Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your situation.
Detailed Answer
When a residential or commercial property in Pennsylvania sells at a judicial foreclosure sale, the clerk of courts may hold surplus funds if the sale price exceeds the total amount owed (mortgage, interest, taxes, fees). Under Pennsylvania Rules of Civil Procedure Rule 3129.1 and 42 Pa.C.S. § 8122, eligible parties—typically the former owner or junior lienholders—may petition the court to claim these surplus proceeds. Below are the typical steps:
- Confirm Existence of Surplus. After the sheriff’s sale, review the court’s distribution schedule. The clerk’s office will list all amounts paid out and any remaining balance. If the sale produced a surplus, the clerk holds it pending further order.
- Determine Eligibility. Only those with a legal or equitable interest in the property at the time of sale (former mortgagor, junior lienholders) may petition. You must show why you have priority over others. See 42 Pa.C.S. § 8122 (Distribution of Proceeds of Judicial Sale).
- Gather Documentation. Collect proof of your interest: deed, mortgage or lien documents, payoff statements, court docket entries, and identification (driver’s license or passport).
- Prepare the Petition. Under Pa. R. Civ. P. 3129.1, your petition must include:
- The court name and docket number of the foreclosure case.
- A description of the property sold.
- Date of the sheriff’s sale and amount of sale price.
- The amount held as surplus and the names/addresses of all interested parties.
- A statement of your claim and priority basis.
- A verification (signature under penalty of perjury).
For the full rule, see Pa. R. Civ. P. 3129.1.
- File the Petition. Submit the original petition and copies to the clerk of the Court of Common Pleas where the foreclosure occurred. Pay any filing fees (varies by county, often under $200).
- Serve Interested Parties. Serve a copy on all parties listed in the foreclosure complaint—mortgagee, other lienholders, and the sheriff. Service must comply with Pa. R. Civ. P. 3129.1.
- Wait for Objections or Default. Pennsylvania law generally allows 20 days for objections. If no one contests your claim, the court may grant your petition by default.
- Attend the Hearing (if required). If an interested party objects, the court will schedule a hearing. Be prepared to present evidence of your interest and priority.
- Obtain Court Order. Once the court approves your petition, it issues an order directing the clerk to disburse the surplus funds to you.
- Collect Funds. Present the court order to the clerk of courts to receive a check for the surplus amount. Funds typically disburse within a few days to weeks.
Helpful Hints
- Start early: The petition deadline is typically within three months after the clerk issues the distribution schedule.
- Check county-specific practices: Fee schedules and local forms vary by county.
- Keep organized records: Clear documentation strengthens priority claims.
- Use certified mail for service: Obtain return receipts as proof.
- Consult an attorney if multiple parties claim priority: Disputes can complicate the timeline.
- Track statute changes: Rules and fees may update periodically.