Probate Claim: To File or Not to File
The borrower died and administration of the estate has begun. Chapter 733 of the Florida Statutes governs the administration of an estate in Florida. Section 733.2121(1) requires that the personal representative promptly publish a notice to creditors unless the creditor’s claim is otherwise barred by section 733.710. The creditor’s claim will be barred if not filed within two years of the date of death; however, an exception is made for foreclosures and the enforcement of a duly recorded mortgage, security interest, or lien. Fla. Stat. §733.710 (2016). Section 733.702 states that, unless a claim is filed in the probate proceeding on or before the later of the date that is 3 months after the time of the first publication of the notice to creditors or 30 days after the date of service on the creditor, the claim will be barred and no claim of damages will be binding on the estate, personal representative, or any beneficiary. Fla. Stat. §733.702 (2016). Again, it is noted that nothing in section 733.702 affects or prevents a “proceeding to enforce any mortgage, security interest, or other lien on the property of the decedent.” Fla. Stat. §733.702(4)(a) (2016).
By the plain meaning of the statute, the legislature did not intend to limit the enforcement or foreclosure of a recorded mortgage lien. However, the question becomes whether the mortgagee can seek the deficiency from the estate. The case law appears to establish that the mortgagee’s failure to file a claim in the probate proceeding within the statutory time period would result in its inability to recover a deficiency judgment from the estate. See In re Comstock’s Estate, 197 So. 121, 124 (Fla. 1940)(finding that the mortgagee could not recover from the estate after failing to file a claim in the probate proceeding); In re Simpson’s Estate, 113 So. 2d 766, 768-69 (Fla. 2d DCA 1959)(recognizing that the mortgagee’s withdrawal of its claim in the probate proceeding did not affect its right to foreclose, but meant that it could not claim a deficiency decree against the estate); Furlong v. Coral Gables Fed. Sav. & Loan Ass’n, 121 So. 2d 797, 801 (Fla. 3d DCA 1960)(confirming that, in absence of a claim, the estate is precluded from paying amounts sought by the mortgagee). Accordingly, while the mortgagee’s right to foreclose its duly recorded mortgage is not limited by its failure to file a claim in the probate proceeding, per the established case law, its right to seek a deficiency judgment against the estate will be barred if a claim is not timely filed.