Overview

When a municipality in Connecticut sells a property to collect unpaid property taxes, the sale can produce more money than what was needed to satisfy the tax lien, fees, interest, and sale costs. That excess is commonly called “surplus” or “overage.” Connecticut law provides ways for people with a legal interest in the property (former owners, mortgagees, judgment creditors, etc.) to recover these surplus funds—but recovering them requires following specific local and state procedures, providing documentation, and sometimes asking a court to decide disputed claims.

Who may be entitled to surplus funds?

Typical claimants include:

• The former record owner(s) of the property;
• Mortgagees or holders of prior recorded liens who still have an interest after the tax-related lien was paid;
• Other parties with recorded or enforceable claims that survived the tax sale (judgment creditors, lienholders, etc.).

How the priority generally works

Municipal tax liens and the costs of sale are paid first from the proceeds. Remaining funds are distributed according to priority among other lienholders and then to the former owner. Priority rules can be complex because they depend on the timing and recording of mortgages, judgments, and other liens. If claimants dispute priority, a court may be required to determine proper distribution.

Typical steps to recover surplus funds in Connecticut

1. Confirm there are surplus proceeds. Obtain the sale record or the municipal tax collector’s report showing the sale price and a breakdown of amounts paid (taxes, interest, fees, costs). The town or city clerk or tax office can confirm whether proceeds exceeded secured claims.
2. Identify who holds the surplus. Often the municipality or the purchaser at the tax sale holds sale proceeds until distribution. Ask the town tax office or town clerk where the funds are being held and what their local procedure is for releasing them.
3. Prepare documentation to prove your claim. Typical documents include government ID; proof of ownership (deed, closing statement); mortgage or lien documents; bankruptcy or assignment records if applicable; and any correspondence about the tax sale. If you are a mortgagee, bring evidence of your recorded mortgage and any assignment records.
4. File a written claim with the municipality. Many Connecticut towns require claimants to submit a formal written claim to the tax collector or town clerk along with supporting documentation. Ask the municipal office which form or affidavit they require and whether there is a deadline to file a claim.
5. If the municipality cannot or will not release funds, consider court action. If claimants dispute distribution or the town refuses to release funds, an interested party can bring an action in Connecticut Superior Court asking the court to determine entitlement and order distribution of surplus proceeds. The court can resolve conflicts of priority and order the town or sale purchaser to pay out the funds to the rightful parties.
6. Receive payment or judgment. Once the municipality or court determines entitlement, the surplus is paid to claimants in the order determined. If a court orders payment and a party still refuses to comply, enforcement measures like execution on the judgment may be necessary.

Important practical points for claimants

• Act promptly. Municipal offices and courts may have time limits or local procedures; delays can complicate recovery.
• Keep thorough records of ownership, lien documentation, communications with the town, and any sale paperwork.
• If multiple claimants exist, be prepared for litigation to resolve priority and entitlement.
• In some cases, the purchaser at a tax sale may record an instrument that affects title; consult the town’s file and recorded documents to see how the sale was finalized.

Where to look in Connecticut law and government resources

Connecticut statutes and municipal procedures govern tax sales and distributions. For statutory background, see Connecticut General Statutes, Title 12 (Taxation): https://www.cga.ct.gov/current/title_12.htm. For court procedures or to locate forms and local court filing instructions, use the Connecticut Judicial Branch: https://www.jud.ct.gov/. For town-specific practice, contact the municipal tax collector or town clerk.

When to consult an attorney

If the surplus is substantial, if multiple creditors claim the funds, if deadlines are unclear, or if the town refuses to release funds despite what you believe are valid claims, consult a Connecticut attorney experienced in municipal tax sales or real property litigation. An attorney can file a court action to protect your rights and help assemble the correct documentation and pleadings.

Disclaimer

This information is educational only and is not legal advice. Laws and procedures change, and application to any specific situation can vary. Consult a licensed Connecticut attorney for legal advice about recovering surplus funds after a tax sale.

Helpful Hints

• Contact the town tax collector or town clerk first; they can tell you whether the town holds surplus funds and what their local claim form requires.
• Gather proof of ownership and lien priority early (deeds, mortgage recordings, assignments, bankruptcy records).
• Ask the municipality for a written accounting of the sale proceeds showing what was paid out and what remains.
• If multiple parties claim funds, be prepared to negotiate or litigate—priority disputes commonly require a judge’s decision.
• Keep copies of all filings, receipts, and communications. Municipal offices sometimes change personnel—documentation speeds resolution.
• Consider a limited-scope engagement with a lawyer (document review or a single court filing) if full representation is not needed.
• Check Title 12 of the Connecticut General Statutes for state-level rules that may affect the process: https://www.cga.ct.gov/current/title_12.htm.