Detailed Answer
This FAQ explains how surplus (excess) funds are handled when real property in Utah is sold at a tax sale, who can claim those funds, and the common steps to recover them. This is a general overview only and not legal advice. For binding guidance, consult an attorney or the county treasurer where the sale occurred.
What are “surplus funds” after a tax sale?
When a county sells property to satisfy unpaid property taxes, the sale proceeds first pay the delinquent taxes, interest, penalties, and costs related to the sale. Any money left over after payment of those items is called surplus (or excess) funds. Those funds do not belong to the tax purchaser; they belong to prior-interest holders (typically the former owner, then holders of recorded liens in order of priority).
Who can claim surplus funds?
Priority of claims generally follows recorded interests in the property. Typical claimants, in priority order, include:
- The former recorded owner(s) of record at the time of the sale.
- Senior lienholders (for example, mortgages or deeds of trust recorded before the tax lien) to the extent their interests remain after taxes are satisfied.
- Junior lienholders (judgment liens, subsequent mortgages) if any balance remains after higher-priority claimants are paid.
How do I locate and verify surplus funds exist?
- Contact the county treasurer where the property was located. Ask for the sale accounting and whether any surplus was recorded after the tax sale.
- Obtain the sale report or certificate of sale and a detailed accounting showing taxes, penalties, fees, and the surplus amount (if any).
- Check the county recorder’s records to verify ownership and any recorded liens before the sale.
How do I claim the surplus funds?
Although procedures can vary somewhat by county, the usual steps are:
- Prepare a written claim to the county treasurer. Many counties provide a form or instructions. The claim typically must include:
- Claimant name and contact information.
- Proof of identity (government ID).
- Proof of the claimant’s interest in the property (deed, mortgage, recorded assignment, judgment lien, or other record).
- Documentation linking the claimant to the former owner or to the recorded lien (chain of title, assignments, payoff statements).
- Submit the claim and supporting documents to the county treasurer’s office. Some counties require notarized documents or certified copies.
- The treasurer will review the claim. If the claim is clear and undisputed, the county typically issues payment to the valid claimant (after any required administrative processing).
- If multiple parties claim the same funds or the county questions priority, the county may require claimants to resolve the dispute in court before paying out the surplus.
What happens if multiple parties claim the funds or there is a dispute?
When competing claims arise, counties commonly lock the funds and require a judicial determination of entitlement. Claimants may need to file a civil action in the appropriate Utah district court asking the court to determine the distribution of the surplus. The county will typically require a final court order before releasing funds to the winning claimant(s).
Are there deadlines to file a claim?
Deadlines and statutes of limitations vary by jurisdiction and by the type of claim. Because timing can affect whether funds are paid, transferred to the state as unclaimed property, or become otherwise unavailable, act promptly. Review the applicable Utah statutes and contact the county treasurer to confirm any local filing deadlines.
For statutory language and details about tax sales and collection powers, see Utah Code, Title 59 (Taxation). A useful reference is the Utah Code chapter on collection and tax sale provisions: Utah Code – Title 59, Chapter 2.
What if the surplus goes unclaimed?
If surplus funds remain unclaimed for the period required by law or local procedure, counties sometimes transfer unclaimed surplus funds to the state unclaimed property program or retain them under statutory rules. To check whether funds have been turned over as unclaimed property, search Utah’s unclaimed property database or contact the Utah State Treasurer/Comptroller: Utah Unclaimed Property.
Common practical timelines and costs
- Start immediately: contacting the county treasurer and assembling proof can speed recovery.
- Expect time for verification: the treasurer may take weeks to review claims and verify recorded interests.
- Possible fees and attorney costs: if litigation is necessary, attorney fees and court costs will reduce net recovery unless a court orders otherwise.
When should I get a lawyer?
If the surplus is substantial, if multiple claimants dispute priority, if claims involve assignments or complex title issues, or if the county requires a court order, consult a Utah attorney who handles tax sale and real property matters. An attorney can help collect and present documentation, file necessary court actions, and protect your rights.
Key Utah resources
- Utah Code — taxation and tax sale provisions: https://le.utah.gov/xcode/Title59/Chapter2/59-2.html
- Utah Unclaimed Property: https://comptroller.utah.gov/unclaimed-property/
- Local county treasurer’s office (contact the treasurer where the property was located for forms and local procedures).
Short checklist to start recovery
- Contact the county treasurer — request the sale accounting and surplus status.
- Gather proof of identity and proof of your interest (deed, mortgage, assignment, judgment, etc.).
- Submit a written claim with required documentation to the treasurer.
- If denied or contested, consult an attorney about filing a court action to establish entitlement.
Helpful Hints
- Act quickly. The longer you wait, the greater the risk funds will be transferred to unclaimed property or become harder to obtain.
- Get certified copies of recorded documents (deeds, mortgages, assignments, judgments) to support your claim.
- Keep careful records of any communications with the county treasurer and the tax sale purchaser.
- If you are a lienholder who purchased your lien/assignment from another party, keep the assignment chain and payment proofs handy.
- If the county requires a court order to release funds, do not expect the county to resolve competing claims—be prepared for litigation or mediation.
- Even if you are the former owner, a mortgage or other lienholder may have priority — check the recorded priority chain before assuming entitlement.
- Use the Utah unclaimed property search if you cannot find the surplus with the county; sometimes counties remit unclaimed excesses to the state program.
Disclaimer: This information is educational only and not legal advice. Laws and procedures change. For advice about a specific situation, consult a licensed Utah attorney or the county treasurer where the property was sold.