What Is an Assignment of Surplus Funds and When Is It Enforceable?
This article explains what an assignment is, what Florida law allows, how to structure one properly, and when courts are likely to uphold or dismiss it.
What Is an Assignment of Surplus Funds and When Is It Enforceable?
In Florida surplus recovery, the term “assignment of surplus funds” comes up often — especially when former property owners work with recovery professionals or companies. But what exactly is it, and when will the court enforce an assignment versus reject it as predatory or invalid?
This article explains what an assignment is, what Florida law allows, how to structure one properly, and when courts are likely to uphold or dismiss it.
What Is an Assignment of Surplus Funds?
An assignment of surplus funds is a legal document in which a homeowner (or rightful claimant) gives another party the right to claim and collect surplus funds on their behalf. This is often done when the original owner wants help navigating the court system or simply doesn’t want to handle the claim personally.
An assignment:
Transfers the right to receive funds
Must be signed, dated, and often notarized
Is filed with the Clerk or court during the claim process
Assignments are commonly used by:
Surplus recovery firms
Attorneys
Family members helping with probate
Court-appointed representatives
Is This Allowed in Florida?
Yes — but with strict limitations.
Florida law does allow assignments of surplus fund rights, as long as they follow specific rules designed to protect homeowners from abuse.
What Florida Law Says: Fla. Stat. §45.032(3)(c)
This section governs mortgage foreclosure surplus funds. It says:
“A person or entity other than the owner of record claiming entitlement to surplus funds must file a written claim... and must prove entitlement to the funds by assignment or lawful authority.”
BUT — the Florida Supreme Court has also issued Administrative Orders warning against predatory surplus recovery practices, including:
Excessive fees (anything above 12% may be scrutinized or rejected)
Assignments signed under pressure or confusion
Claims filed by unlicensed or unauthorized companies
If a court suspects abuse, it may:
Reject the assignment
Require a hearing
Order funds paid directly to the original owner instead
When Is an Assignment Enforceable in Court?
Courts generally enforce surplus fund assignments if:
✅ The assignment is clear and specific
✅ It was signed knowingly and voluntarily
✅ It includes reasonable compensation (12% or less is considered fair)
✅ The party claiming funds provides a copy of the assignment and other required paperwork
✅ The assignment is not being used to avoid probate or bypass lienholder priority
When Do Courts Reject Assignments?
Florida judges may reject or question an assignment if:
❌ The homeowner was elderly, mentally impaired, or under pressure
❌ The assignment includes excessive fees (e.g., 30%, 40%, etc.)
❌ The person claiming funds has no legal standing (e.g., no POA, no probate authority)
❌ The assignment attempts to bypass legitimate heirs or lienholders
❌ The paperwork is vague, unsigned, or not notarized
Some counties now require court approval for any assignment exceeding 12% — and they may schedule a hearing to review the contract’s fairness.
How to Structure a Legal, Enforceable Assignment
If you're a professional working with homeowners, here’s how to protect both parties:
Keep your fee below 12% total — including attorney and filing costs
Use plain language the homeowner understands
Include:
Full names and contact info for both parties
Property address and case number
A clear statement of rights being assigned
Have it notarized to confirm voluntary execution
File it with your surplus fund claim, along with any required motion
Alternatives to Assignments
If an assignment seems risky or unnecessary, consider:
Using a Power of Attorney (POA) instead
Filing as an authorized representative through probate or court order
Assisting the homeowner without taking ownership of the claim
These options may avoid court scrutiny and give the homeowner more control.
Need Help Filing or Validating an Assignment?
At Visionary Surplus Recovery, we:
Draft fully compliant, court-approved surplus assignments
Include legal counsel where required
File all paperwork on your behalf
Ensure transparency, fairness, and full homeowner understanding
We don’t charge anything upfront — and we only get paid if funds are recovered.
📞 Have Questions About Surplus Fund Assignments? Let’s Review Yours Together
👉 Start a Free Case Review
Disclaimer: This blog is for educational purposes only and does not constitute legal advice. Please consult a Florida-licensed attorney for contract review or representation.
