Florida Supreme Court Rules on PACE Funding Property Liens and Assessment Authority

State Attorneys v. Florida PACE Funding Agency - Property Assessment Financing Authority

Case: State Attorneys for the Second, Seventh and Ninth Judicial Circuits v. Florida Pace Funding Agency, et al.
Court: Supreme Court of Florida
Date: December 18, 2025
Docket: SC2024-0652, SC2024-0656, SC2024-0664, SC2024-0681

Facts

Multiple state attorneys and county entities challenged the Florida PACE Funding Agency's authority to impose property assessments for energy efficiency and renewable energy improvements. PACE (Property Assessed Clean Energy) programs allow property owners to finance qualifying improvements through special assessments that become liens on the property, similar to tax assessments. The dispute centered on whether PACE assessments constitute valid special assessments under Florida law and whether they can take priority over existing mortgages and insurance claims.

The case involved consolidated appeals from Alachua County Tax Collector, Palm Beach County, and Alachua County, all challenging different aspects of PACE funding mechanisms. Property owners who had obtained PACE financing found their properties subject to liens that could potentially interfere with insurance claim settlements and mortgage obligations.

Ruling

The Florida Supreme Court issued a comprehensive ruling addressing the statutory authority for PACE assessments and their impact on property rights. The court clarified the relationship between PACE liens and other property encumbrances, including insurance proceeds and mortgage obligations. The decision established important precedent regarding how these assessments interact with property insurance claims, particularly in cases involving hurricane damage or other covered perils where insurance proceeds might be used for repairs that overlap with PACE-funded improvements.

Takeaway for Public Adjusters and Claims Professionals

This ruling has significant implications for property insurance claims involving PACE-financed improvements. Public adjusters must now carefully review properties for existing PACE assessments when handling claims, as these liens may affect how insurance proceeds are distributed and applied to repairs. The decision clarifies the priority of PACE liens relative to insurance claims, which is crucial when determining payment allocations for covered damages.

Claims professionals should be aware that properties with PACE financing may have special lien considerations that could complicate settlement negotiations. Understanding the interplay between PACE assessments and insurance coverage is essential for properly handling claims on improved properties.

How Louis Law Group Can Help: Our experienced property insurance attorneys understand the complex interactions between PACE financing and insurance claims. If you're dealing with coverage disputes involving properties with special assessments or need guidance on lien priorities, contact Louis Law Group at (833) 657-4812 for expert legal assistance.

Source: View Full Opinion on CourtListener

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