How to Recover Surplus Funds from Tax Foreclosure Sales in Hawaii
Did you know that if your property was sold at a tax foreclosure auction in Hawaii, you might be owed money? It happens more often than you think. When a property sells for more than what was owed in back taxes, penalties, and sale costs, the leftover money -- called "surplus funds" -- belongs to the former property owner. But most people never find out these funds exist.
How Does This Happen?
Under Chapter 246 of Hawaiian Laws, county tax collectors can foreclose on properties with delinquent taxes. If taxes have been unpaid for three or more years, the county can even sell the property without going to court. At the auction, properties sometimes sell for significantly more than the tax debt, creating a surplus.
For example, if you owed $5,000 in back taxes and your property sold for $50,000, there could be $45,000 (minus sale costs and any liens) sitting in an account with your name on it.
Where Is the Money Held?
The location of your surplus funds depends on when the sale happened:
- Within the first year after the sale: The funds are held by the county tax collector or treasurer.
- After one year: Unclaimed funds are transferred to the Hawaii state unclaimed property administrator (Department of Budget and Finance).
Here is the good news: Hawaii never permanently keeps your money. Unlike many states where unclaimed funds eventually escheat (are permanently absorbed by the government), Hawaii holds surplus funds indefinitely. You can claim them no matter how much time has passed.
How to File a Claim
Step 1: Find out if surplus funds exist. Contact the county tax collector or treasurer in the county where your property was located. If more than a year has passed, check with the Hawaii Unclaimed Property Program.
Step 2: Gather your documents. You will need proof of identity and documentation showing you owned the property at the time of the tax sale. This might include a deed, property tax statements, or probate records if you are an heir of the former owner.
Step 3: Submit your claim. File the required paperwork with the office holding the funds. At the county level, this is typically a written claim submitted to the tax collector or treasurer. At the state level, you will need to complete the unclaimed property claim form.
Step 4: Follow up. Government offices can be slow. Keep records of all submissions and follow up regularly.
Important Deadlines to Know
- You have one year to redeem (buy back) your property after the tax sale.
- Surplus funds are held at the county level for approximately one year before being transferred to the state.
- Once at the state level, funds are held indefinitely -- they never expire.
Watch Out for Excessive Fees
You may be contacted by for-profit "finders" offering to recover your surplus funds for a fee. Be aware of Hawaii's rules:
- During the first 24 months that the state holds your funds, finder's fee agreements are unenforceable.
- After that, finders are limited to 25% of the amount recovered.
- The agreement must be in writing and clearly state the terms.
Before you agree to pay anyone a percentage of your money, know that there are free alternatives.
Get Free Help from AuctionBlock.org
AuctionBlock.org is a mission-driven company that helps former property owners recover surplus funds from tax foreclosure sales at no cost. We can help you determine if funds exist, navigate the claim process, and get your money back -- without charging you a dime.
Don't let your money sit unclaimed. Contact AuctionBlock.org today and find out if Hawaii owes you surplus funds from a tax foreclosure sale. Our services are always free.
Tyler v. Hennepin County: A Landmark Ruling
In 2023, the U.S. Supreme Court ruled unanimously in Tyler v. Hennepin County that governments cannot keep surplus proceeds from tax sales beyond what is owed, finding this violates the Takings Clause of the Fifth Amendment. This landmark decision has strengthened property owners' rights to surplus funds nationwide and has prompted many states to reform their tax foreclosure laws. As of 2026, laws in this area are evolving rapidly.
AuctionBlock.org is a mission-driven company providing surplus fund recovery assistance. This guide is for educational purposes only and does not constitute legal advice. Laws change frequently — always verify current statutes with a licensed attorney in your state. Last updated: April 2026.