Recovering Foreclosure Surplus Funds in Nevada: Step-by-Step FAQ

Short answer: If a trustee’s sale produced money above what was owed, you can ask the Nevada district court to release those surplus funds by filing a special proceeding (a petition) asking the court to determine who is entitled to the surplus and order distribution. Act quickly, gather documents, and give notice to everyone who might have a claim.

Disclaimer

This article explains general Nevada law and common practice. It is educational only and is not legal advice. For advice about your facts, consult a licensed Nevada attorney.

Relevant Nevada statutes and rules

Foreclosure and trustee-sale provisions (see Nevada Revised Statutes, Chapter 107): NRS Chapter 107.
General procedure for civil actions and special proceedings: NRS Chapter 40 and the Nevada Rules of Civil Procedure (consult local court rules).
If the sale involved homeowners’ association enforcement, see: NRS Chapter 116.

Common scenario (hypothetical)

Suppose a Nevada property sold at a trustee sale for $200,000. The lender’s owed balance plus sale costs totaled $175,000. After paying obligations and sale costs, $25,000 remained. That leftover money is the “surplus” (sometimes called overage). The trustee or the trustee’s agent often will deposit that surplus with the county clerk or hold it pending claims. If you are the former owner or a junior lienholder who believes you are entitled to the $25,000, you must start a special proceeding in district court asking the court to determine entitlement and release the funds.

Step-by-step: How to file a special proceeding notice to recover surplus funds in Nevada

Confirm there is a surplus and where it is held.
Check the trustee’s deed, trustee’s sale notice, and trustee’s accounting. Ask the trustee or trustee’s agent whether surplus proceeds exist and whether they were paid to the county clerk or retained. Also search county court clerk records for any deposit or case number.
Identify interested parties and possible competing claims.
Potential claimants include the former owner(s), junior lienholders (second mortgages, judgment creditors), taxing authorities, homeowners’ association liens, and the foreclosing beneficiary. The court will expect you to name and notify all parties who may claim the money.
Gather supporting documents.
Typical exhibits you will attach to the petition include: the deed of trust, the trustee’s deed showing the sale, the trustee’s accounting or sale statement showing the surplus amount, payoff letters, payoff statements for junior liens, any recorded releases or assignments, proof of identity and ownership (deed), and correspondence with the trustee or clerk. Organized documentation strengthens your claim.
Prepare the petition (special proceeding) for the district court.
The petition should:
- Ask the court to determine who is entitled to the surplus funds and to order distribution.
- State the facts (sale date, sale price, accounting showing surplus, where funds are held).
- Name all known interested parties and their addresses.
- Attach supporting exhibits (trustee’s deed, accounting, documents proving your claim).
- Include a proposed order for the judge to sign directing distribution of the funds to the rightful claimant(s).
Check the local district court’s filing requirements and any local form for claiming surplus funds. Some counties provide specific forms or instructions at the county clerk’s or district court’s website.
File the petition and pay filing fees.
File in the district court in the county where the property is located. Pay the court’s filing fee or apply for a fee waiver if you qualify. Keep stamped copies of filed papers and get the court-assigned case number.
Serve notice on all interested parties.
Serve the petition, exhibits, and any hearing notice on every named party according to Nevada service rules (personal service, registered agent, or as permitted by statute). If the surplus already sits with the county clerk, also provide a copy to the clerk. Proper service is essential; failure to serve can delay or doom the proceeding.
Request a hearing and respond to objections.
Ask the court to set a hearing. Interested parties may object or file competing claims. At the hearing, present your evidence showing your entitlement (priority of lien, payoff calculations, releases). The court will weigh competing claims and issue an order directing distribution.
Obtain and enforce the court’s distribution order.
After the judge signs the order, present it to the county clerk or the holder of funds so they will disburse the money. If the funds were not deposited with the clerk, the order will direct the trustee or other holder to pay you. If the holder refuses, you may need additional enforcement steps (writ of execution or contempt), which a lawyer can handle.

Timing and practical notes

Act promptly. Delays can give others time to file competing claims.
Tax liens, IRS liens, or HOA liens may have priority and reduce or eliminate surplus available to the former owner.
Some counties maintain specific local procedures or forms for surplus claims. Check the district court or county clerk website for the county where the property sits.
Even when you prevail, attorneys’ fees and court costs can reduce net recovery unless the court awards fees.

When to consider hiring a Nevada attorney

The other side files a competing claim or the funds exceed a modest amount.
Priority issues appear complex (multiple judgment lienholders, tax liens, HOA claims, or assignments of mortgage).
You need help drafting the petition, serving parties correctly, or enforcing a court order.

Helpful hints

Start by contacting the trustee and county clerk to confirm whether surplus funds exist and where they are held.
Get certified copies of the trustee’s deed, trustee’s sale notice, and the trustee accounting—these are critical exhibits.
Prepare a short timeline of events (loan dates, default, notices, sale date, amounts) to include with your petition.
Check county records for recorded releases, assignments, or liens that affect priority.
Keep originals and organized copies of all documents; the court and other parties will expect evidence, not just assertions.
If the claim is small, weigh the likely recovery against filing costs and attorney fees before litigating.

Where to get more information

Nevada Revised Statutes, Chapter 107 (foreclosure by trustee): https://www.leg.state.nv.us/NRS/NRS-107.html.
Nevada Revised Statutes, Chapter 40 (actions and special proceedings): https://www.leg.state.nv.us/NRS/NRS-40.html.
Contact the district court clerk in the county where the property is located for local filing procedures and forms.

If you would like, I can:

Provide a sample petition outline you can adapt for your facts.
List typical documents to attach in checklist form.
Help find the district court clerk contact for the county where the property is located.

Remember: this is general information only and not legal advice. Consult a licensed Nevada attorney about your specific situation.