Disclaimers Of Interest In Florida Foreclosure Cases

Written By Ian Patrick Hudson, Esq.

As we gear up for what is shaping up to be another influx of foreclosures, we have found a potential area of liability to be addressed. In the past, it has been common practice to offer heirs of deceased borrowers a disclaimer of interest in order to remove themselves from the foreclosure. However, the language of Chapter 739, the Florida Uniform Disclaimer of Property Interests Act, renders that practice problematic.

§ 739.201, “Disclaimer of interest in property,” specifically subsection (3)(a), states in pertinent part that “If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the interest was created, unless under the governing instrument or other applicable law the disclaimed interest is contingent on surviving to the time of distribution, in which case the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution.” Therefore, anytime an heir disclaims interest under the statute, the heirs of the dislaimant would then need to be named, and any foreclosure complaint would have to be amended to include them.

Due to the additional time and expense involved in allowing that, we strongly advise that a disclaimer of interest not be offered to parties in foreclosure actions. Best practice is to serve all heirs and proceed forward with the case. As always, please check with your local counsel for legal advice.