Power of Judgment Liens and Priority of Judgment Liens
The priority of liens matter. A recent case, Aquastar Holdings, LLC v. Peckar & Abramson, P.C., 50 Fla.L.Weekly D1333b (Fla. 3d DCA 2025), discusses the priority of a judgment lien and the difference between a judgement lien and another type of encumbrance, such as a mortgage. In this case a judgment creditor recorded a judgment lien which created a lien on real property owned by the judgment debtor. After the judgment lien was recorded, a mortgage was placed on the only property owned by the debtor. The judgment creditor had the property sold at a sheriff’s auction when it executed on the judgment and purchased the property at the sale. Subsequently, the mortgagee (that recorded the mortgage after the judgment lien) argued, among other things, its mortgage was not extinguished and moved to foreclose on the same property. While the trial court agreed with the mortgagee, the appellate court in Aquastar Holdings disagreed and sided with the judgment creditor because a judgment lien is NOT analyzed under traditional foreclosure case law:
Judgment Liens
The creation of liens on real property by money judgments is governed by § 55.10(1), Florida Statutes (2024):
A judgment, order, or decree becomes a lien on real property in any county when a certified copy of it is recorded in the official records or judgment lien record of the county, whichever is maintained at the time of recordation, provided that the judgment, order, or decree contains the address of the person who has a lien as a result of such judgment, order, or decree or a separate affidavit is recorded simultaneously with the judgment, order, or decree stating the address of the person who has a lien as a result of such judgment, order, or decree.
See also Martinez v. Reyes, 405 So. 2d 468, 469 (Fla. 3d DCA 1981) (“In order to create a lien on real property, a certified copy of a judgment or decree must be recorded in the official records of the county where the property is located.” (citations omitted)); In re Whelan, 325 B.R. 462, 463 (Bankr. M.D. Fla. 2005) (“Under Florida law, the impact of the recordation of a judgment on real property owned by the judgment debtor creates a judgment lien on the debtor’s property, which grants the judgment creditor a secured status.” (citing B.A. Lott, Inc. v. Padgett, 114 So. 2d 667, 668-69 (Fla. 1943))).
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“A valid money judgment which has been duly recorded and entered as a lien against land ‘must be accorded its legal effect until it is satisfied by payment (see § 55.141, Fla. Stat.) or the lien thereof expires as provided by law (see §§ 55.081 and 55.10, Fla. Stat.) or judicial relief from judgment is properly granted a party or his legal representative for a reason recognized in law (see Fla. R. Civ. P. 1.540).’ ” Lamchick, Glucksman & Johnston, P.A. v. City Nat. Bank of Fla., 659 So. 2d 1118, 1120 (Fla. 3d DCA 1995) (quoting Sharpe v. Calabrese, 528 So. 2d 947, 950 (Fla. 5th DCA 1988)).
Aquastar Holdings, supra.
Priority of Judgment Liens
The trial court concluded that the Property was “sold subject to all liens of record” because “when a junior mortgagee is omitted as a party to the foreclosure of a senior mortgage, the lien of the junior mortgagee is unaffected by the judgment.”
This was erroneous because when [judgment creditor] executed [judgment creditor’s] Judgment Lien against [judgment debtor], that was not a foreclosure proceeding. In mischaracterizing it as such, the trial court applied foreclosure caselaw that is inapplicable and failed to apply the execution caselaw that is applicable. As the purchaser at a Sheriff’s execution sale, [judgment creditor] took title subject only to encumbrances existing at the time it recorded [judgment creditor’s] Judgment, not encumbrances created after the recordation of its judgment, such as [mortgagee’s] Mortgage. See Mansfield v. Johnson, 40 So. 196, 200 (1906) (“It is said that the purchaser at an execution sale takes only the right, title, and interest which the execution debtor had, subject to equities existing at the time the judgment was recorded[.]”). This rule was reiterated in Young Land USA, Inc. v. Credo LLC, 278 So. 3d 776, 778 (Fla. 3d DCA 2019):
Appellant asserts that its encumbrance was improvidently extinguished. “It is said that the purchaser at an execution sale takes only the right, title, and interest which the execution debtors had, subject to equities existing at the time the judgment was recorded.” [Mansfield, 40 So. at 200]. Accordingly, it is well-established that “the title delivered pursuant to an execution sale of real property relates back to the date of recordation of the judgment upon which the sale was based.” Klein v. Advance Mortg. Corp., 450 So. 2d 601, 601 (Fla. 4th DCA 1984) (citations omitted); see also Sperling v. United States, 994 So. 2d 1139, 1140 (Fla. 3d DCA 2008) (“[T]he title under [a] sheriff’s deed ‘relates back’ to the priority of the recorded judgment that is the basis for execution and sale.”).
Aquastar Holdings, supra.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
