Tax Surplus Information – General

What is a tax surplus? 

When a foreclosed property is sold at a public auction, sometimes the final sale price exceeds the amount that is owed to the foreclosing entity. The excess amount over the amount owed is called surplus funds. If there are any funds remaining, then the property owner may be entitled to receive the remaining amount. However, because the law doesn’t require the city or county to give surplus notifications, the former owners often do not know that they may be entitled to excess funds.

These funds can only be claimed from the county’s office by a certified court order. If the funds are not claimed within a certain time frame, they are sent to the New York State Comptroller’s Office of Unclaimed Funds. After this deposit is made, anyone with an interest or claim to the money must bring a “surplus money proceeding,” which is a legal action in which the former homeowner requests some or all of the surplus funds.

Erie County property owners, with the exception of Lackawanna property owners, are entitled to a tax surplus if their properties are foreclosed on and are encouraged to find out if they have available funds. If you are from another county, you may also be eligible but will have to verify with the foreclosing entity. 

 

Frequently Asked Questions:

How do I check to see if there’s any money remaining after the foreclosure?
Contact your county Comptroller’s Office. If you are in Erie County, the phone number to the Comptroller’s Office is (716) 858-8400 and the email address is comptroller@erie.gov. You may also look up your property at http://www2.erie.gov/surplusfunds/index.php?q=search-surplus-funds.

If you are outside of Erie County, a brief Google search with “(your county) Comptroller’s Office” will lead you to the office’s website and contact information.

Do I need a lawyer to claim the surplus funds?
No, but it is always helpful to have an attorney assisting you. If you are an Erie County resident, free legal assistance is provided by the Western New York Law Center. For more information and to see if you qualify for assistance, please contact wnylc@wnylc.com or call (716) 855-0203. Additionally, more legal information and/or attorney referrals can be found by contacting the 8th District Court Help Center at (716) 845-1816. You can contact your local bar association to see if any free legal services offices in your area offer assistance with surplus money proceedings.

How long does it take to get the surplus funds?
This depends on the court system and what the individual judge in the case requires of the claimant. Once the Notice of Claim is filed, which is a document notifying the municipal government that you wish to commence the surplus process, there is a thirty day waiting period before filing the motion for the surplus. Once the motion is filed, the Judge will either sign an order awarding surplus funds immediately or the Judge will appoint a referee. If a referee is appointed, the referee must submit a report regarding what other entities might have a claim to the funds and who should be awarded the funds. Some referees hold hearings to determine this. Then, the Court receives the referee’s report and signs the Order awarding surplus funds to the appropriate parties.

Do I need to spend any money to receive the surplus funds?
Even if you use free legal services, there is typically a filing fee associated with court filing. However, sometimes the court will allow the claimant to waive the filing fee for the motion if the claimant’s income is below a certain percentage of the poverty level. There may also be small fees associated with obtaining the Certificate of Money on Deposit and the Certificate of Claims. If a referee is appointed, the referee will take a fee out of the surplus monies, which will reduce the amount awarded at the end. A stub search or title search can cost anywhere from roughly $100 to $300, depending on the title company.

What kinds of documents do I need to claim the surplus funds?
You will need to obtain a Certificate of Money on Deposit from the County Comptroller’s Office. (See below). You will also need a title search or stub search of the property for the dates covering the period that the claimant owned the property to show if any liens existed prior to the foreclosure auction. A title company will do this for you for a fee. These items are necessary to obtain prior to filing the Notice of Claim. After the Notice of Claim is filed, a motion must be made to the court attaching the Certificate of Money on Deposit, the stub search, the Notice of Claim and a Certificate of Claims. The Certificate of Claims is obtained at the County Clerk’s Office and it states whether any other individuals or entities have put in a claim for the surplus funds. If any of the liens listed in the stub search were satisfied prior to the foreclosure action any evidence of this must be attached to the motion.

Can I recover surplus funds on a property that I did not own (for example, my parents’ property)?
Not usually–you had to have been on the deed to the property at the time it was sold. If you are executor or administrator of an estate you can make a claim to surplus funds on behalf of the estate, but these funds must be deposited with the Surrogate’s Court. If the funds are not required to be deposited with the Surrogate’s Court, you are not free to use these funds as you wish. You must abide by your obligations as executor or administrator to use the funds to first pay off all debts and then distribute the funds according to the will or the New York State laws that govern. It is advisable to speak to an experienced estate attorney if you wish to do a surplus proceeding on behalf of an estate.

What steps should I take (or whom should I contact) if I want to recover surplus funds?

You are encouraged to contact an attorney to help you through this process. For information on finding an attorney, please see the answer to the second question in this FAQ.

1. Contact the County Comptroller’s Office and the New York State Comptroller’s Office to see if any money is on deposit and to obtain the Certificate of Money on Deposit
2. Obtain a title search or stub search for the dates you owned the property
3. File a Notice of Claim with the County Clerk and serve it on the foreclosing entity, the County or State Comptroller, and all lienholders listed in the title search
4. Wait at least thirty days and then file a motion with the court
5. Attend the motion hearing date and follow the court’s instructions
6. If a referee is appointed the court may ask you to submit an Order of Reference
7. Serve the Order of Reference on all those served with the Notice of Claim
8. Obtain a copy of the Referee’s Report and wait for the Court to sign the order awarding the surplus funds
9. Obtain a certified copy of the order awarding surplus funds (there may be a small fee for this) from the County Clerk
10. Bring the certified copy of the order to the County Comptroller or mail it to the New York State Comptroller