Detailed Answer

This article explains how surplus money is handled after a property is sold at a tax sale in Arizona, who can claim it, and practical steps to recover those funds. This is educational information only and not legal advice. For questions about a specific case, consult a licensed attorney or your county treasurer.

Overview of surplus funds after a tax sale in Arizona

When a county conducts a tax sale, the sale proceeds first cover the delinquent taxes, interest, penalties, and the county’s sale costs. If the sale brings in more than those amounts, the extra is called a surplus (sometimes called an overage). Arizona law governs the sale process and distribution of proceeds; see Arizona Revised Statutes, Title 42, Chapter 18 for the statutory framework: A.R.S. Title 42, Chapter 18 (Delinquent Property Taxes).

Who is entitled to the surplus?

Priority for surplus distribution generally follows these rules:

First, the county must pay all of the amounts owed because of the tax sale (taxes, penalties, interest, fees and sale costs).
Next, any recorded liens or encumbrances that have priority over the purchaser’s rights (such as certain junior liens) may have a claim depending on their rank at the time of sale.
The former record owner of the property is typically next in line to claim any remaining surplus, subject to any superior lien or claim that persists after the sale.
If multiple parties claim the same surplus, the county may require proof and may interplead (deposit) the funds with the court until a court determines the rightful owner.

Typical process to recover surplus funds (step-by-step)

Confirm a surplus exists. Obtain the tax sale results from the county treasurer or the county tax-sale records. You will need the sale price and the amount needed to cover the taxes, interest, penalties and sale costs.
Identify who has a valid claim. Check the county assessor’s and recorder’s records for the chain of title and any liens. Common claimants: the prior owner, junior lienholders, or other claimants with a recorded interest superior to the purchaser’s claim.
Contact the county treasurer. The treasurer’s office administers tax sales and distributes sale proceeds. Ask the treasurer what the county’s procedure is for claiming surplus funds and request any required claim forms.
Gather documentation. Typical documents the county will require include government-issued photo ID, proof of ownership or interest (deed, mortgage, recorded lien, assignment), court documents (probate or guardianship papers if claiming through an estate), and any documents showing an interest in the property on the date of sale.
File the claim with the treasurer (or other county authority). Submit the completed claim form and supporting documents. The county will review the claim and may require notarized affidavits or certified copies of recorded instruments.
If the county rejects or if multiple claimants exist. The county may deny a claim or receive competing claims. In those cases, the county often interpleads the funds into superior court and asks the court to decide ownership. Claimants should be prepared to file a civil action or defend a claim in county superior court.
Receive payment or pursue court action. If the treasurer approves your claim, the county will issue payment according to its procedures. If the county deposits the funds with a court, you will need to follow court procedures to obtain an order directing distribution to you.

Important practical points

Start with the county treasurer’s office. Each county handles claims slightly differently. The treasurer can tell you the form, fee (if any), and timeline to submit a claim.
Document priority. If you are a junior lienholder or the former owner, show recorded documents proving your interest at the time of the tax sale.
Be prepared for litigation when claims conflict. When multiple parties claim the same surplus, a court may need to decide.
Act promptly. Counties sometimes have administrative deadlines and statutes of limitations that affect claims. Even if a specific statute or deadline is not obvious, delaying can make it harder to collect evidence and persuade the county or court.
Records matter. Obtain certified copies of deeds, lien documents, assignments and the tax sale record. Clear documentary evidence shortens processing time.

When to consult an attorney

Talk to a lawyer if:

Multiple parties claim the surplus and a court action is likely.
Your claim depends on a contested priority (for example, who had a superior lien on the date of sale).
You are a trustee, estate representative, or legal guardian making a claim and need help proving authority to act.

Statutes and resources

Arizona’s rules about delinquent property taxes, tax sales and distribution of proceeds are located in Title 42, Chapter 18 of the Arizona Revised Statutes. Review that chapter for statutory language and procedures: A.R.S. Title 42, Chapter 18 (Delinquent Property Taxes). For county-specific instructions, contact the county treasurer where the sale occurred. The Arizona judicial branch (https://www.azcourts.gov/) can provide information about filing an interpleader or other civil actions if the county deposits surplus funds in court.

Helpful Hints

Begin at the county treasurer’s office—most recoveries start there.
Bring certified copies of recorded documents, not just photocopies.
If you represent an estate or trust, bring letters testamentary, a trust document, or court appointments proving authority.
Keep a clear timeline of events: when taxes became delinquent, date of sale, and any notices received.
Expect delays if the county must verify competing claims or if the matter goes to court.
If the county interpleads funds, consult an attorney quickly to avoid missing procedural deadlines in superior court.
Use the Arizona Revised Statutes (Title 42, Chapter 18) to understand statutory rights, but rely on county guidance for local procedures.

Disclaimer: This information is educational only and does not constitute legal advice. Laws change and facts matter—consult a licensed Arizona attorney or the county treasurer for advice about a specific situation.