Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Detailed Answer
In Washington, nonjudicial foreclosures may generate surplus funds when the sale price exceeds the outstanding debt, fees, and costs. Under RCW 61.24.125, the trustee must deposit any surplus with the clerk of the superior court in the county where the property is located within 14 days of the trustee’s sale. To recover these funds, an interested party—typically the former owner or a junior lienholder—must file a petition for disbursement in the same superior court.
Step 1: Confirm Existence of Surplus Funds
Obtain a copy of the trustee’s report of sale and account. Verify that the sale generated surplus proceeds after satisfying the deed of trust balance, accrued interest, trustee’s fees, and any junior liens. You can request a certified copy from the county recorder or superior court clerk’s office.
Step 2: Prepare the Petition for Disbursement
Draft a written petition addressed to the superior court in which the trustee’s sale occurred. The petition should include:
- Court name, case number, and title of the foreclosure action
- Identification of the trustee’s sale date and amount of surplus funds held by the clerk
- Your name, address, and relationship to the property (e.g., former owner, lienholder)
- A statement of the legal basis for your claim under RCW 61.24.125(3) (view statute)
- A certification that you have not previously received disbursement of these funds
- A proposed order directing disbursement of the surplus to you
Step 3: File the Petition and Pay Fees
Submit the petition and proposed order to the clerk of the superior court where the foreclosure was recorded. You must pay the standard civil filing fee (check the Washington Courts Fee Schedule). Request a hearing date or indicate that the matter may be decided on the pleadings, per local court rules.
Step 4: Serve Notice on Interested Parties
Serve a copy of the petition and notice of hearing (if set) on the trustee, the foreclosing beneficiary (lender), and any junior lienholders. Service must comply with Washington Civil Rule 5.2 and local county procedures. Keep proof of service on file with the court.
Step 5: Attend Hearing (If Required)
If the court schedules a hearing, appear on the date and present evidence of your entitlement (e.g., loan payoff statements, lien documents). Opposing parties may object, but if you demonstrate a superior claim under RCW 61.24.125, the court will sign your proposed order.
Step 6: Obtain Court Order and Collect Funds
Once the judge signs the order, file it with the clerk. The clerk will then transmit the order to the county treasurer or appropriate disbursing officer. Present a certified copy of the order and valid identification to receive the surplus funds.
Helpful Hints
- Act promptly: You generally have one year from the sale date to claim surplus funds under RCW 61.24.125(3).
- Verify amounts: Confirm the exact surplus balance with the court clerk before filing.
- Use the correct court: File in the superior court of the county where the property is located.
- Check local rules: Each county may have specific filing or service requirements.
- Consider legal help: An attorney familiar with Washington foreclosure law can streamline the process.