Surplus Funds After a Foreclosure Sale in Virginia
Detailed Answer
After a foreclosure sale in Virginia, a sale price exceeding the secured debt and associated costs creates surplus funds. These excess proceeds belong to the former owner or other entitled parties, such as junior lienholders. Under Virginia law, trustees handling nonjudicial sales must apply proceeds in order: expenses, senior debt, subordinate liens, then any remainder to the grantor. See Va. Code § 55.1-3238.
To determine if surplus funds remain, follow these steps:
- Identify the foreclosure sale details: property address, date of sale, trustee’s name, and deed of trust recording information.
- Access the Circuit Court Clerk’s office where the property is located. Search land records for the trustee’s deed of sale, certificate of sale, and the trustee’s account statement. For nonjudicial sales, trustees must record a statement of account under § 55.1-3238.
- If the sale was under a court order (judicial foreclosure), search the case file for a report of sale and any orders distributing surplus proceeds. Judicial sales fall under Va. Code § 8.01-127.
- Review filings for a surplus distribution notice. Trustees and sheriffs must serve notice to interested parties and publish notices in local newspapers. Court records or trustee files will reveal any unclaimed excess proceeds.
- If a surplus exists, file a claim or petition for delivery of surplus proceeds with the clerk. Provide proof of your interest—such as a recorded deed, lien instrument, or identification—to establish entitlement.
- Monitor the Virginia Treasury’s Unclaimed Property database at Virginia Unclaimed Property. Unclaimed surplus funds sometimes pass to state custody if not claimed within a statutory period.
By reviewing court and land records and consulting with the trustee or clerk, an interested party can confirm whether surplus funds remain and take steps to recover them.
Helpful Hints
- Gather complete foreclosure details: property address, sale date, trustee name, and recording references.
- Use the Circuit Court Clerk’s online portal or visit in person to access land and case records.
- Check public notices and local newspaper archives for trustee sale announcements.
- Keep records of all correspondence and filings when claiming surplus proceeds.
- Consider consulting an attorney if the trustee or clerk denies a surplus claim or if multiple parties assert entitlement.