Excess Proceeds from Sale of Tax Defaulted Properties

Frequently Asked Questions

What are Excess Proceeds?

When property is sold at a tax sale the proceeds are used to pay the delinquent tax and assessment liens, fees and costs of the sale. If more than $150.00 in sale proceeds remain after the taxes are paid they are available for claim by Parties of Interest.

Who are Parties of Interest?

Parties of Interest are defined in California Revenue and Taxation Code Section 4675 as having a recorded ownership or lien holder interest in the property at the time of the property was sold at tax sale.

What documentation do Parties of Interest need to submit?

Sacramento County requires a claim form obtained from our office, a copy of the original recorded document establishing the lien or judgment, and a calculation of the total claim amount (for instance, if interest is being claimed please show the interest calculation and basis for the interest rate).

Is there a charge to file a claim?

There is no charge to file a Claim for Excess Proceeds in Sacramento County.

Can someone claim Excess Proceeds on my behalf?

A party of interest in the property that was sold at tax sale may assign (transfer or sell) his or her right to claim excess proceeds to someone else only with a dated, written document that explicitly states that the right to claim excess proceeds is being assigned, and only after each party to the proposed assignment has disclosed to each other party all facts relating to the value of the right that is being assigned. Any assignment that does not comply with these requirements shall have no effect.

Any person or entity who in any way acts on behalf of, or in place of, any party of interest with respect to filing a claim for excess proceeds shall submit proof with the claim that the amount of excess proceeds has been disclosed to the party of interest and that the party of interest has been advised of their right to claim excess proceeds on their own behalf at no charge.

If you prefer to have an agent file your claim for you, or if you should decide to sell/transfer your claim, an "Assignment" must be completed and submitted in addition to the Claim for Excess Proceeds.

When can claims be filed?

The law requires that a claim be filed within one year of the date of the Tax Collector's recording of the deed to the purchaser. By law, we cannot accept claims after one year from the recording date, nor can we begin the claim review process until one year has passed from the recording date. The Tax Collector will attempt to notify all known Parties of Interest who have a right to file a claim for Excess proceeds.

How is the priority of claims determined?

California Revenue and Taxation Code Section 4675 defines parties of interest and the priority for paying on claims:

a. First, lienholders of record prior to the recordation of the tax deed to the purchaser in the order of their priority (that is, the oldest active lien first),

b. and,Then, any person with title of record to all or any portion of that property prior to the recordation of the tax deed to the purchaser (after lienholders are satisfied any excess proceeds may be distributed to the prior owner of the property, assuming he or she filed a claim).

Note: certain liens are by law "super-priority" in that they take precedence over liens recorded earlier. Examples are tax liens.

What is the claims review process?

The Tax Collector will review each claim and associated documents that establish the claim. If additional information is needed we will contact the claiming party.

After review by our office and with the concurrence of County Counsel a recommendation for distribution will be made to the Director of Finance. The Parties of Interest who submitted claims will be contacted with the recommended distribution of the excess proceeds.

The Parties have ninety (90) days to dispute the recommended distribution. If no dispute are received, the excess proceeds will be distributed as recommended and a check issued in the name of the claiming party.

How do I disagree with the recommended distribution?

The Parties have ninety (90) days from the date of the distribution notification to submit in writing a dispute of the distribution, with a reason/explanation of why it is being disputed.

No proceeds related to the parcel in question are distributed until the dispute is concluded. If no disputes are received, the excess proceeds will be distributed as recommended.

Finance