Understanding Excess Proceeds in Alabama: How to Claim Surplus Funds from Tax Sales

When a property is sold at a tax sale in Alabama, the winning bid often exceeds the amount needed to cover the owed taxes, interest, and sale costs. The surplus funds left over from the sale, known as excess proceeds, can be claimed by the rightful party under Alabama law. Here’s how the process works:

Step 1: Holding Excess Funds

After a tax sale, any excess proceeds are deposited into a separate account by the county treasury. These funds are held during a three-year administrative redemption period, allowing the original property owner an opportunity to redeem their property.

Step 2: Claiming Excess Proceeds

Redemption by the Property Owner

During the three-year redemption period, the original owner or any party with a legal interest can reclaim their property by following these steps:

Pay all required redemption costs (excluding the excess amount).

Obtain a Certificate of Pending Redemption from the county redemption official.

Present the certificate to the county commission to receive an Excess Funds Voucher.

Use the voucher to offset the excess amount when completing the redemption process.

After the Redemption Period

If the property owner does not redeem the property within three years:

The excess proceeds remain available for claim by the rightful party for up to 10 years from the date of the tax sale.

Claimants must provide proof of eligibility under Alabama law to collect the funds.

After 10 years, unclaimed funds become the property of the county government.

Step 3: Distribution of Excess Funds

If the property is redeemed during the allowable period, the county will distribute the excess funds as follows:

The tax sale purchaser may receive reimbursement, including any applicable interest accrued.

The original owner or other rightful claimants can apply to receive the remaining funds.

The purchaser must surrender the certificate of sale before receiving any payments.

Important Considerations

Each county in Alabama may have slightly different procedures, so it is crucial to check with the local county treasurer or tax collector.

Filing a claim for excess proceeds typically requires legal documentation proving ownership or a financial interest in the property.

If multiple parties claim the same funds, the dispute may need to be settled through court proceedings.

At The National Overages Finders Alliance (NOFA), we specialize in helping individuals recover excess proceeds from tax sales. If you or someone you know is entitled to surplus funds in Alabama, contact us today for a free consultation. Our team is here to guide you through the claims process efficiently and ensure you receive the money that rightfully belongs to you.

☎ Call us at: 866-800-6632