Excess Proceeds

Recovery of Excess Proceeds following Tax Sale or Mortgage Foreclosure Sale

Our attorneys can assist with recovery of excess proceeds following a tax or mortgage foreclosure sale. If you receive notice of intent to file a tax foreclosure lawsuit, we may be able to assist.  If a property becomes delinquent in taxes, the taxing authority, whether a county, city, or school district, may file suit to collect the taxes.  If the taxes are not paid, a judgment will be entered for the amount owed.   The court will then authorize the sheriff to sell the property to satisfy the judgment.  This sale takes place at a tax sale or auction, held usually on the first Tuesday of every month in the county where the property is located.

Sometimes the property is sold for more than what is owed in taxes.  In those instances, the excess funds are deposited into the court registry for the benefit of the prior owner.  In many cases, the property has been passed through the intestate laws of heirship to the descendants of the record title holder.   Once those funds are deposited into the court registry, Texas law allows a person who would be entitled to those proceeds to file a petition in the court that ordered the sale, setting forth a claim to the proceeds. This petition must be filed within two years from the date of the sale of the property and state the basis for claim with supporting documentation, such as deed history, affidavit of heirship and probate records.   The court holds a hearing, and at the hearing the court orders the proceeds to be paid to the owner according to the priorities established by Tex. Tax Code Ann. § 34.04.   If you have received notice that states you may be entitled to proceeds from a tax sale, we can help to evaluate whether you would be entitled to the proceeds and assist with recovering those excess proceeds on your behalf.