Disclaimer

This article explains general principles of Oregon property and foreclosure law. It is educational only and not legal advice. For help asserting a claim to surplus funds or filing court papers, consult a licensed Oregon attorney.

Detailed answer — how survivorship rights interact with surplus funds in Oregon

Short answer: sometimes — but it depends on timing, the type of ownership recorded, whether the foreclosure extinguished the interest, and whether other recorded claims have priority. A right of survivorship can change who owns title and therefore who can claim surplus funds, but it does not automatically give a larger share to someone who was not the owner at the critical time.

Key points to understand:

• What surplus funds are: When a foreclosure sale yields more than is needed to pay the foreclosing lien and the sale costs, the extra money is called “surplus funds” or “excess proceeds.” Those funds are distributed to persons who hold valid legal interests in the property, in priority order.
• Which interests survive foreclosure: Foreclosure (especially by power of sale) typically extinguishes junior recorded interests and liens but pays out in priority order to lienholders who file timely claims. Whoever owned a present legal interest immediately before and at the time the sale cleared title (or as determined by the foreclosure law and sale process) is the person entitled to the surplus after lienholders with higher priority are paid.
• Right of survivorship (joint tenancy or survivorship deed): If the deed created a joint tenancy or otherwise gave a surviving co-owner a right of survivorship, the survivorship operation transfers the deceased co-owner’s interest directly to the survivor by operation of law (not by probate). That transfer changes who holds legal title going forward.
• Timing matters: If a co-owner died before the foreclosure sale, the surviving co-owner already owned the full title when the sale occurred and so would claim the surplus as owner (subject to valid lien claims). If the co-owner died after the sale but before distribution of surplus funds, whether the survivor or the deceased’s estate is entitled can depend on whether the transfer by survivorship occurred before the sale cleared title and on applicable court or trustee rules for distributing funds.
• Recording and notice: Priority usually depends on recorded documents and the timeline of recorded interests. A survivorship transfer that is effective before the sale may be followed by record evidence (deed, death certificate) that affects who can claim the funds. If a survivor never recorded proof, a competing claimant may contest the claim.
• Competing claimants: Junior lienholders, judgment creditors, and the former owner (if any) can file claims to surplus funds. The trustee or court will distribute funds according to Oregon foreclosure procedure and recorded priorities. A survivorship claim must be supported by the deed language and, when applicable, a death certificate or affidavit of survivorship.

Common fact patterns and outcomes

Below are typical scenarios to illustrate how survivorship status affects surplus claims:

• Death before sale: If one joint tenant died before the foreclosure sale, the surviving joint tenant owned the property at the time of sale. The survivor generally is the party entitled to any surplus after higher-priority liens are paid.
• Death after sale but before distribution: If the co-owner died after the sale, the trustee or court will look at who held legal title at the time the sale extinguished rights. If the survivorship transfer occurred before title was finally divested, the survivor claims the surplus. If the transfer did not occur until after title was divested, the deceased’s interest may have been extinguished by the foreclosure — reducing or eliminating any claim by the estate.
• Recorded liens and judgments: A survivorship owner’s right does not cut ahead of properly recorded, higher-priority liens. Lienholders who filed before or with proper priority will be paid from proceeds before any remaining surplus goes to the owner(s).
• Defective or ambiguous deed language: If the deed’s language is ambiguous about survivorship (for example, missing clear survivorship language), a court may need to resolve whether a survivorship interest exists. Without clear language or recordable evidence, asserting a larger share can be contested and delayed.

Where Oregon law and procedure matter

Oregon statutes and foreclosure rules set the process for foreclosures, sales, and distribution of proceeds. Chapter 86 of the Oregon Revised Statutes covers many aspects of mortgage and deed of trust foreclosure. For general reference to Oregon foreclosure law, see the Oregon Revised Statutes (Chapter 86): https://www.oregonlegislature.gov/bills_laws/ors/ors086.html. For the full Oregon statutes index, see: https://www.oregonlegislature.gov/bills_laws/Pages/ORS-Index.aspx.

Because distribution of surplus funds involves priority rules, recording dates, and possibly contested claims, you will often see courts or trustees refer to the ORS foreclosure provisions and to recorded title instruments when deciding who receives surplus funds.

How to assert a survivorship claim to surplus funds in Oregon

1. Collect documents that prove the survivorship interest: the recorded deed showing survivorship language (joint tenancy, right of survivorship deed, etc.), the death certificate of the decedent, and any recorded affidavits of survivorship.
2. Confirm the exact timeline: determine the date of death, the date of the foreclosure sale, and the date surplus funds were created or paid into court/trust. The effective date matters for determining who owned title when sale rights were extinguished.
3. Check recorded liens and priorities: obtain a title report or recorded document search to see if there are higher-priority claims that will be paid before any owner receives surplus funds.
4. File a formal claim where required: surplus funds may be handled by the foreclosure trustee, county sheriff, or a court. Follow their claim procedures and deadlines. Provide certified copies of deed and death certificate and any affidavits required.
5. Be prepared for disputes: other claimants (lienholders, creditors, estates) can object. If a dispute arises, the trustee or court will decide based on recorded facts and applicable statutory procedure; you may need a court hearing.

Helpful hints

• Prove the chain of title: make sure the deed that created the survivorship interest is recorded and clearly states a right of survivorship or joint tenancy.
• Act quickly: surplus claims often have procedural deadlines. Missing a deadline can forfeit your right to claim funds.
• Get certified copies: submit certified copies of deeds and death certificates when making claims. Originals may not be returned.
• Obtain a title or lien search: a short title report reveals competing claims and helps you estimate whether surplus funds may actually remain after higher-priority claims are paid.
• Consider limited attorney help: a lawyer can prepare affidavits of heirship or survivorship, file claims for surplus, and represent you if another party contests the claim.
• Expect documentation requests: trustees and courts routinely request proof of identity, ownership, and priority. Be ready to respond promptly.
• If unsure, ask the trustee or court clerk: they can explain filing steps and paperwork for claiming surplus funds in that particular foreclosure matter.