Law360, Miami (October 27, 2017, 8:25 PM EDT) — When a mortgage company loaned money to a Miami buyer in 2007, the lender didn’t know the homeowner would improperly claim a homestead property tax exemption. It wasn’t until seven years later that the county would file a lien for the unpaid taxes, a lien that a Florida appeals court now says applies retroactively and takes priority over the mortgage.

The decision, issued Oct. 18, could cause headaches for lenders and title insurers who will now need to worry about priority liens popping up after closing and applying retroactively.
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The biggest issue with the decision is its retroactive nature, which could, depending on the property and how long the homeowner wrongly claimed the exemption, lead to liabilities of hundreds of thousands of dollars, according to Farach. By law, a tax assessor can claim up to 10 years’ worth of back taxes for improper homestead exemptions.
“Florida has always been a first in time, first in right state, with one exception: that government liens are superior,” said Marko Cerenko, a partner at Kluger Kaplan Silverman Katzen & Levine PL. “But this means you can go back in time and prioritize a subsequent lien.”

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