Recovering Surplus Funds After a Tax Sale in Washington

Disclaimer: I am not a lawyer. This article provides general information about Washington law and does not constitute legal advice. For advice about a specific situation, consult a Washington attorney or the county treasurer.

Detailed answer: How surplus funds are handled and how to claim them

When a property is sold in a Washington tax-title or tax-foreclosure sale, the sale proceeds first pay the delinquent taxes, penalties, interest, and sale costs. If the sale brings in more money than those amounts, the extra amount is called the surplus or overage. State law governs how that surplus is distributed and how claimants can recover it; see the Washington tax-title statutes at RCW chapter 84.64.

Who can claim surplus funds?

The typical potential claimants are:

• The former owner of the property (or their heirs or successors in interest).
• Holders of recorded liens or mortgages that have a valid legal interest in the property.
• Other persons or entities who can show a legal right to the surplus (for example, judgment lien holders who recorded before the tax lien or parties with an equitable claim).

Basic process to recover surplus funds

1. Verification of surplus: After the county completes the tax sale and pays taxes and sale costs, the county treasurer (or sheriff/court depending on the local procedure) prepares a distribution statement showing whether surplus funds exist. See RCW chapter 84.64 for the overall procedure.
2. Notification and publication: In many tax-title proceedings the county must notify interested parties or publish notice of sale and distribution. Interested parties should monitor notices from the county and the court docket.
3. Contact the county treasurer: If you believe you are entitled to surplus funds, contact the county treasurer’s office that handled the sale. The treasurer’s office usually handles initial claims, provides claim forms or instructions, and tells you what supporting documents the county requires.
4. Prepare documentation: Typical documents to prove a claim include government-issued photo ID, proof of prior ownership (deed), probate or heirs documents (if applicable), recorded mortgage or lien instruments, and any court orders or assignments. If you represent a lienholder, provide the recorded instrument showing the lien and its recording date.
5. File a written claim: File the county’s required claim form or a written claim with the treasury or clerk as directed. Some counties require an affidavit or a verified petition. Keep certified copies of all filings and get proof of delivery.
6. Resolve competing claims: If more than one person files a claim, the county may require the claimants to resolve priorities or may refer disputes to superior court. In contested cases, a petition to the superior court to determine entitlement may be necessary.
7. Payment: After the county determines the valid claimant(s), it will release the surplus. Distribution must follow the statutory priorities and any court order. If the county is unsure who is entitled, it will pay pursuant to a court order.

Priority and common complications

Statute and case law control how surplus funds are prioritized. Generally, taxes and sale costs come first. Remaining funds are then applied to valid liens and finally to the former owner. However, the exact order can vary depending on when liens were recorded and whether they are superior or inferior to the tax lien.

If multiple claimants assert rights to the surplus, the county may require a court determination before releasing funds. If you face competing claims, expect to provide proof of your recording date and legal interest.

When the county will not pay directly

If the county treasurer refuses to pay because of disputed claims, unclear paperwork, or an unresolved priority dispute, an interested person can ask the superior court to determine entitlement and order the county to disburse the funds accordingly. RCW chapter 84.64 provides the structure for tax title proceedings and related court involvement; consult it for procedural details: RCW 84.64.

Helpful hints

• Contact the county treasurer early. Counties have different procedures and forms for surplus-claim filings.
• Gather proof before you call: recorded deeds, recorded mortgages or liens, photo ID, and any court documents that show your claim.
• Run a title or lien search to identify other recorded interests. Knowing other claimants helps you anticipate disputes.
• Keep deadlines and publication notices in mind. Some steps in a tax-title case run on statutory schedules. If you miss required steps or deadlines you may reduce your ability to recover funds—check the county schedule and RCW 84.64.
• If you are a lienholder, confirm whether your lien was junior or senior to the tax lien. That status can affect whether the lien survived the tax foreclosure and whether you are entitled to proceeds.
• If the county asks you to file a court petition, consider consulting a Washington attorney experienced in tax-title or quiet-title proceedings for help with pleadings and proof.
• When in doubt, ask the county treasurer for written instructions and retain copies of everything you file or receive.

Where to find the statutes and local procedures

Washington’s tax-title and tax-foreclosure statutes are in RCW chapter 84.64. Read the chapter for statutory requirements and procedural rules: RCW chapter 84.64. For specific county procedures, visit the county treasurer’s website or call the treasurer’s office.

If your claim is contested or you have difficulty obtaining surplus funds, consider contacting a Washington attorney for a consultation. A lawyer can help prepare a claim, gather proof, and, if necessary, file a petition in superior court to obtain a court order directing the county to distribute the surplus.