How Nevada law treats survivorship claims when surplus funds remain after a foreclosure

Short answer: A recorded right of survivorship (for example, joint tenancy or a survivorship deed) can change who owns the property at the time of a foreclosure sale. If ownership fully vests in the surviving owner before the foreclosure sale, that surviving owner is the person who may claim any surplus funds. If ownership has not vested, or the sale occurred first, the estate or other recorded lienholders may have the stronger claim. Timing, the exact deed language, and Nevada foreclosure rules control who receives surplus funds.

Detailed answer — plain language explanation of the legal issues under Nevada law

What are “surplus funds”? After a trustee’s sale (a nonjudicial foreclosure under a deed of trust) or other foreclosure sale, the sale proceeds first pay the expenses of the sale and the foreclosing lien. If the sale brings in more money than is owed, the extra money is called the surplus (or excess) funds. Nevada law and practice determine who is entitled to that money.

Who can claim surplus funds? Priority generally follows the order of recorded liens and ownership:

Junior lienholders (recorded liens that are subordinate to the foreclosing lien) have a claim in order of priority.
If no lienholder claims the surplus, the former property owner (the grantor/trustor) is typically entitled to the remainder.

Where a death occurs and a deed contains a survivorship clause (for example, a deed conveying title “to A and B as joint tenants with right of survivorship” or a community property deed with survivorship language), the key question is: who owned the property when the foreclosure sale happened?

Rules that matter in Nevada:

If the co-owner died before the foreclosure sale and the survivorship language fully vested title in the surviving co-owner, the surviving co-owner owned the property at the time of the sale and normally is the person entitled to any surplus funds as the former owner.
If the co-owner died after the foreclosure sale, the title (and any potential claim to surplus funds) is treated according to who owned the property at the time of the sale — typically the deceased person’s estate or beneficiaries will need to press any claim against the surplus, subject to recorded liens and any extinguishment by the sale.
If the survivorship language is ambiguous, not properly executed or recorded, or if there are competing claims (for example, heirs, creditors, or other lienholders), the surplus may not be paid without a court order resolving who holds title.

Nevada statutes and practice provide the framework for foreclosure and distribution of sale proceeds. For details about foreclosure by deed of trust and trustee’s sales, review Nevada Revised Statutes Chapter 107. For foreclosures by homeowner associations, see Chapter 116. (These chapters contain Nevada’s procedural rules and will help you find specific statutory sections to apply to your situation.)

Helpful statute resources (Nevada Revised Statutes):

Typical steps to assert a survivorship-based claim to surplus funds in Nevada

Determine the date of the foreclosure sale and compare it to the date of death. Timing often decides who owned the property at the time of sale.
Obtain a certified copy of the recorded deed that created the survivorship, and obtain a certified copy of the decedent’s death certificate.
Check the county recorder’s office for recordings and the trustee’s sale record. Find whether any junior lienholders filed claims before the trustee distributed funds.
If you believe title vested in the survivor before the sale, present documentary proof (recorded deed, death certificate) to the trustee or to the official handling surplus funds. If the trustee refuses to release funds, you may need to file a petition in district court to determine entitlement.
If multiple people claim the surplus (heirs, a surviving joint tenant, or lienholders), the usual resolution is a court proceeding in Nevada’s district court that decides who legally owned the property at the time of sale and who is entitled to the excess proceeds.

Common factual scenarios (examples)

These short hypotheticals show how outcomes can change:

Person A and Person B hold title as joint tenants with right of survivorship. Person A dies one month before the trustee’s sale. Title vests in Person B before the sale. Person B is typically entitled to any surplus funds as the former owner.
Person A and Person B hold title as joint tenants. The trustee’s sale occurs. Two weeks later Person A dies. Because A still held an interest at the time of sale, A’s estate (or parties with recorded interests) may assert the surplus claim. The survivor’s claim is weaker in this timing situation.
Deed language is unclear or the survivorship was never recorded. Even if parties intended survivorship, Nevada courts and county records rely on recorded instruments. Lack of clear recorded language often requires a court to sort competing claims.

When you should consider going to court

If the trustee or county refuses to pay surplus funds to the person you believe is the rightful survivor, or if multiple people claim the funds, you often must file a court action (a petition to determine ownership or a claim for surplus proceeds) to get a judicial declaration before the funds will be distributed. Courts will examine the deed, recording history, date of death, and related documents to resolve the dispute.

Practical risks and things to watch for

Do not assume verbal statements or unsigned documents establish survivorship — recorded and properly executed deeds carry legal weight.
Survivorship rights can be defeated by liens or properly recorded instruments that predate the survivorship, depending on timing and priority.
If you make a false claim for surplus funds, you can face legal consequences if another person has the stronger legal claim.

Helpful Hints

Find and copy the recorded deed. Look for words like “joint tenants,” “right of survivorship,” or “with right of survivorship.”
Get a certified death certificate for the deceased owner. The exact date of death is often decisive.
Check the date of the foreclosure sale and get the trustee’s sale paperwork. The sale date versus the date of death matters.
Check for recorded junior liens or other recorded claims that might take priority over a former owner’s claim to surplus funds.
Contact the trustee or the entity holding the surplus with your documentation. If they refuse, be prepared to ask a Nevada district court to resolve the dispute.
Consider hiring a Nevada attorney experienced in real estate and foreclosure disputes when the amount involved is significant or when other parties contest the claim. A lawyer can file the correct petition and present evidence on title and timing.
Act promptly. Procedural deadlines and the practical availability of records can affect your ability to press a claim.

Where to look for more information: See Nevada’s statutes on foreclosure and conveyances for procedural rules and recorded-document priorities: NRS Chapter 107, NRS Chapter 116, and NRS Chapter 111. County recorder and clerk offices also maintain the sale records and records of any surplus fund holdings.

Disclaimer: This article explains general principles of Nevada law and common procedures. It is not legal advice and does not create an attorney-client relationship. For advice about a specific situation, consult a licensed Nevada attorney who can review your deed, the foreclosure records, and the facts in detail.