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Florida SOL Does Not Bar Foreclosure | Key Points

  • In Ventures Tr. 2013-I-NH v. Johnson, the court granted rehearing and replaced a prior written opinion with an unwritten affirmance dismissing the bank’s foreclosure action. The prior opinion, now withdrawn, affirmed the lower court’s dismissal of a foreclosure action based on application of the statute of limitations. On rehearing, although the dismissal was found to be appropriate, ostensibly, the basis for dismissal was the bank’s failure to preserve certain issues for appellate review rather than application of the five-year statute of limitations – not based on a finding that the statute of limitations prevented the action.
  • In Klebanoff v. Bank of N.Y. Mellon, issued the same day as Johnson, the 5th DCA provided a detailed analysis of why the statute of limitations did not prevent a lender from foreclosing its lien despite an initial default date more than five years from the date the bank filed its complaint. The court explained the statute of limitations did not bar the foreclosure action because the Bank alleged and proved that the subject mortgage was in a continuous state of default since the initial default date.
  • Based on the holding of Klebanoff, — as long as a foreclosure complaint includes allegations regarding the borrower’s continued default, a bank’s foreclosure complaint should survive a motion to dismiss even if the default was alleged to have occurred more than five years prior to filing the complaint. As long as the continued nature of the borrower’s default can be proven on summary judgment or at trial, the bank should be able to successfully foreclose its lien and accelerate all sums due under the note despite an initial default date greater than five years from the date the bank filed the complaint.