How to Recover Surplus Funds from Tax Foreclosure Sales in Massachusetts
Did you know that if your property was sold at a tax foreclosure auction in Massachusetts, you might have money waiting for you? It happens more often than you think. When a property sells for more than the taxes owed, the leftover money — called "surplus funds" or "overages" — legally belongs to the former owner. But most people never find out it exists.
What Are Surplus Funds?
When a municipality in Massachusetts forecloses on a property for unpaid taxes, the property is eventually sold. If the sale price exceeds the total amount of delinquent taxes, interest, penalties, and sale costs, the difference is surplus. For example, a home sold for $200,000 with $30,000 in tax debt would generate $170,000 in surplus.
Under Massachusetts General Laws Chapter 60, Section 28, the tax collector must account for and pay the former owner any surplus above the taxes, interest, and charges.
Who Can Claim Surplus Funds?
You may be entitled to surplus funds if you were:
- The property owner at the time of the tax sale
- A mortgage holder or lienholder with a recorded interest
- An heir or legal representative of the former owner
How to File a Claim
Here are the steps to recover your surplus funds:
- Contact the local tax collector in the city or town where your property was located. Ask about surplus from your property's sale and request a written accounting.
- Check with the Land Court or Superior Court if the foreclosure was judicial — funds may be held by the court.
- Gather your documents: photo ID, proof of prior ownership (deed or tax records), and any lien releases.
- Submit a written claim with your documentation to the appropriate office.
- Follow up regularly and keep copies of everything you send.
Know the Deadline
This is critical: under Chapter 200A, Section 6, surplus funds held in court are presumed abandoned after three years. Once that happens, the money may be transferred to the state and become much harder to recover. Do not wait.
Mortgage Foreclosure Surplus Too
If your property also went through mortgage foreclosure, Chapter 244, Sections 31 and 36 protect your right to any excess proceeds. If the mortgagee received more than what was owed, you can recover the difference through a civil action.
Watch Out for Scams
Be cautious if someone contacts you offering to recover your money for a large fee. You have the right to file a claim yourself for free. Always verify the credentials of anyone offering recovery services.
Major 2024 Reform Law
On August 5, 2024, Massachusetts signed a landmark reform law that requires surplus from tax sales to be returned to former homeowners. This law also:
- Reduced the interest rate on tax liens from 16% to 8%
- Is retroactive for three years — meaning past sales may be affected
- Introduces flexible repayment plans (5-10 years with as little as 10% down)
This is a major victory for property owners and was enacted in response to the Tyler v. Hennepin County Supreme Court decision.
The Impact of Tyler v. Hennepin County
In Tyler v. Hennepin County (2023), the U.S. Supreme Court ruled unanimously 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 ruling has strengthened property owners' rights to surplus funds nationwide. As of 2026, laws are evolving rapidly across all states in response to this decision.
Free Help from AuctionBlock.org
You do not have to navigate this process alone — and you do not have to pay someone a percentage of your money. AuctionBlock.org is a mission-driven company that helps former property owners recover surplus funds for a flat $4,999 fee upon successful recovery. We can search for your funds, help you prepare your claim, and guide you through every step.
If you lost a property to tax foreclosure in Massachusetts, do not leave money on the table. Contact AuctionBlock.org today at auctionblock.org to find out if surplus funds are waiting for you. It costs nothing to check — and the money is rightfully yours.
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.