Have you ever wondered what happens if the tax sale generates more money than required to pay the tax lien— and who gets that money?
What Are Excess Funds?
In Georgia, foreclosures move pretty quickly. In many cases that means that distressed homeowners cannot come up with the money they need to pay the arrears they owe in back taxes to prevent their home from going to tax sale.
Sometimes, a tax sale generates more money than required to pay off the tax lien. This overage of funds following tax sale, is generally referred to as “excess funds” or “surplus funds.”
Who Gets the Excess Funds?
The good news (if there can be good news with regard to tax sales), is that the government takes only what it is owed in back taxes (and any required fees or penalties, of course). Any leftover funds (excess or surplus funds) may be claimed by:
- the record owner of the property at the time of the tax sale,
- the record owner of each security deed affecting the property, or
- by any other party having any recorded equity interest or claim in the property at the time of the tax sale.
Excess funds from a tax sale are subject to priority claims. That means that those persons/parties with a superior right to the funds will be paid first.
How Do You Get Excess Funds?
If you were the record owner of property sold at a tax sale that generated excess funds, you may be wondering what you need to do to get those funds. Of course, the best thing you can do if you are in this position is to consult with experienced real estate counsel in Georgia.
There is a procedure for claiming excess funds. What you must do is submit a written claim to the excess funds to the Tax Commissioner in the county where the property exists. The general procedure is for the excess funds to be distributed in order of claim priority. If there are several claimants and/or there is any dispute as to which claimant has priority to the funds, the funds may be interpleaded with the court. In that case, the court will decide how much of the excess funds each claimant is entitled to and how the funds should be distributed.
Real Estate Attorneys in Georgia
If you believe you may be entitled to excess funds after a tax sale, or if you have any other real property issue, contact us. We have the experience you need. We are a real estate firm with offices in Cumming, Georgia and we serve Atlanta and the surrounding counties. To schedule your free phone consultation, call us at: 770-888-7707. Or you can contact us here.