How to Claim Surplus Funds After a Municipal Tax Foreclosure in Vermont

Short answer: If a tax foreclosure sale of your mother’s house generated money above the taxes, interest, fees, and costs, the town or municipality holds those surplus proceeds for the lawful claimant(s). To recover the funds you must locate the surplus, document your right to the money (as owner, personal representative, or authorized agent), follow the town’s claim procedures, and—if necessary—ask a Vermont court to order distribution.

Detailed answer — step by step

1. Identify whether a surplus exists and who holds it

When a municipality sells property to collect delinquent property taxes, any money left after paying off the taxes, interest, penalties, and sale costs is a surplus. That surplus is typically held by the town treasurer or other municipal official until it is paid to the entitled person(s).

2. Start with the municipal office that ran the sale

Contact the town or city treasurer, tax collector, or clerk where the property is located. Ask whether a tax sale occurred, whether a surplus resulted, and what local claim procedure they use. Municipal staff can usually tell you:

• Whether funds remain after the sale;
• How to file a written claim to those funds;
• What documents they require (examples below); and
• Whether there are competing claims (mortgage holder, other lienholder, heirs).

3. Gather the documents you will likely need

Typical documentation the municipality will ask for includes:

• Proof of identity for the claimant (government ID);
• Proof of the decedent’s ownership (recorded deed, prior tax bills, title report);
• If your mother is alive: documentation that you are authorized to act for her (durable power of attorney, written authorization, or a court-appointed guardian);
• If your mother is deceased: a death certificate and probate documents (letters testamentary or letters of administration) showing you are the executor/administrator;
• Affidavit of heirship or small‑estate documents if no formal probate was opened (if allowed by the town);
• Signed release forms or claims the municipality provides.

4. File the municipal claim promptly

Follow the town’s prescribed procedure. File the claim in writing and include all requested supporting documents. Ask for a written receipt of your claim and a timeline for review. Municipalities may have internal deadlines or priorities for distributing surplus funds.

5. If the municipality denies or there are competing claims, consider court relief

If the town refuses to pay, or if multiple parties claim the same surplus (for example, the former owner, a mortgage lender, or a judgment creditor), you may need to ask a Vermont court to decide distribution. Typical court options include filing a petition in the superior court seeking an order for distribution or an interpleader-style proceeding. If the estate is open in probate, the probate court may play a role in approving distribution to the estate’s representative.

6. Special rules if your mother is incapacitated or deceased

• If your mother is alive but incompetent, a durable power of attorney executed before incapacity or a guardianship/conservatorship order will be required for you to claim funds on her behalf.
• If your mother is deceased, the executor or administrator named by probate typically claims the surplus for the estate. If there is no probate, towns sometimes accept sworn heirship affidavits for small amounts, but rules vary—ask the municipal office or a probate clerk.

7. Keep records and be ready for tax or creditor claims

Retain copies of everything you file and every communication. Surplus funds may be subject to claims by mortgage lenders or other lienholders who recorded liens before the tax sale. The municipal clerk or treasurer should provide a distribution accounting that shows how they calculated the surplus and which liens or claims (if any) were paid first.

Where to look in Vermont law and government resources

Vermont law and municipal practice govern tax sales and distributions. Useful starting points:

• Vermont statutes (Title 32 covers property taxation and municipal tax matters): https://legislature.vermont.gov/statutes/title/32
• Vermont Department of Taxes (general guidance for municipal officials and taxpayers): https://tax.vermont.gov
• Vermont Judiciary — Probate and court contact information for petitions related to estates or distribution disputes: https://www.vermontjudiciary.org

Because procedures and internal forms vary by town, the municipal treasurer or clerk is your best immediate contact.

Helpful Hints

• Act quickly. Municipal procedures and potential statute-of-limitation issues can limit how long you can claim surplus funds.
• Bring proof of your authority. Municipalities routinely require documentary proof (POA, probate letters, death certificate, recorded deed).
• Ask for an itemized accounting of the sale. That helps identify any incorrect charges or competing lien claims.
• If your mother signed a durable power of attorney before any incapacity, the agent may be able to claim funds on her behalf without probate.
• If a mortgage or other lien exists, expect the lienholder to assert a claim. The municipal accounting will show whether liens were paid from the sale proceeds before any surplus distribution.
• If the municipality won’t cooperate or multiple parties claim the funds, consult or hire an attorney experienced with Vermont tax sales, probate, or civil procedure to file a court petition seeking distribution.
• Use free municipal and probate clerks as resources. They often can explain local processes and the forms you will need.

Disclaimer: This article explains general Vermont procedures and common steps to claim surplus funds after a tax sale. It is not legal advice and does not create an attorney‑client relationship. For advice about your specific situation—especially if there are competing claims or complex probate issues—consult a Vermont attorney or contact the municipal office that ran the sale.