Claiming Surplus Funds After a Tax Foreclosure Sale in Colorado: Frequently Asked Questions

Quick answer: If a tax foreclosure sale of your mother’s house in Colorado produced surplus funds (the sale brought in more money than the taxes, interest, fees, and higher-priority liens), the owner or the owner’s heirs and certain junior lienholders can usually claim those surplus funds from the county. To recover money you must locate the county office that handled the sale, assemble paperwork proving your right to the funds, file a written claim, and — if necessary — complete probate or other estate steps. This is a general overview, not legal advice. Consult a Colorado attorney or the county treasurer/public trustee for help with your situation.

Detailed answer — how surplus funds claims work in Colorado

1. What are “surplus funds”?

When a property is sold after unpaid property taxes, the sale proceeds first pay the unpaid taxes, fees, interest, and costs. If the sale price exceeds those amounts and any higher-priority liens that attach to the sale, the extra money is the “surplus” (sometimes called an overage or excess proceeds). Colorado law and county procedures govern who may claim those funds and how.

2. Who has the right to claim surplus funds?

Primary right: the recorded owner of the property (or the owner’s estate/heirs) typically has first claim to surplus funds.
Junior lienholders: a mortgage or lienholder junior to the tax lien may have a claim for the unpaid balance of the lien to the extent the surplus covers it.
Other claimants: persons with an equitable interest (for example, someone who paid off the mortgage or who holds an assignment of rights) may also have a claim if they can prove their interest.

3. Where to start — find the sale record and the county office

Tax foreclosure and sale records are kept at the county level. Depending on how the county handled the tax enforcement, the relevant office may be the county treasurer, the county clerk and recorder, or (in some kinds of foreclosure sales) the public trustee. Find the county that conducted the sale and ask that office for the “certificate of sale,” sale ledger, and any distributions or surplus statements. County tax and sale rules vary, so the county office is the first and best resource.

4. Documentation you will likely need

Most counties require proof that you are the person entitled to the funds. Typical documents:

Government photo ID for the claimant.
Proof of ownership or right to inherit — recorded deed, deed showing transfer, affidavit of heirship, or letters testamentary/letters of administration from probate court if the owner is deceased.
Certified copy of the owner’s death certificate if claiming as an heir or representative of an estate.
Power of attorney or assignment documents if you act for someone else (note: some counties will not accept a POA after the principal’s death; check local rules).
A signed, notarized claim form or affidavit that the county requires (many counties have a form or instructions).
Taxpayer ID or W-9 may be required for tax reporting if the county issues payment.

5. Typical steps to file a claim

Contact the county treasurer or public trustee that ran the sale. Ask if surplus funds exist and ask for the county’s claim form and requirements.
Assemble the documents listed above. Get certified or notarized copies if required.
File the written claim with the county office. Keep certified mail receipts or proof of filing.
If the county requires notice to other claimants (for example, junior lienholders), follow the county’s process so the county can clear competing claims before distributing funds.
If the county denies your claim or a competing claimant disputes your claim, you may need to file a petition in county court asking the judge to determine the rightful owner of the surplus.

6. Deadlines and unclaimed funds

Deadlines vary by county and by the type of sale. Counties may hold surplus funds for a period to allow claims. If funds remain unclaimed, many counties turn the money over to the state or treat it as unclaimed property under the Colorado State Treasurer’s unclaimed property program. For general information on unclaimed property in Colorado, see the Colorado State Treasurer’s Unclaimed Property Division: https://treasury.colorado.gov/unclaimed-property.

7. What if the owner died and you are an heir?

If your mother died before you attempted to claim the surplus, the county will want to see evidence you have legal authority to claim the funds. That typically means probate has been opened and you hold letters testamentary or letters of administration, or the heirs use a small estate affidavit if the estate qualifies under Colorado law. If the estate hasn’t been administered, you likely must open a probate or obtain court authorization before the county will release money to you.

8. When to consider hiring an attorney

Consider hiring a Colorado attorney if:

The county denies your claim or a competing claimant appears.
Probate or estate administration is needed to prove your right to the funds.
The funds are large or the title situation is complicated.
You aren’t sure which county office handled the sale.

9. Where to read Colorado law on property tax and foreclosure

For statutory guidance, review the Colorado Revised Statutes on property taxation and foreclosure topics. The Colorado General Assembly’s statute pages are a reliable starting point: https://leg.colorado.gov/colorado-revised-statutes. For county property tax processes and local rules, contact the county treasurer or the county clerk and recorder. For statewide guidance about property tax administration, see the Colorado Department of Local Affairs property tax resources: https://cdola.colorado.gov/local-government-services/property-tax.

Helpful Hints

Start with the county treasurer: they process tax sales and can tell you if there’s a reported surplus and the claim process.
Get certified copies of the death certificate and probate documents early — counties often require them when the owner died.
Look up the sale records online: many Colorado counties publish tax sale and surplus notices on their websites.
Keep originals and certified copies of all documents. Bring photo ID and proof of relationship to the owner.
If you find competing claimants, don’t sign away rights without legal advice. Competing claims may require a court to resolve.
If the county sends you a surplus check, cash it only after you are certain you have the lawful right. Returning an incorrect payment can be difficult.
Avoid firms that guarantee recovery for an up-front fee or that pressure you to sign a large contingency fee; always read any agreement carefully and consider seeking a local attorney’s review.
If the county indicates no active claimants, ask whether the funds will be transferred to the State Treasurer’s unclaimed property program and how to file an unclaimed property claim.

Where to get help: Contact the county treasurer or public trustee in the county where the property is located. If you need legal help with probate, contested claims, or court petitions, contact a Colorado attorney experienced in probate, real estate, or tax-sale matters. To search Colorado statutes and for official legal language, visit the Colorado Revised Statutes at https://leg.colorado.gov/colorado-revised-statutes. For unclaimed funds information, see the Colorado State Treasurer’s Unclaimed Property page: https://treasury.colorado.gov/unclaimed-property.

Disclaimer: This article explains general Colorado procedures and is for informational purposes only. It is not legal advice, and it does not create an attorney-client relationship. Laws and rules change. For advice about your specific situation, consult a licensed Colorado attorney.