How to Recover Surplus Funds from Tax Foreclosure Sales in Texas
If your property was sold at a tax foreclosure auction in Texas, the county may be holding money that belongs to you -- but you only have two years to claim it.
What Are Surplus Funds?
When a property sells at a tax sale for more than the taxes, penalties, interest, and costs owed, the extra money is called "excess proceeds" or surplus funds. Under Texas law, that money belongs to the former property owner.
Texas Law Requires the County to Notify You
Under Texas Tax Code Section 34.03, if the surplus exceeds $25, the clerk of the court must send you a certified letter within 31 days telling you:
- How much surplus exists
- Your right to claim it under Section 34.04
- A copy of the relevant statutes
But if you have moved, you may never receive this letter. Do not assume that no letter means no money.
The Two-Year Deadline Is Critical
Texas holds surplus funds for only two years after the sale date. If nobody claims the money within that window, it gets distributed to the taxing units -- the county, city, school district, and others. After that, recovery is essentially impossible.
Do not wait. If you think you may be owed surplus, act now.
How to Claim Your Money
- Contact the District Clerk in the county where your property was sold. Ask about excess proceeds from the tax sale.
- Gather your documents: government ID, proof of prior ownership (deed, tax records), and the cause number if you have it.
- File a claim under Section 34.04 with the court.
- Wait for court review: The court will verify your entitlement and order payment.
Watch Out for Fee Caps
Texas imposes strict finder's fee limits. The cap is the lesser of 25% or $1,000, and recovery requires a licensed attorney. This applies even to funds held at the county level. The finder also cannot file a claim on your behalf. This means for-profit services are limited in what they can charge and do.
You can file the claim yourself or get free help.
Who to Contact
- Tax sale surplus: District Clerk in the county where the sale occurred
- Mortgage foreclosure surplus: County Clerk or Sheriff
Tyler v. Hennepin County: A Landmark for Property Owners
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 prompted many states to reform their tax foreclosure laws. As of 2026, laws in this area are evolving rapidly, so always verify current statutes in your state.
Do Not Let Your Money Disappear
AuctionBlock.org is a mission-driven company that helps former property owners recover surplus funds at no cost at all. We will research your case, help you file your claim, and make sure you do not miss the two-year deadline.
Texas has clear protections for former property owners, but the clock is ticking. Contact AuctionBlock.org today and let us help you recover what is rightfully yours -- for free.
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.