Recovering Surplus Funds After a Nebraska Tax Sale: FAQ and Step-by-Step Guide

Short answer: If a county sells real property for unpaid taxes and the sale brings in more money than what was owed, Nebraska law requires the county to hold the surplus and make it available to people with a legal right to those funds. To recover the surplus you typically must identify the surplus, contact the county treasurer, provide proof of your interest, and make a formal claim. If the claim is disputed, you may need to ask the county court to decide who gets the money.

How Nebraska law treats surplus funds from tax sales

In Nebraska, property tax procedures and sales are governed by state law. Proceeds from a tax sale are first applied to unpaid taxes, penalties, interest, and sale costs. Any remaining money (the surplus) does not automatically belong to the buyer at the sale; instead, the county must retain the funds so prior owners and other parties with a legal claim can recover them. See Nebraska statutes on property tax and tax sales for the controlling rules: Neb. Rev. Stat., Chapter 77 (Revenue and Taxation).

Who can claim the surplus?

• The former owner of the property (the person whose property was sold).
• Any lienholder or mortgagee who had a valid recorded lien at the time of sale and whose lien survived the sale.
• Other parties with a documented legal interest (for example, a judgment creditor with a recorded lien, or heirs who can prove ownership).

Typical step-by-step process to recover surplus funds in Nebraska

1. Confirm that a surplus exists. Ask the county treasurer or county clerk for the tax sale accounting and a copy of the certificate of sale or sale minutes. The county records will show the sale price and the amounts paid for taxes, costs, and purchasers’ credits.
2. Contact the county treasurer. Counties normally hold surplus funds in the treasurer’s office or another designated county account. The treasurer can tell you whether a surplus is available and explain the county’s local procedures for claiming it.
3. Gather proof of your claim. Typical documents include a recorded deed, mortgage or lien documents, a certificate of title search, photo ID, and documents proving your interest (probate papers, assignment of interest, lien instrument, etc.).
4. File a claim or application. Follow the county’s required form or submit a written claim. The claim should identify the property, the sale date, the amount of surplus (if known), and attach supporting documents that prove your interest.
5. If the county accepts the claim, it will disburse funds. When the county treasurer determines the claimant is entitled, the treasurer will pay the surplus (possibly after a short administrative review).
6. If the claim is contested, ask the court to decide. If multiple parties claim the same surplus or the county questions entitlement, the dispute can be presented to the county court (often the county in which the property is located) for adjudication. The court will determine distribution based on priorities established in law and the evidence.
7. Escrow or unclaimed funds. If no valid claim is filed within applicable statutory periods, or claimants cannot be found, counties follow state law for unclaimed public funds. These funds may ultimately be retained by the county or handled according to state escheat/unclaimed property rules.

Timing and deadlines

The right to claim a surplus and any deadlines for filing or contesting claims are governed by Nebraska law and local procedures. Because time limits and procedural rules can vary (and because missing a deadline can forfeit recovery rights), contact the county treasurer promptly after learning of a sale. For statutory rules that apply to tax sales and related procedures see Neb. Rev. Stat., Chapter 77. If the county indicates a court action is required, deadlines in court rules and statute will apply.

What to expect if a dispute goes to court

• The court will examine each claimant’s proof of interest and the order of priority set by law.
• Priority generally favors taxes and governmental liens first, then earlier recorded liens, then the former owner, but the exact order depends on the nature of the recorded interests and applicable statutes.
• The court may require notices, hearings, and filings similar to other property or quiet-title actions.

Common pitfalls to avoid

• Waiting too long to contact the county treasurer.
• Failing to obtain certified copies of deeds, mortgages, and lien recordings to prove your claim.
• Assuming the tax sale purchaser receives the surplus automatically.
• Not checking whether your lien was eliminated or preserved by the sale; how your lien fares affects entitlement to surplus proceeds.

Helpful hints

• Start with the county treasurer: they maintain the sale records and control disbursement of surplus funds. Ask for an itemized accounting from the sale.
• Obtain a current title search before filing a claim. A title search clarifies who had recorded interests at the time of sale and who may have priority.
• Bring originals or certified copies of documents that prove your interest: recorded deeds, mortgages, lien filings, assignments, probate documents, or powers of attorney.
• If your claim is based on a lien, show the recording date and any subordination or assignments that affect priority.
• Get written confirmation from the treasurer at each step — dates you filed a claim, any denials, and instructions for court action if the claim is contested.
• If a claimant cannot be located, consider hiring a title company or private investigator to locate heirs or lienholders before funds become unclaimed or escheated.
• When in doubt, consult a Nebraska attorney who handles tax sales or real estate disputes for advice about deadlines and court filings.

Where to learn more or get help: Start with the county treasurer in the county where the property is located. For state statutes on property tax and tax sales, see Neb. Rev. Stat., Chapter 77. If you need formal legal guidance, seek a Nebraska attorney who handles tax sale, foreclosure, or real estate matters.

Disclaimer: This article is for general informational purposes only and is not legal advice. It does not create an attorney-client relationship. Laws and procedures change. For advice about a specific situation, consult a licensed Nebraska attorney or the county treasurer.