Massachusetts Tax Foreclosure
Prevention

When a property is sold at a tax foreclosure auction in Massachusetts for more than the amount of taxes, interest, and charges owed, the excess funds — known as surplus or overages — belong to the former property owner. Massachusetts law, specifically Chapter 60, Section 28 of the Massachusetts General Laws, requires that collectors account for and return these surplus funds to the rightful owner upon demand. Despite this legal requirement, many former property owners never learn that surplus funds exist, and the money can be presumed abandoned after just three years under Chapter 200A, Section 6. This whitepaper provides a comprehensive guide to understanding, locating, and claiming surplus funds from tax foreclosure sales in Massachusetts. Note: This guide reflects information current as of April 2026. Tax foreclosure laws are actively evolving following the landmark Tyler v. Hennepin County Supreme Court decision (2023). Always verify current statutes and consult with a licensed attorney before taking action.

Massachusetts uses a tax lien and tax deed system for collecting delinquent property taxes. When property taxes become delinquent, the local tax collector may pursue collection through distress, seizure, or sale of the property. The process is governed by Chapter 60 of the Massachusetts General Laws (Collection of Local Taxes). The tax collection process in Massachusetts generally follows these steps: 1. The local tax collector sends demand notices to the delinquent property owner. 2. If the taxes remain unpaid, the collector may take the property by tax taking (a lien instrument recorded at the registry of deeds). 3. After the tax taking, there is a redemption period during which the owner can pay the outstanding taxes, interest, and charges to reclaim the property. 4. If the property is not redeemed, the municipality may petition the Land Court to foreclose the right of redemption. 5. Once foreclosure is complete, the municipality may sell the property. Massachusetts tax foreclosure proceedings are judicial in nature, meaning they go through the Land Court. The municipality files a petition to foreclose the tax lien, and the court oversees the process, ensuring proper notice is given to all interested parties. When the property is sold, any amount received above the taxes, interest, and charges constitutes the surplus.

Surplus funds are the excess proceeds from a tax foreclosure sale — the amount remaining after all delinquent taxes, interest, penalties, and costs of the sale have been satisfied. For example, if a property is sold at auction for $150,000 and the total tax debt plus costs was $25,000, the surplus would be $125,000. Under Massachusetts law, the following parties may be entitled to surplus funds: - The former property owner at the time of the tax sale - Mortgage holders or lienholders with recorded interests in the property - Heirs or legal representatives of a deceased former owner - Any person with a legal or equitable interest in the property at the time of the sale The former property owner generally has first priority to claim surplus funds after any outstanding liens or encumbrances are satisfied. Mortgage foreclosure surplus is also protected under Chapter 244, Sections 31 and 36, which provide that any excess received by a mortgagee may be recovered by the mortgagor in a civil action.

The primary statutes governing surplus funds from tax foreclosure sales in Massachusetts include: 1. Chapter 60, Section 28 — Accounting for Surplus: This statute requires the tax collector to give a written account of every sale on distress or seizure and charges, and to pay the owner any surplus above the taxes, interest, and charges of keeping and sale. This is the foundational statute establishing the right of former owners to tax sale surplus. 2. Chapter 244, Section 31 — Distribution of Money Tendered and Paid into Court: Governs the distribution of surplus in mortgage foreclosure situations. The court may order deductions for amounts due the plaintiff, with the balance paid to the defendant (former owner). 3. Chapter 244, Section 36 — Excess Received by Mortgagee; Recovery: Provides that if a mortgagee receives more than is due on the mortgage, the mortgagor or other person entitled to the excess may recover it in a civil action. 4. Chapter 200A, Section 6 — Money Paid into Court; Presumption of Abandonment: Monies paid into any court within the Commonwealth for distribution are presumed abandoned if not claimed within three years after the date of payment into court. These statutes work together to create a framework where surplus funds must be accounted for, made available to rightful owners, and only after a three-year period can they be treated as abandoned property. 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. 5. 2024 Reform Law (Signed August 5, 2024) — POST-SOURCE-MATERIAL CHANGE: Massachusetts enacted a major reform law that now requires surplus proceeds from tax sales to be returned to the former homeowner. The interest rate on tax liens was reduced from 16% to 8%. The law is retroactive for three years. It also introduces flexible repayment options, including 5-to-10-year repayment plans with as little as 10% down payment. This law was enacted in direct response to the Tyler v. Hennepin County decision and represents one of the most comprehensive state-level reforms to date.

To claim surplus funds from a tax foreclosure sale in Massachusetts, follow these general steps: 1. Identify the Surplus: Contact the local tax collector's office in the municipality where the property was located. Request information about whether surplus funds exist from the sale of your former property. The collector is required to provide a written account of the sale under Chapter 60, Section 28. 2. Gather Documentation: Assemble the following documents: - Proof of identity (government-issued photo ID) - Proof of ownership at the time of the tax sale (deed, tax records) - Death certificate and probate documents if claiming as an heir - Any lien releases or satisfaction documents 3. File a Written Claim: Submit a written claim to the local tax collector's office. Include your documentation proving your entitlement to the surplus funds. 4. If Funds Are Held by a Court: If the surplus funds have been paid into court (common in judicial foreclosure proceedings), you may need to file a motion or petition with the appropriate court (typically the Land Court or Superior Court) requesting release of the funds. 5. Follow Up: Stay in contact with the tax collector's office or court clerk to check on the status of your claim. Response times vary by municipality. If your claim is denied, you have the right to pursue the matter through civil court. Consulting with a Massachusetts real estate attorney may be advisable, particularly for larger claims or complex ownership situations.

Time is critically important when claiming surplus funds in Massachusetts: - Three-Year Abandonment Period: Under Chapter 200A, Section 6, monies paid into any court within the Commonwealth are presumed abandoned if not claimed within three years after the date of payment into court, or as soon after the three-year period as all claims filed in connection with it have been disallowed or settled by the court. - After Presumption of Abandonment: Once funds are presumed abandoned, they may be transferred to the Commonwealth's abandoned property division. While claims may still be possible after this point, the process becomes significantly more complicated and may involve additional requirements. - Act Quickly: The three-year window begins running from the date the funds are paid into court or become available for distribution. Given bureaucratic processing times and the complexity of establishing a claim, it is strongly recommended that former property owners begin the claims process as soon as possible after learning about potential surplus funds. There is no minimum waiting period before filing a claim — you can and should file as soon as you become aware that surplus funds may exist from the sale of your former property.

AuctionBlock.org is a mission-driven company dedicated to helping former property owners recover surplus funds from tax foreclosure sales — for a flat $2,000 fee upon successful recovery. Unlike for-profit recovery companies that may charge significant fees (sometimes 30-40% of the recovered amount), AuctionBlock.org provides its services for a flat $2,000 fee upon successful recovery to claimants. Here is how we can help Massachusetts residents: - Free Surplus Fund Search: We can help you determine whether surplus funds exist from the sale of your former property by researching municipal records and court filings. - Claims Assistance: Our team can guide you through the claim filing process, help you assemble the required documentation, and ensure your claim is properly submitted to the appropriate office. - Deadline Monitoring: We track critical deadlines to ensure your claim is filed well within the three-year abandonment period under Chapter 200A, Section 6. - Education and Empowerment: We provide educational resources to help you understand your rights under Massachusetts law, including Chapter 60, Section 28 and Chapter 244. - Referral to Legal Resources: For complex cases that may require legal representation, we can connect you with pro bono or low-cost legal services in Massachusetts. Our mission is to ensure that surplus funds are returned to the people who rightfully own them — not absorbed by government coffers. If you lost a property to tax foreclosure in Massachusetts, contact AuctionBlock.org today to find out if you have unclaimed surplus funds waiting for you. Visit us at auctionblock.org or reach out through our website to get started.