Judgment Liens on Real Property: Recent Decision Causes Uncertainty for Title Companies, Bankers, and Lawyers

The Florida Legislature prescribed a 10-year period for judgment liens on real property, with an option to renew for another 10 years. A recent court decision has caused confusion and could affect lenders, title companies, and homeowners. It means old judgment liens that were previously ignored may now cause problems for homeowners trying to refinance or sell their homes. In Franklin Financial v. White, the court decided that a judgment lien can be created by recording a certified copy of a judgment at any time within 20 years after the judgment is issued. This means that a judgment lien can be created or renewed even after the initial 10-year period has expired. This decision has created problems for title companies, banks, and real estate owners because expired judgment liens are now given new life. The legislature originally enacted seven-year and later 10-year renewal periods to shorten the 20-year statute of limitations for expired liens. This was done to bring Florida in line with other states, reduce costs, reduce record-keeping requirements, and protect debtors from less than diligent creditors. However, the court’s decision is incongruous with the original legislative intent. The new law says that if you have a court judgment against someone and you want it to be a lien on their property, you have to record it within 10 years of getting the judgment, and then re-record it before it expires. Before, you had to re-record it every 7 years, but now it’s every 10 years. And if you do that, the judgment can still be a lien on the person’s property. The court said that the law about re-recording real estate transactions is not clear, but they didn’t look at the history of the law to figure it out. Another case said that they should interpret the law so that all parts make sense together. It’s not clear how many transactions will be affected in the future, but it will definitely change the way title companies and banks do business. Benjamin Hillard from the DaFonte & Hillard Law Group and Hillard Law Firm, P.A., in St. Petersburg has experience in investment banking and real estate. This column is from the Real Property, Probate and Trust Law Section, which aims to teach its members about duty, service to the public, and improving the legal system. The column is written by Melissa Murphy, the chair of the section, and edited by William P. Sklar and Richard R. Gans.

Source: https://www.floridabar.org/the-florida-bar-journal/judgment-liens-on-real-property-recent-decision-causes-uncertainty-for-title-companies-bankers-and-lawyers/