By: Christos Pavlidis, Esq. and Shirell Mosby, Esq.
The foreclosure process varies from state to state. There are two types of foreclosures- judicial and non-judicial. A judicial foreclosure is a court preceding that begins when the lender files a complaint and records a notice in the public land records announcing a claim on the property to potential buyers, creditors, and other interested parties. The complaint asks the court to allow the lender to foreclose its lien and take possession of the property as a remedy for non-payment. Florida is one of twenty two (22) states using the judicial foreclosure process.
Since judicial foreclosure requires court intervention every step of the way, the cancellation of a foreclosure sale is also governed by the court. In Florida, the starting point for cancelling or rescheduling a sale is Form 1.996(c) of the Florida Rules of Civil Procedure- Motion to Cancel and Reschedule Foreclosure Sale. Form 1.996(c) requires the Plaintiff to provide the date the court entered Final Judgment of Foreclosure, the current sale date, and the reason for cancelling the sale.
The reason given for cancellation is very important and each county in Florida requires different supporting documents for cancelling and rescheduling a sale. Some common reasons given for cancelling a sale are: loss mitigation review, short sale review, or the borrowers filed bankruptcy. When the lender wants to cancel a sale, it is important to take note of the county in which the property is located and the requirements for each county. Best practice is to provide a valid cancellation reason and any supporting documentation that will support the cancellation reason.
In addition to supporting documentation, some counties also have timeframes in which a motion to cancel sale must be filed with the court. Furthermore, the number of times a sale has been cancelled can weigh in on whether a judge is inclined to grant or deny a Motion to Cancel Sale. Below are a few of the more populous counties in Florida and a list of some of their requirements.
- All Motions to Cancel Sale must be docketed at least 8 days prior to the sale date.
- A Notice of Cancellation form must be faxed or filed no later than 8:00 AM the day of the scheduled sale with the Clerk of Court.
- Once the Motion to Cancel is received, the clerk will automatically cancel the sale.
- All Motions to Cancel and Reschedule Sale require a hearing be set before the sale date. No Orders will be entered without a hearing.
- If Plaintiff has a stipulated Order to cancel a foreclosure sale, it can be submitted to the Judge at least 24 hours before the sale date and the sale will be cancelled without a hearing.
- A Motion to Cancel Sale must be filed with the Court.
- The motion must state the reason the scheduled sale is being cancelled. If rescheduling a sale, the motion must state the reason the earlier foreclosure sale was cancelled and the reason the upcoming sale should be canceled.
- Documentary evidence to support the cancellation reason must be submitted with the Motion to Cancel Sale.
Palm Beach County
- The Motion to Cancel Sale and Reschedule Sale must be filed at least seven (7) business days before the sale date.
- The filing of a motion in and of itself will not automatically result in the cancellation of the foreclosure sale.
- A Court Order is required to cancel any scheduled foreclosure sale, with the filing of bankruptcy as the only exception.
- A Motion to Cancel Sale must be filed with the Court in substantial compliance with Form 1.996(c).
- The motion must state the number of times the Plaintiff has previously requested the cancellation of sale and must include an affidavit with supporting grounds for the motion.
The cancellation of a foreclosure sale also raises a very important issue for attorneys. From an attorney’s prospective, filing a Motion to Cancel Sale has an ethical component. Attorneys are bound by the Florida Rules of Professional Conduct and when signing motions, have to ensure the information is factually correct. According to Rule 4-3.3, a lawyer shall not knowingly make a false statement of fact or law to a court. If the reason cited for cancelling the sale is not a true and correct representation of the nature of the cancellation reason, an attorney may be faced with an ethical dilemma. In some cases, an attorney may refuse to sign such a Motion if the reason cited is incorrect.
When cancelling a sale, it is very important for Lenders/Servicers and the attorneys to communicate. If an attorney needs more information before filing a Motion to Cancel and the sale date is looming, communication is a crucial necessity to ensure all objectives are met and the Motion complies with all laws governing the cancellation of a foreclosure sale.