Assignment of Rents -Requirements of Lenders

Florida Statute 697.07 allows banks to obtain an assignment of rents as additional security in the event of default of a mortgage.  Sending a written demand under Florida Statute 697.07(3) is a crucial step in perfecting the lender’s right to rental payments. After default and upon a written demand by the mortgagee, the mortgagor must deliver all rents in their possession at the time of the demand or collected thereafter, if they are not used for expenses approved by the mortgagee. This requirement is outlined in F.S. 697.07(3).

In Florida, the Florida Statutes (F.S.) provide specific guidelines for handling mortgage foreclosures. At the heart of these regulations lies the authority granted to courts to enforce the payment of rents into the registry of the court, regardless of any defenses or counterclaims made by the mortgagor.  It’s important to note that the statute can be applied retroactively to mortgages predating its enactment and to sequester rents collected before its enactment. 

The court may opt to require the mortgagor to pay the rents into a designated depository, potentially allowing for deposits into interest-bearing escrow accounts exempt from the statutorily imposed court registry fees. This alternative approach is outlined in F.S. 697.07(4), providing flexibility and accommodating various circumstances.

To safeguard the collateral during the foreclosure proceedings, the court may authorize the use of the collected rents before they are deposited into the registry of the court or another designated depository. These funds can then be utilized to cover the reasonable expenses necessary for protecting, preserving, and operating the real property. Additionally, the collected rents can be used to pay escrow sums required by the mortgagee or to fulfill separate assignments of rents instruments. Finally, the collected rents can be used to satisfy the mortgagee’s claim.

Protect Your Rights with a Miami Foreclosure Defense Lawyer

Considering the seriousness of a demand for assignment of rents, which seeks to deprive the borrower of crucial income essential for their business, it is crucial for borrowers to seek legal counsel and ensure that their rights are protected. The Law Office of Andrew J. Pascale, P.A., has a proven track record of successfully representing homeowners in foreclosure cases, providing them with the expertise and guidance they need to navigate this challenging process. Contact us today at 877-667-1211 to learn more about our services and how we can help you protect your rights in a Florida foreclosure.