Detailed Answer
Under Virginia law, a foreclosure sale under a deed of trust is conducted by a trustee and overseen by the Clerk of the Circuit Court in the county where the property is located. If the sale price exceeds the outstanding debt, fees and costs, the excess balance is called “surplus funds.” An interested party—such as a former owner, junior lienholder, or creditor—can follow these steps to determine whether surplus funds remain and to seek their distribution.
1. Understanding Surplus Funds
Surplus funds are the net proceeds left after fully satisfying the secured debt, trustee’s fees, publication costs, and court fees. Under Va. Code § 55.1-3230, the trustee must report the total sale proceeds and the amounts paid out for costs and the secured debt.
2. Reviewing the Trustee’s Report of Sale
Within 10 days after the sale, the trustee must file a “Report of Sale” with the Clerk of the Circuit Court. This report outlines the gross sale price, disbursements to the lender, costs, and any surplus. To review the report, use the case number or property address to search the court’s public records:
- Online: Virginia Judicial System’s Civil Case Information (https://www.vacourts.gov).
- In person: Clerk’s office in the county where the property is located.
3. Checking with the Clerk of the Circuit Court
Contact the Clerk’s office to ask if a surplus has been deposited. Provide the foreclosure case number or property address. If a surplus remains, the clerk may hold the funds for 30 days before distributing them to the party who first files a valid claim.
4. Filing a Petition for Distribution
If you believe you are entitled to surplus proceeds but they have not been paid out, you may petition the court under Va. Code § 8.01-130 to compel distribution. Your petition should:
- Identify the foreclosure case and property.
- Explain your legal interest (former owner, lienholder, etc.).
- Attach supporting documents (deed, loan statements, lien records).
The court will schedule a hearing. If multiple claimants appear, the judge resolves competing interests and orders distribution accordingly.
Helpful Hints
- Note the foreclosure sale date in the trustee’s published notice.
- Use the Virginia Judiciary online portal for quick docket searches.
- Bring the foreclosure case number and proof of your claim when visiting the clerk’s office.
- File a petition under Va. Code § 8.01-130 if the clerk has not released surplus funds.
- Consult a Virginia attorney if multiple parties dispute the surplus or if large amounts are involved.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney in Virginia to discuss your specific situation.