Excess proceeds: money left over after a tax sale
Who can claim the money left after a tax sale, how, by when — and the rules against fee-charging recovery companies.
General information, not legal advice. Techoclaro is not a law firm, not the tax office and not connected to any taxing unit. For your situation, talk to free legal aid or a lawyer.
Where the money goes
The sale money pays the costs of the sale, court costs, and the taxes, penalties, interest and fees under the judgment. What is left is paid to the clerk of the court that ordered the sale.
[Tex. Tax Code § 34.02(b), (d)]
The clerk’s notice
If more than $25 is left, the clerk must mail the former owner a notice within 30 days of receiving it, with the amount and the text of the law. The clerk keeps the money for two years after the sale.
[Tex. Tax Code § 34.03(a)]
How to claim
File a petition in the court that ordered the sale, before the second anniversary of the sale; it may use the same cause number. Serve all parties at least 20 days before the hearing. Lienholders and later taxes are paid first; then former owners who were defendants, their heirs, or close relatives.
[Tex. Tax Code § 34.04(a)–(c)]
Recovery companies
No one who is not a lawyer may charge a fee to obtain excess proceeds for an owner. A lawyer’s fee is capped at 25% or $1,000, whichever is less. Anyone buying your claim must wait until the 36th day after the deposit, may not solicit you by phone or in person, and must pay at least 80% up front.
[Tex. Tax Code § 34.04(f), (i)]