If your property has accumulated unpaid code violation fines from your city or county, those fines can become certified liens that attach to your property -- and potentially to all your real property in the county. When you are already facing mortgage foreclosure, a code enforcement lien adds another layer of complexity to any sale, short sale, or deed in lieu. Here is what Florida homeowners need to know about code enforcement liens and how they interact with foreclosure.
How Code Enforcement Liens Are Created in Florida
Florida Statute 162.09 governs municipal and county code enforcement. The typical path to a certified code enforcement lien:
- Citation issued: the municipality cites your property for a code violation -- overgrown vegetation, unpermitted construction, structural issues, unsafe conditions, abandoned vehicles, junk/debris, etc.
- Notice and correction period: you receive written notice specifying the violation and a deadline to correct it.
- Code enforcement hearing: if you do not correct the violation, a hearing is held before the Code Enforcement Board (or Special Magistrate in many municipalities). Fines are imposed: typically $50 to $250 per day for first violations; up to $1,000 per day for repeat violations or violations involving imminent danger to public health, safety, or welfare.
- Certification: after 90 days of non-compliance, the board can certify the order to the circuit court. Once certified and recorded in official records, it becomes a lien on all real and personal property of the violator in the county.
The certified lien earns 10% per year interest under Florida law. Fines that have accrued for years on a vacant or neglected property can easily reach tens or even hundreds of thousands of dollars.
Priority of Code Enforcement Liens vs. Mortgage
Lien priority in Florida is generally governed by the "first in time, first in right" principle -- the lien recorded first has the highest priority. In most cases:
- First mortgage recorded before the code lien: the mortgage has priority. A foreclosure by the first-mortgage lender extinguishes the junior code enforcement lien on the specific property.
- Code lien certified before the mortgage: this is rare for owner-occupied homes but can occur on investment properties or properties purchased with existing violations. Here, the code lien has priority and the new owner takes the property subject to the lien.
Important exception: while a first-mortgage foreclosure extinguishes the code lien as a property encumbrance, the personal obligation of the original violator may survive. The municipality can still pursue the individual who incurred the fines -- not through the property, but through a money judgment against the person. Consult a Florida attorney if you have substantial code enforcement fines and want to understand your personal exposure.
Code Enforcement Liens and Your Foreclosure Options
Selling Before Foreclosure
If you are trying to sell before foreclosure, any code enforcement liens must be disclosed to buyers and resolved at or before closing. A title company will identify all recorded code liens during the title search. The lien payoff or a negotiated reduction must be funded at closing. If you have equity, the sale proceeds can pay off both the mortgage and the code lien. Use our equity estimator to see where you stand.
Short Sale
A short sale with a code enforcement lien requires coordination on two fronts: getting your mortgage lender to approve the short sale at the reduced price, AND getting the municipality to accept a reduced payoff of the code lien from the sale proceeds. Most municipalities have a formal lien reduction process (see FAQs below) and will negotiate -- especially when the alternative is a foreclosure that extinguishes the lien entirely. Having the property in code compliance at the time of the short sale negotiation significantly improves your position with both parties.
Deed in Lieu
A deed in lieu of foreclosure requires the property to have a clear enough title for the lender to accept it. Code enforcement liens can complicate this -- the lender will require a title search and may reject a deed in lieu if significant code liens exist. Some lenders will require code lien payoffs as a condition of accepting a deed in lieu. You may need to negotiate a code lien reduction with the municipality before the lender will proceed.
Loan Modification
A loan modification does not directly resolve a code enforcement lien -- the two are separate matters. However, if a modification keeps you in the home and allows you to bring the property into compliance, the fines stop accruing and you can work toward a lien reduction over time.
How to Negotiate a Code Enforcement Lien Reduction
Most Florida municipalities have a formal process for requesting a code enforcement lien reduction or release under F.S. 162.09(3). The steps typically include:
- Bring the property into compliance first. This is the single most important step. Municipalities almost never reduce fines while a violation is still ongoing.
- Apply for a reduction hearing through the code enforcement department or special magistrate. Submit documentation of: the financial hardship, the steps taken to cure the violation, and any mitigating circumstances (illness, job loss, inherited property, etc.).
- Appear at the hearing. Present your case directly. Bring photos of the corrected violation, receipts for work done, and a realistic offer to resolve the remaining balance.
- Get the reduction in writing before closing or transferring the property. A verbal agreement from a code officer is not enforceable.
Additional Liens to Be Aware Of
Code enforcement liens are one of several government and special assessment liens that can affect Florida homeowners facing foreclosure. Related guides:
- Florida government liens and foreclosure -- property tax, CDD, and PACE loans
- Municipal code liens in Florida foreclosure
- IRS tax lien and Florida foreclosure
- HOA foreclosure in Florida
About Barrett Henry
Barrett Henry is a Broker Associate at REMAX Collective with 23+ years of real estate experience helping Florida homeowners navigate complex foreclosure situations -- including properties with code enforcement liens, HOA liens, and other title encumbrances. Barrett can help you evaluate whether a pre- foreclosure sale, short sale, or deed in lieu makes sense given your specific lien situation, and can coordinate with the municipality on your behalf. Barrett serves all 67 Florida counties.
Have a code enforcement lien on a property facing foreclosure? Contact us today for a free consultation -- no cost, no obligation.
