Detailed Answer — Recovering Surplus Proceeds After a Missouri Tax Sale
Short overview: When a property is sold at a Missouri tax sale, the sale proceeds first pay the taxes, penalties, interest, and the costs of the sale. If any money remains after those charges and after satisfying superior liens required by law, that remaining money is called the “surplus” or “overage.” A former owner or another party with a valid claim (for example, a junior lienholder) may be entitled to recover those surplus funds. This article explains the typical steps, the parties involved, and where to look in Missouri law.
Disclaimer: This is general information, not legal advice. Consult a Missouri attorney about your specific situation.
1. Who can claim surplus funds?
Potential claimants typically include:
- The former record owner of the property (or that owner’s heirs or successors).
- Mortgagees, lienholders, or judgment creditors who have recorded interests that may take priority under law.
- Any other person who can show a legal right to the money (for example, assignees of the owner’s interest).
2. Where to start: confirm whether a surplus exists
- Contact the county collector or county treasurer where the property is located. Counties maintain records of tax sales and distribution of sale proceeds.
- Request the tax sale report or the certificate of distribution for that sale. That document will show the amount realized at sale and how funds were applied.
- Ask whether any surplus was deposited or retained by the county and whether the county maintains a formal claims process for surplus funds.
3. Typical step-by-step process to recover surplus funds in Missouri
While local practice can vary, the common steps are:
- Gather proof of entitlement. Useful documents include a recorded deed or chain of title showing you are the former owner, IDs, affidavits of heirship (if applicable), mortgage or lien documents, and any court orders that support your claim.
- File a written claim with the county. Many counties require an application or affidavit claiming the surplus; some counties post specific forms and instructions on the collector’s or treasurer’s website.
- Provide supporting documentation and identification. Counties typically require proof to verify your claim and to check for competing claims from lienholders or other claimants.
- If competing claims exist, the county may hold funds pending resolution. The county may follow a statutory order of distribution and may notify other claimants.
- If the county rejects a claim or if multiple claimants dispute entitlement, you can file a civil action in the circuit court to establish your right to the funds. The court will decide competing claims and order distribution if appropriate.
- Once entitlement is established (by agreement or court order), the county will release the surplus to the entitled party, often after completing administrative release forms and identity verification.
4. Practical considerations and common issues
- Priority of claims: Sale proceeds usually first satisfy the taxes, penalties, interest, and sale costs. After those, certain liens or costs with legal priority will be paid before any surplus goes to a former owner. That order and which liens qualify can affect who actually gets the surplus.
- Competing claimants: Mortgagees, judgment lien creditors, or assignees may assert claims. You may need a court ruling to resolve disputes.
- Timing and delays: Counties may retain surplus funds while notifying claimants or while legal disputes are resolved. Be persistent and track deadlines for filing claims or lawsuits.
- Fees and costs: Expect administrative fees, and if you need litigation, court costs and attorney fees may apply.
- Unknown or missing owners: If the former owner cannot be located, counties may require a longer process (publication, bond, or court action) to protect the county from future claims.
5. Where Missouri law discusses tax sales and distributions
Missouri’s laws on tax collection and tax sales appear in the Missouri Revised Statutes (Chapter 140 and related provisions). For statutory text and updates, review the state code on the Missouri Revisor of Statutes website: Missouri Revised Statutes — Chapter 140 (Taxation; delinquent taxes and tax sales). For court procedures if you must file suit, see the Missouri Courts website: Missouri Courts.
6. When you should consider hiring an attorney
Consider hiring a Missouri attorney if:
- Multiple parties claim the surplus and a dispute is likely.
- The county denies your administrative claim and you need to file suit to recover the funds.
- The legal issues involve complicated priority questions (for example, multiple mortgages or tax liens).
- You cannot locate required records or you are unsure how to prove entitlement.
Helpful Links
- Missouri Revised Statutes — Chapter 140 (tax collection and sales)
- Missouri Courts (filing a civil action in circuit court)
Helpful Hints
- Contact the county collector or treasurer first. They can tell you whether a surplus exists and the county’s claim procedures.
- Do a title search. A short title report helps identify other claimants and proves your interest in the property.
- Keep thorough records. Save tax sale notices, sale certificates, and all correspondence with county officials.
- Act promptly. Although exact deadlines vary, prompt action reduces the chance that the county will distribute or forfeit funds or that other claimants will gain priority.
- Prepare to show identity and authority. Counties require reliable identification and proof that you are authorized to claim the funds (owner, heir, assignee, etc.).
- If the county’s process is unclear, request written instructions and the specific statute or rule the county follows.
- If multiple lienholders exist, consider mediation or settlement discussions before litigating—litigation can be costly and time-consuming.
If you want, provide the county name and any documents you have (sale date, certificate numbers, recorded instruments), and I can suggest the next concrete steps and typical county contact points to check.