Detailed Answer
Short answer: If a property is sold at a California tax sale for more than the taxes, penalties, interest, and sale costs, the extra money (often called “surplus,” “excess proceeds,” or “overage”) does not belong to the buyer. California law provides a process for former owners and other entitled parties (for example, junior lienholders) to claim those surplus funds from the county. To recover the money you must: (1) confirm that surplus exists, (2) file a formal claim with the county tax collector or treasurer, (3) provide proof of your entitlement, and (4) cooperate while the county verifies and distributes the funds.
Where the rules live
California’s statutes that govern tax-defaulted property and sales are found in the Revenue and Taxation Code (see Part 6). For the exact statutory language and related provisions, consult the California Legislative Information site: https://leginfo.legislature.ca.gov/faces/codes.xhtml
Who is entitled to surplus funds?
- First priority is generally the former owner of record (the person or entity that owned the property before the tax sale).
- If the former owner is not entitled or does not claim the funds, junior lienholders (mortgages, judgment liens, recorded encumbrances) may have a right to part or all of the surplus in order of their priority.
- Other claimants (assignees, successors in interest, probate estate representatives) can claim, but must prove their status.
Step-by-step process to recover surplus funds (typical county practice)
- Confirm there are surplus funds. Contact the county tax collector/treasurer where the property is located or look up the sale record. The county will show the sale price and the amounts it deducted for taxes, penalties, and sale costs; a surplus exists if sale price exceeds those amounts.
- Identify the correct county office and procedure. Counties may label the office differently (Tax Collector, Treasurer-Tax Collector, Auditor-Controller). Visit that office’s website or call to ask for the “excess proceeds” or “surplus funds” claim procedure and the required forms.
- Gather required documents. Typical items include:
- Government-issued photo ID for individuals;
- Proof of ownership before the sale (recorded deed, property tax records, or other evidence showing you were the owner of record at the time of sale);
- Recorded documents or statements proving lien priority for lienholders (e.g., recorded mortgage);
- If claiming on behalf of someone else: power of attorney, letters testamentary, or letters of administration;
- If the owner is deceased: death certificate and proof you are personal representative or heir;
- Any county claim form (many counties have a standard form).
- File a written, verified claim with the county. Submit the county’s claim form along with the supporting documents and any required notarization. Some counties accept in-person filings, mail, or online submission.
- County review and payment or dispute. The county will verify your claim against its records and the sale accounting. If the county approves, it issues payment for the approved amount. If the county rejects or limits your claim (for example, another claimant has priority), they should notify you and explain next steps. In disputed cases, claimants may need to file a court action to adjudicate competing claims.
Timing and deadlines
Procedures and timing vary by county. There is not a single uniform short deadline across all California counties for filing a surplus claim, but you should act promptly. Delays can make recovery harder (records get archived, claimants become harder to locate). If the county has posted procedures, follow those timelines carefully. If the county denies your claim, you may need to bring a civil action in the appropriate court to assert your rights.
What if multiple parties claim the surplus?
If more than one party claims the funds, the county will generally follow the statutory priority rules and its internal procedures. When priority is unclear or claimants dispute rights, the county may require a court order before releasing funds. In that case, a civil lawsuit or an application to the court may be necessary to resolve competing claims.
If you cannot locate the surplus
Sometimes the buyer paid the county directly and the county posted or transferred the surplus; other times it remains in the county treasury. Start with the county tax collector/treasurer-auditor, provide the parcel number or sale information, and ask them to search for “excess proceeds” for that sale.
Costs and practical considerations
- Counties may require notarized documents or charge small administrative fees.
- Hiring an attorney may be necessary if there is a priority dispute or a complex chain of title, but for straightforward claims many people recover funds without litigation.
- Be wary of third-party “surplus recovery” companies that charge high fees—verify the company and read any fee agreement carefully.
When to consider court help
Consider hiring an attorney or filing a court action if:
- The county refuses to release funds despite apparently valid proof;
- Multiple claimants dispute priority and the county requires a court order;
- Your claim involves estates, bankruptcies, or assignments that complicate entitlement.
Where to find the law and county procedures
Review the Revenue and Taxation Code for statutory rules governing tax-defaulted property (search Part 6 on the California Legislative Information site): https://leginfo.legislature.ca.gov/faces/codes.xhtml. Also contact the county tax collector/treasurer where the property was sold for that county’s specific forms and instructions.
Disclaimer: I am not a lawyer. This article is for general information only and is not legal advice. For advice about a specific situation, consult a licensed California attorney or the county office handling the sale.
Helpful Hints
- Start with the county tax collector/treasurer—most answers and the claim form are available there.
- Have the parcel number, sale date, and sale amount ready when you contact the county.
- Collect all recorded documents (deeds, mortgage instruments, assignments) before you file a claim.
- If the owner is deceased, obtain certified death records and probate or letters of administration early.
- Keep copies of everything you send; send by tracked mail if mailing documents.
- Act promptly—searching and paperwork gets harder as time passes.
- Be cautious with recovery firms; a reputable attorney or working directly with the county often costs less than high-fee finders.