Detailed Answer: How to claim surplus funds from a tax foreclosure sale in New Jersey

Short answer: If a tax foreclosure sale of your mother’s house produced money in excess of the taxes, fees, and lien claims (a “surplus” or “overage”), you may be entitled to that money as the former owner or as an heir. In New Jersey the process generally requires identifying the foreclosure case and county, contacting the sheriff or tax office that ran the sale, documenting your legal right to the funds (ownership, heirs, executor), and filing the required claim or application. If the owner is deceased, you will usually need probate documents (letters testamentary or administration) or proof of intestacy. Competing lienholders or unpaid judgments can complicate recovery. Because procedures and time limits vary by county and circumstances, consider getting help from a lawyer experienced in tax-foreclosure/surplus claims or an estate attorney.

What are “surplus funds”?

When a county or municipal tax sale or sheriff’s foreclosure sells property and the sale price exceeds the total amount owed for taxes, interest, municipal costs, and lien claims (including any mortgage, municipal liens, and sale costs), the excess is called surplus funds or overage. New Jersey law provides that surplus funds are to be distributed to persons with legal priority—typically the former owner (or their estate) first, then certain lienholders or judgment creditors, depending on statutory priority.

Where to start: gather basic information

Identify the county where the property is located. Tax foreclosures and sheriff’s sales are handled at the county level.
Find the tax-foreclosure case number or the deed/purchase information from the sheriff’s sale. You can usually find this by searching the county clerk or sheriff’s online records or by contacting the county tax office.
Confirm whether surplus funds exist and the amount. The county sheriff or tax collector can confirm whether a surplus was generated and whether it has already been claimed.

Who can claim the surplus?

Priority typically runs to:

The former owner (or their estate/heirs).
Mortgagees and lienholders who have recorded liens before the tax sale, in order of priority.
Other claimants with court-ordered or statutory priority (varies by circumstance).

If your mother is alive and listed as owner, she (or you acting with a valid power of attorney) is usually the first claimant. If she has died, an authorized personal representative (executor or administrator) or an heir who has obtained the necessary probate letters or appointment documents will generally need to claim the funds on behalf of her estate.

Typical steps to claim surplus funds in New Jersey

Procedures differ slightly by county, but the basic steps are:

Confirm the surplus and county procedure. Call the county sheriff’s office, county tax board, or county clerk where the sale occurred. Ask whether a surplus exists, whether a claim has been filed, and what forms or court filings the county requires.
Gather required documents. Common documents counties ask for include:
- Photo ID for claimant.
- Proof of ownership (deed, tax records) showing your mother as the former owner.
- If the owner is deceased: death certificate and probate documents (letters testamentary, letters of administration, or a small-claims estate release depending on the county and amount).
- If you are acting for the owner: a valid power of attorney or court appointment documentation.
- A signed affidavit or claim form describing your entitlement.
File the claim or application. Some counties provide a standard surplus-claim form or require a submittal to the Superior Court (Chancery Division) if funds are under court control. Follow the county’s directions precisely. Keep copies of everything and get a receipt or case number.
Respond to competing claims. If mortgagees, judgment creditors, or other lienholders file claims, the county or court will determine priorities. This can require documentation from lienholders and may trigger a court hearing where a judge divides the surplus according to statutory priority.
Obtain the funds. Once the county or court approves the claim, they will disburse funds to the approved claimant(s). Disbursement may be by county check or other method; expect processing time.

Special situations and things to watch for

If your mother is deceased: the county will generally not pay surplus directly to a family member without probate or letters from the Surrogate’s Court authorizing distribution. Small-claims or summary probate procedures may apply for modest amounts, depending on county rules.
If there are outstanding mortgages, municipal liens, or judgments recorded before the tax sale, they may be paid from the surplus before you receive anything.
If someone else (for example, an investor who bought the tax certificate) claims the surplus, you may need a court motion to resolve competing claims.
Time limits and filing rules vary by county. Don’t assume funds will remain available indefinitely—start promptly.

Where to find the law and county rules

New Jersey tax-foreclosure and tax-sale laws are found in Title 54 of the New Jersey Statutes (Taxation). For the official state statutes, see the New Jersey Legislature website: https://www.njleg.state.nj.us/ (search for “Title 54” or terms like “tax sale” or “tax foreclosure”). Counties often publish their own instructions and forms—check the sheriff or county tax collector pages for the county where the property was located.

When to consult an attorney

Consider hiring an attorney if:

There are competing claims from mortgage holders or creditors.
The estate is in probate and distribution of the surplus is contested.
You are unsure how to obtain probate letters or whether a small-claims probate route applies.
The county requires a court application or hearing to release funds.

Practical example (hypothetical)

Suppose your mother owned a home in Burlington County that sold at sheriff’s tax sale for $150,000. The county calculates that taxes, interest, municipal costs, and prior mortgage claims total $120,000. That leaves $30,000 in surplus. You discover the sale information at the Burlington County Sheriff’s Office, confirm the $30,000 surplus, and learn nobody has claimed it yet. If your mother is alive, she signs an affidavit and provides ID and a deed copy; the county pays her directly. If your mother has died, you will need a death certificate and either probate letters showing you are executor or, for small amounts, county-accepted estate paperwork—then the county will distribute funds to the estate.

Disclaimer

This article is for general informational purposes only and is not legal advice. I am not a lawyer. Laws and county procedures change. For advice specific to your situation, contact a licensed New Jersey attorney experienced in tax-foreclosure, real estate, or probate matters.

Helpful Hints

Start at the county level: county sheriff, county tax collector, or county clerk—these offices usually handle tax-foreclosure records and surplus funds.
Gather proof of ownership and identity first (deed, tax records, driver’s license). If the owner died, get the death certificate and probate papers.
Ask the county whether they have a standard surplus-claim form and whether they will accept a small-estate summary or require formal probate papers.
Check recorded liens before assuming you will receive the full surplus amount—mortgages and older liens often take priority.
Keep a paper and electronic file of all communications, receipts, claim forms, and case numbers.
If you find a competing claimant, consider hiring an attorney—court resolution can be complex and time-sensitive.
Use the New Jersey Legislature site (https://www.njleg.state.nj.us/) to look up Title 54 (Taxation) for statutory language related to tax sales and foreclosures.
If you’re unsure which county handled the sale, search county public records or ask the municipal tax collector where the property was located.