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Florida Banking Law Blog Legal developments impacting banking, finance and loan enforcement in Florida

Do you know where your debtor’s original promissory note is located?

Posted in Banking Operations, Legal Rulings

In August 2013, we discussed the requirements for enforcing a lost promissory note. The same year, the Florida legislature passed Section 702.015, Florida Statutes, requiring that the holder of a promissory note file an affidavit or certification regarding the location of the note at the time it files a complaint. Importantly, section 702.015 requires that the noteholder file an affidavit whether or not it is in possession of the note.

If the noteholder is in possession of the original promissory note, it must “file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that [it] is in possession of the original promissory note.”[1] The certification must include (1) the location of the note, (2) the name and title of the individual giving the certification, (3) the name of the person who personally verified such possession, and (4) the time and date on which the possession was verified. The noteholder must also attach a copy of the note and any allonges to the certification.[2]

If the noteholder is not in possession of the original promissory note (i.e., the note was lost, destroyed or stolen), the plaintiff must attach to its complaint an affidavit executed under penalty of perjury.[3] That affidavit must (1) detail a clear chain of all endorsements, transfers, or assignments of the note, (2) set forth the facts showing the plaintiff is entitled to enforce the promissory note, and (3) include as an attachment copies of the note and allonges to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note as may be available to the plaintiff.[4]

If a complaint does not comply with these relatively new requirements, section 702.015 provides that the court “may sanction the plaintiff for failure to comply with this section.”[5] Accordingly, while easily overlooked, banks and practitioners should be keenly aware of the requirements imposed by section 702.015. Based upon our research, no appellate court has yet ruled on the appropriate sanction(s) under section 702.015(6). But it is certainly possible that an aggressive defendant would ask for dismissal for failure to strictly comply with the statute.

[1]  § 702.015(4), Fla. Stat.

[2]  § 702.015(4), Fla. Stat.

[3]  § 702.015(5), Fla. Stat.

[4]  § 702.015(5)(a)–(c), Fla. Stat.

[5]  § 702.015(6), Fla. Stat.