.⁶¹

As it concerns the foreclosing plaintiff, the right of reforeclosure is grounded on the equitable principle that seeks to avoid unjustly enriching one party as a result of the innocent error of the other. Likewise, reforeclosure actions, when brought by third-party purchasers, are premised on the equitable principle of subrogation. Upon purchasing the property at a foreclosure sale, the purchaser becomes the virtual assignee to the foreclosing plaintiff, and accordingly inherits its attending rights.⁶²

It is not surprising that the principle of reforeclosure has over a hundred years of application and support from Florida courts. Doubtlessly, it was vital to ensure equity was done at a time where the review of title (no matter how diligent) frequently resulted in the inadvertent omission of parties at foreclosure. These circumstances are largely absent today, where anyone with an internet connection can review all of the public records of any Florida county. For this reason, the burden of diligence is high. The right of reforeclosure, while a helpful safety net for foreclosing plaintiffs and prospective foreclosure sale purchasers, each is nonetheless well advised to perform diligent title examinations prior to undertaking their endeavors.

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Notes:

^[58] Foster v. Foster, 703 So.2d 1107 (Fla. 2d DCA 1997); Nobani v. Barcelona Dev. Corp., 655 So. 2d 250 (Fla. 5 DCA 1995).

^[59] Trueman Fertilizer Co. v. Lester, 155 Fla. 338, 20 So. 2d 349 (1944); Edason v. Central Farmers' Trust Co., 100 Fla. 348, 129 So. 698 (1930).

^[60] Commercial Laundries of W. Florida, Inc. v. Tiffany Square Inv'rs Ltd. P'ship, 605 So. 2d 116 (Fla. 5th DCA 1992).

^[61] Traditionally, reforeclosure actions were a simple matter of filing the...