Detailed Answer
Under South Carolina law, a surplus fund arises when a foreclosure sale yields more than the outstanding debt, interest, costs, and fees. The surplus belongs to the former property owner or other junior lienholders. You must petition the court to claim these funds. Below are the required steps:
1. Verify the Surplus Amount
Contact the county sheriff or trustee who conducted the sale. Request a certificate or statement verifying the sale price and amount due. This document confirms the surplus balance.
2. Prepare Your Petition
Draft a written petition in the county where the foreclosure sale occurred. Include:
- The case caption and foreclosure sale docket number
- Your name, current address, and status (mortgagor or lienholder)
- The property’s legal description
- Sale date and amount realized
- Amount claimed as surplus
- A statement that you have not previously received these funds
Cite SC Code §29-3-650 et seq. for foreclosure by advertisement: https://www.scstatehouse.gov/code/t29c003.php.
3. File the Petition
Submit the petition to the clerk of the circuit court in the county where the property lies. Pay the required filing fee (varies by county).
4. Serve Notice on Interested Parties
Under SC Rules of Civil Procedure Rule 4, serve the following with a copy of your petition:
- The foreclosure purchaser (usually the lender or its nominee)
- Any other lienholders of record
- Other persons known to claim interest
Arrange service by certified mail or sheriff’s deputy and file the return of service with the court.
5. Attend the Hearing
The court will schedule a hearing date. Present your certificate of surplus, a copy of the foreclosure deed, and any other supporting documents. The judge will determine priority and entitlement.
6. Obtain and Enforce the Court Order
If the judge grants your petition, the court will issue an order directing the clerk to disburse the funds. After entry of the order, you receive the surplus from the clerk’s office.
Statute of Limitations and Escheat
Under SC Code §15-1-40, you generally have three years to bring a civil action to recover personal property or funds. If no valid claim arises within one year of sale, the surplus may escheat to the county treasury. Consult county rules for local deadlines.
Disclaimer: This article provides general information and does not constitute legal advice. Consult a qualified attorney for advice about your situation.
Helpful Hints
- Obtain certified copies of all foreclosure documents early.
- Check the clerk’s calendar for hearing schedules and filing deadlines.
- Track service deadlines under the South Carolina Rules of Civil Procedure.
- Consider hiring an attorney to navigate complex lien priority issues.
- Keep copies of all filed papers and proof of service for your records.