Sec. 34.04 of the Texas Tax Code provides in part as follows:
(a) A person, including a taxing unit, may file a petition in the court that ordered the seizure or sale setting forth a claim to the excess proceeds. The petition must be filed before the second anniversary of the date of the sale of the property. The petition is not required to be filed as an original suit separate from the underlying suit for seizure of the property or foreclosure of a tax lien on the property but may be filed under the cause number of the underlying suit.
(b) A copy of the petition shall be served, in the manner prescribed by Rule 21a, Texas Rules of Civil Procedure, as amended, or that rule's successor, on all parties to the underlying action not later than the 20th day before the date set for a hearing on the petition.
(c) At the hearing the court shall order that the proceeds be paid according to the following priorities to each party that establishes its claim to the proceeds:
(1) to the tax sale purchaser if the tax sale has been adjudged to be void and the purchaser has prevailed in an action against the taxing units under Section 34.07(d) by final judgment;
(2) to a taxing unit for any taxes, penalties, or interest that have become due or delinquent on the subject property subsequent to the date of the judgment or that were omitted from the judgment by accident or mistake;
(3) to any other lienholder, consensual or otherwise, for the amount due under a lien, in accordance with the priorities established by applicable law;
(4) to a taxing unit for any unpaid taxes, penalties, interest, or other amounts adjudged due under the judgment that were not satisfied from the proceeds from the tax sale; and
(5) to each former owner of the property, as the interest of each may appear.
(d) Interest or costs may not be allowed under this section.
(e) An order under this section is appealable.
Texas Petition for Release of Excess Proceeds and Notice of Hearing
Description
Key Concepts & Definitions
Petition for Release of Excess Proceeds and Notice: This legal document is filed to claim any excess funds remaining after the foreclosure sale of a property. Foreclosure Sale: A legal process where mortgaged property is sold to pay off the unpaid debt due to default. Excess Proceeds: The surplus money left after paying off the mortgage and costs associated with the foreclosure sale. Proceeds Notice: Official document notifying interested parties about the excess proceeds from the sale.
Step-by-Step Guide to Filing a Texas Petition for Release of Excess Proceeds
- Verify Eligibility: Confirm you are entitled to claim the excess proceeds as a former property owner or lien holder.
- Prepare Documentation: Gather required documents such as prove of ownership, lien documents, and identity verification.
- File the Petition: Submit the petition in the county where the property was sold. Include a 'Notice of Hearing' to inform all stakeholders of the court date.
- Attend the Hearing: Participate in the hearing process and present your claim for the excess proceeds.
- Collect Proceeds: If the petition is successful, follow the court's instructions to collect the excess proceeds.
Risk Analysis
- Documentation Errors: Inaccurate or incomplete documentation can lead to a denial of the claim.
- Legal Delays: Legal proceedings might take longer than expected, delaying access to funds.
- Disputed Claims: If multiple parties claim the excess proceeds, this can lead to a protracted legal dispute.
Best Practices
- Seek Legal Advice: Consulting with a legal expert in real estate or foreclosure can provide guidance and improve chances of a successful claim.
- Timely Filing: File the petition as soon as possible to avoid any complications arising from delayed claims.
- Detailed Record-Keeping: Maintain comprehensive records of all documents and communications related to the claim.
Common Mistakes & How to Avoid Them
- Neglecting Proper Notification: Failure to properly notify all interested parties can lead to dismissal of the petition. Ensure all notices are sent in accordance with legal requirements.
- Misunderstanding Eligibility: Misinterpreting eligibility criteria can result in unsuccessful petitions. Verify eligibility details thoroughly before filing.
- Ignoring Deadlines: Missing critical deadlines can jeopardize your right to claim excess proceeds. Keep track of all relevant timelines.
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FAQ
Surplus funds or surplus refer to the funds remaining after payment of all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements. as stated by the Florida Statute 45.032.Let's say you owed $100,000 on your mortgage, and it sold at a foreclosure sale for $175,000.
The lender has no claim to excess proceeds if a foreclosure sale ends in an overage. They can only recoup the amount of their lossesloan balance and associated costs. If their aren't any pending liens or judgments on the home, the borrower gets the overage. You have a right to claim the money.
If a foreclosure sale results in excess proceeds, the lender doesn't get to keep that money. The lender is entitled to an amount that's sufficient to pay off the outstanding balance of the loan plus the costs associated with the foreclosure and salebut no more.
In Foreclosure, Equity Remains YoursIf you cannot get new financing or sell the home, the lender can sell the home at auction for whatever price they choose. If the home does not sell at auction, the lender can sell the home through a real estate agent. Remember that equity is what you own of your home's value.
Banks are willing to negotiate foreclosures because they are losing money on the property when it sits vacant.Banks can negotiate directly with buyers without the assistance of a real estate agent. Because they own the property, banks can set the price for any value they deem acceptable.
Will I Get Money Back After a Foreclosure Sale? If a foreclosure sale results in excess proceeds, the lender doesn't get to keep that money. The lender is entitled to an amount that's sufficient to pay off the outstanding balance of the loan plus the costs associated with the foreclosure and salebut no more.
§ 33-727. This statute generally provides that proceeds from a mortgage foreclosure sale go first to creditors according to their priority, and only to the owner after creditors are paid in full.
(a) A person, including a taxing unit, may file a petition in the court that ordered the seizure or sale setting forth a claim to the excess proceeds. The petition must be filed before the second anniversary of the date of the sale of the property.