Routes & Forms

THE SURPLUS CLAIM PROCESS

There are two different routes you can take with your new client.
Contingency Agreement + Power of Attorney OR Assignment of Interest

Below you will find a brief description of those documents plus a step-by-step of what you need in each scenario

CONTINGENCY AGREEMENT + POWER OF ATTORNEY

The Contingency Agreement Form is an Agreement between you and your client so you receive a percentage of the surplus as payment only if and when the claim is successful. Unlike using an Assignment of Interest, the surplus in this scenario is paid to the person, not you. Therefore this Agreement protects you in the event the person receives the surplus and does not honor the terms of the agreement.

This Limited Power of Attorney Form allows you to act on clients behalf as if you are the claimant. This form is one that the client fills out (notarized) and you file it with the Clerk of Court along with the Surplus Claim Form and any other documents requested. This form basically allows the Clerk of Court to treat you as if you ARE the person owed the surplus. It allows you to reply, submit forms, and any other steps that need to be taken. YOU specify the terms on the Power of Attorney Form. You put down what you are allowed to do and the client agrees to the terms and signs the form.

ASSIGNMENT OF INTEREST

The Assignment of Interest Form is used when the person is turning over their interest in the surplus to you. Some examples of when this may be used are as follows:

  1. You, as an Asset Recovery Business, pay them up front, an amount smaller than the surplus. They are taken out of the equation and you claim the full amount of surplus for yourself. Let’s say there is a $20,000 surplus. You agree that in exchange for you giving them $10,000 right now, they sign over the full claim to you. You receive and keep the full $20,000 ($10,000 profit for you). This, of course, is very risky unless there are NO liens or mortgages on the property and you are 100% positive the claim will be successful.
  2. You come to an agreement with the person that no money is exchanged at all until if and when the claim is successful. Let’s say there is $20,000 in unclaimed surplus. You agree that in exchange for them signing the Assignment of Interest over to you, when the claim is successful and you receive the $20,000, you will pay them a certain percentage or flat amount.
  3. For whatever reason, the person has zero interest in the claim at all. Maybe it’s a well-off friend or relative, maybe they just don’t care. If they have no plans on ever claiming the surplus, they can sign the Assignment of Interest over to you, and you file the claim for yourself.

It IS possible the Clerk of Court may require a Power of Attorney (POA) as well. As long as the client is signing the Assignment of Interest, it can’t hurt to have the Limited POA signed as well.

CHECKLIST OF DOCUMENTS NEEDED

The list you need depends on the route you will take as well as “who you are”.

  1. You are an Individual and using an Assignment of Interest (Individual AOI)
  2. You are a Business and using an Assignment of Interest (Business AOI)
  3. You are an individual and using a Contingency Agreement + Power of Attorney (Individual CA/POA)
  4. You are a Business and using a Contingency Agreement + Power of Attorney (Business CA/POA)
1. Individual AOI 2. Business AOI
3. Individual CA/POA 4. Business CA/POA

* Surplus Notice from County: This is a letter the County mails out to all ‘interested parties’ notifying them that there is surplus available from after the auction. It typically takes about 5 day to 2 weeks for the County to put this documents online. You can find it in the same area where the Property Information Report is found. If this is a County that does not put their documents online, you would need to contact them for a copy of the letter. However, sometimes a County Clerk will require your clients permission to obtain the letter. If you have an AOI signed and notarized, you have replaced your client as the one who is due the surplus money. If you have a signed and notarized Power of Attorney document, that is your client giving you permission to perform tasks on their behalf, so if you give that to the County Clerk, that should be all that is needed in order to obtain the Surplus Notice.

** Owners Deed to Property: You need the deed to the property showing that your client was the owner of the property as of the day of the auction. We teach you how to locate this document in each individual video for the counties. Visit the County Pages and choose the correct county to watch the video.

3rd ROUTE POSSIBILITY: STRUCTURED BUYOUT

You may also heard about a “structured buyout”. Briefly described, this is where you have the property owner sign a Quit Claim deed over to you before the auction happens and then you still let it go to auction. Doing this makes YOU the owner of the property when the auction happens and therefore, you can easily put in a claim and handle everything without having to go back and forth to the owner, trying to get everything signed, etc. It’s a much more simple way of dealing with the recovery of excess proceeds.

However, typically, you give the property owner $xx amount of money at the time of the signing of the Quit Claim and then a promise of xx% of the excess proceeds amount after the auction IF THE AUCTION IS SUCCESSFUL. There are many things that can go wrong to where there is no excess proceeds after the auction, which means you just lost the upfront money you gave in exchange for the Quit Claim: Not enough bidders, not a high enough ending bid, hidden HOA liens or other liens you did not see…. You must, absolutely MUST deeply research property liens before attempting this route.

On the flip side, since you are taking on so much risk, it is not uncommon to ask for upwards of 50-60% of the surplus for yourself.

For obvious reasons, to do a Structured Buyout, you need records of properties before they hit the auction block. TaxAuctionSurplus.com and SurplusDatabasepro.com do not provide records from before the auction but our website FloridaTaxAuction.com does.

Here is an excellent video by Nick Fullmer about Structured Buyouts