If a property was sold at a tax foreclosure auction in Texas, tye owner of the property may be entitled to excess proceeds. That is the remaining funds after all debts, taxes, and fees have been paid. However, to recover these funds, there are some legal process that must be navigated that requires some specific requirements. In this blog post, we’ll provide an overview of excess proceeds recovery and the steps you need to take to claim your funds.
What Are Excess Proceeds?
Excess proceeds refer to the surplus money left after a property is sold at a tax foreclosure auction for more than the amount owed in delinquent taxes, penalties, interest, and fees. Two years before, they were forfeited to local taxing authorities.
Who Can Claim Excess Proceeds?
In Texas, several parties may be eligible to claim excess proceeds from a tax sale. If multiple parties claim the funds, the court will determine how they are distributed. The parties that can claim excess proceeds are:
- Former property owners who lost their property in the tax sale.
- Lienholders who had a financial interest in the property.
- Heirs of the former owner, provided they can prove their relationship.
The Legal Process for Claiming Excess Proceeds
To successfully recover excess proceeds in Texas, you must follow these steps:
- File a Petition in Court
- Submit a claim to the district court in the county where the property was sold.
- The petition must be filed within two years of the sale date.
- Provide Documentation
- You must present proof of ownership, lienholder status, or heirship.
- Required documents may include a deed, lien release, or probate records.
- Pay Court Fees
- Some counties require filing fees to process the claim.
- Additional administrative fees may apply.
- Attend a Hearing
- If multiple claims exist, the court will hold a hearing to determine rightful ownership.
- Depending on the county, hearings may be conducted in person, via Zoom, or by phone.
Investor Opportunities in Excess Proceeds
Excess proceeds recovery isn’t just for former property owners; it can also be an investment opportunity. Investors can legally acquire rights to excess proceeds by securing an assignment or transfer from the original claimant. However, Texas law imposes strict regulations on these transactions:
- The assignment must be in writing and signed by the original claimant.
- The investor must pay the claimant at the time of the assignment.
- The amount an investor can receive is capped at 125% of what they paid the claimant.
Failure to comply with these regulations can result in legal penalties, including repayment of excess proceeds plus attorney fees.
Final Thought
The process of recovering excess proceeds can be complex, and missing deadlines or failing to provide proper documentation could result in losing your claim. Many individuals hire an attorney to ensure they follow the correct legal procedures and maximize their chances of receiving the funds.
If you believe you have excess proceeds waiting for you, act quickly to secure your rightful claim before the deadline expires.
At Abii and Associates, we have years of experience helping clients, including, individuals, businesses, trusts and non-profit entities, recover excess proceeds in Texas. We can assist you with every step of the excess proceeds recovery process. Our experienced attorneys can help you file a claim, provide the necessary documentation and research, defend you and your claim against competing claimants and represent you at any required hearings.