What Happens When Two Companies Fight Over Your Foreclosure Surplus?

A few years ago, a Florida property was sold at a tax deed auction after the owner had passed away. The sale brought in more than was owed, leaving about $33,000 in surplus. Two heirs were entitled to it. Then two different companies showed up, each holding a signed agreement from the same heir, each claiming the right to collect the money.

If you are a homeowner (or an heir) with surplus on the line, this story matters. It shows exactly what courts look for when two claimants face off.

Company one got there first. Company two got there right.

The first company arrived on the very day of the auction. A representative met one of the heirs, had her sign an assignment of her surplus rights, and promised her $1,000 for it. She signed. The company filed its claim with the county's tax deed department that same day.

The problem: the $1,000 was never paid. Not a check, not cash, nothing changed hands.

The second company came along a few weeks later. It signed both heirs, not just one. It filed its claim with the county. And critically, it did the actual work: it hired and paid an attorney to administer the deceased owner's estate, which was legally necessary before the heirs could be paid at all.

The county clerk, faced with two competing claims, did what clerks do in Florida: filed an interpleader lawsuit and let the judge sort it out.

The court's answer: a signature without payment is worthless

After about fourteen months of court proceedings, the second company filed a motion asking the judge to rule in its favor. Its argument was simple: the first company's assignment was void because no consideration was ever paid. A signed piece of paper, standing alone, does not create a binding agreement when the promised payment never arrives.

The first company agreed. Rather than fight a losing battle, it accepted a $1,000 settlement, the exact amount it had originally promised the heir, and withdrew its claim entirely.

The final judgment divided the money this way: the two heirs were paid directly by the court (about $10,000 and $11,000 each), the second company received about $7,000 for its fee, and the first company got its $1,000. Case closed.

What this means for you

1. Read the agreement before you sign anything. Know exactly what percentage the company takes and what they actually have to do to earn it. In this case, the winning company's fee was 25% of the surplus, and it earned every bit of it by paying for the estate administration itself.
2. Make sure consideration actually changes hands. If a company promises you a payment as part of signing, confirm you receive it. If they never pay, their agreement may be unenforceable, which means someone else could still come along and sign you legitimately. And it means the first company's paper is a problem you will have to clean up, in court, with attorneys, over more than a year.
3. Working companies beat fast companies. The company that showed up on sale day lost to the company that showed up three weeks later and did the real work. Speed matters less than substance.
4. You do not have to sign with anyone at all. The heirs in this case could have waited, filed their own claim with the court, and kept the full amount. The court paid them directly. A recovery company can be worth it when there is real work to do (probate, paperwork, court appearances), but you always have the option of claiming the surplus yourself.

This article is for general information only and is not legal advice. Every case is different; consult a licensed Florida attorney about your specific situation.