Recovering Surplus Funds After a Tax Sale in Louisiana — FAQ

Disclaimer: This is general information only and not legal advice. I am not a lawyer. For advice about your specific case, consult a Louisiana attorney experienced in tax-sale and property law.

Detailed answer — What to expect and the steps to recover surplus funds

When a property in Louisiana is sold at a tax sale for unpaid ad valorem taxes, the sale sometimes brings in more money than is needed to pay the delinquent taxes, interest, penalties, costs, and the purchaser’s expenses. The excess amount is called the surplus. Louisiana law provides mechanisms for returning that surplus to persons with valid claims — most commonly the former property owner or secured creditors (mortgagees, judgment lienholders) whose liens survived the sale.

1. Confirm that a surplus exists

Start by contacting the office that conducted the tax sale — typically the parish tax collector or the sheriff (depending on the parish procedure). Ask for:

• The final sale report identifying the sale price and the amounts applied to taxes, penalties, interest, and sale costs;
• The recorded certificate or title issued to the purchaser;
• Any published notices about surplus claims and the amount of the surplus.

2. Determine who has priority to the surplus

Priority for surplus distribution generally follows legal lien priorities. Typical priorities include:

• Claims by the former owner for return of equity;
• Recorded mortgagees or other valid lienholders that held liens that survived the tax sale;
• Other judgment creditors or claimants with recorded liens or statutory rights.

The exact priority and whether a lien survived the tax sale depend on the type of lien and how Louisiana law treats it. For a full discussion of tax sales and related procedures, consult Louisiana tax statutes and your parish’s procedures (see links below).

3. File a written claim for the surplus with the official custodian

Most parishes require claimants to submit a written claim to the clerk of court, sheriff, or tax collector who is holding the surplus. A proper claim usually includes:

• A clear statement that you claim the surplus funds (identify the property address and parcel number);
• Proof of your identity and interest — for an owner: recorded deed title or other proof of ownership; for a mortgagee: recorded mortgage and proof of outstanding balance; for lienholders: recorded judgment or lien certificate;
• Any court orders or assignments relevant to the claim;
• Contact information and a request for release of funds or for the claim to be set for judicial determination if disputed.

4. Provide documentation and request disbursement

When you submit your claim, include certified copies of recorded documents and any payoff figures (for creditors). The sheriff or clerk may have a local form or instructions. If the clerk or sheriff accepts the claim and no one objects, the office will typically cut a check to the entitled claimant after verifying documentation.

5. Handling competing claims and disputes

If multiple parties claim the same surplus, or if the custodian questions entitlement, the custodian will normally hold the funds and require the competing claimants to resolve priority in court. Typical next steps include:

• Filing a petition in the appropriate civil district/parish court to determine rights to the surplus;
• Requesting a declaratory judgment or petitory/possessory-type procedure depending on the nature of the dispute;
• Asking the court to appoint the proper distribution or to issue an order directing the custodian to release funds to the successful claimant.

6. Deadlines and prescription

Time limits apply to many claims related to tax sales and surplus funds. Some claims must be asserted quickly; others may be subject to longer prescription periods for recovery of money. If you wait too long you risk losing the right to claim the surplus. Because deadlines vary by the nature of the claim and the statutory scheme, contact the parish office immediately and consult a lawyer promptly.

7. If the custodian refuses to release an undisputed surplus

If the clerk or sheriff refuses to pay a clearly entitled claimant, you may need a lawyer to file a lawsuit seeking an order compelling payment (for example, an action to enforce a right to funds in the custodian’s hands). An attorney can also seek damages or fees if the refusal lacks legal basis.

Key Louisiana statute references and where to look

Louisiana’s tax sale procedures and the treatment of surplus funds are found in the Louisiana Revised Statutes governing taxation and in local parish procedures. For primary statutory materials and official text, search the Louisiana Legislature’s website. Useful starting points include:

• Title 47 — Revenue and Taxation (search the statutes on the Louisiana Legislature site): https://legis.la.gov/
• Search results for relevant tax-sale statutes (enter terms like “tax sale,” “tax sale surplus,” or the parish name on the legislature site): https://legis.la.gov/legis/LawSearchResults.aspx?search=tax%20sale

Because statute sections and procedural rules differ depending on the exact sale type and parish practice, review the statutes and local rules that apply to your parish and sale.

Helpful Hints

• Contact the parish tax collector or sheriff immediately after a sale to learn if a surplus exists and how they handle claims.
• Collect and organize proof of ownership or lien rights before submitting a claim (recorded deed, mortgage, payoff statement, recent tax receipts, ID).
• Keep copies of all correspondence, certified mail receipts, and filings with the clerk or sheriff.
• If you are a creditor or mortgagee, confirm whether your lien survived the tax sale and whether you must provide specific documentation to the custodian.
• Act promptly — legal deadlines and prescription (statute of limitations) can bar late claims.
• If multiple parties claim the same funds, expect a court proceeding. Get legal help early to protect your priority.
• Ask the parish office whether they have a local claim form and whether they accept electronic filings or require originals.
• If you receive notice of a surplus but cannot retrieve the funds yourself, consider hiring a Louisiana attorney who handles tax sales and property disputes.

When to talk to an attorney

Talk to an attorney if:

• There are competing claims to the surplus;
• The custodian refuses to release funds despite documents showing your entitlement;
• You are a creditor unsure whether your lien survived the sale;
• You need help with the paperwork, evidence, or filing a court action to obtain the surplus.

Because tax-sale law and surplus distribution can be technical and time-sensitive, an attorney can evaluate your documents, explain applicable Louisiana law, and represent you in court if necessary.