Detailed Answer
When a Washington trustee’s sale (nonjudicial foreclosure) or judicial foreclosure produces sale proceeds that exceed the total of liens, costs, and allowed sale expenses, the leftover money is called a surplus (sometimes called an overage). Recovering that surplus typically requires a court proceeding—commonly called a special proceeding or petition in superior court—to ask the court to order distribution of the funds to the rightful claimant.
Relevant law (where to start)
Washington’s Deeds of Trust foreclosure law is found in chapter 61.24 RCW. That chapter governs the nonjudicial trustee’s sale process and how sales and distributions operate. You can read the chapter here: RCW 61.24 — Deeds of Trust. Use this chapter as your primary statutory reference when preparing a petition for surplus funds.
High-level steps you must take
- Confirm a surplus exists and calculate it precisely. Obtain the trustee’s deed, trustee’s sale statement, and any closing statement. The surplus equals the sale price minus all liens with priority, allowed foreclosure costs, trustee fees, and other legally required disbursements. If a judicial sale occurred, get the sheriff’s or marshal’s sale papers showing the sales accounting.
- Identify the proper county and court. File the special proceeding in the Superior Court for the county where the foreclosed property is located. The court has jurisdiction over distribution of sale proceeds that originated from property in that county.
- Prepare a petition (special proceeding) to the court. The petition should include:
- A clear caption naming the petitioner (you), the trustee or sheriff who conducted the sale (if known), the original borrower/homeowner, and any known lienholders or claimants.
- A concise factual statement: property address, parcel number, date of sale, sale amount, and copies of the trustee’s deed or sheriff’s deed and sale accounting (attach as exhibits).
- A calculation showing how you reached the surplus amount and why you claim a right to that surplus (e.g., you are the former owner, an assignee, or have the highest prioritized claim after foreclosure expenses and senior liens were paid).
- The legal basis for relief (cite RCW 61.24 and other applicable authority) and a specific request for an order directing disbursement of the surplus to you.
- Prayer for costs and any relief to protect the court’s disbursement order (e.g., entry of judgment or order to the county treasurer/trustee to pay the funds).
- Attach supporting documents and affidavits. Attach the trustee’s deed, sale accounting, recorded deed of trust, payoff statements, and an affidavit of the petitioner verifying the facts and the calculation of the surplus. If you represent a corporation or entity, include proof of authority to act.
- File the petition and pay filing fees (or request a fee waiver). File in the Superior Court clerk’s office for the county where the property sits. If you cannot afford fees, ask the clerk about the civil filing fee waiver forms and standards.
- Provide notice and serve all interested parties. Serve the trustee/sheriff, the beneficiary under the deed of trust, all known junior lienholders, the former owner(s) of record, and anyone with a recorded interest. Washington law requires service consistent with civil procedure rules; this often includes personal service or service by certified mail, and sometimes publication if a claimant cannot be located. The court will expect proof of service before ruling.
- Ask the court for a hearing (if required) and attend. Many courts will set a hearing so competing claimants can appear. Be prepared to explain your computation and provide documentary proof of priority and entitlement. If nobody contests, the court may grant the petition on papers alone.
- Obtain an order and secure disbursement. If the court grants your petition, it will enter an order directing the custodian of the funds (often a county treasurer, the trustee, or the sheriff) to pay you the specified amount. You will likely need to submit the court order to the custodian and follow its procedure (warrant, claim form, or similar) to receive the money.
- Expect potential challenges and holds. The court may hold funds if competing claims exist (other lienholders, judgment creditors, child support liens, tax liens, bankruptcy trustee demands). Federal tax liens or bankruptcy stays can complicate or delay disbursement.
Practical checklist of documents to gather
- Trustee’s deed or sheriff’s deed and recorded deed(s) of trust
- Trustee’s sale accounting or clerk’s sale statement with detailed receipts
- Recorded chain of title and lien search to identify junior/senior liens
- Affidavit of petitioner identifying themselves and explaining the claim
- Copies of any payoff letters, releases, or satisfaction documents
- Identification of all parties to be served with current addresses
Timing and deadlines
Time limits can matter. For example, competing claimants may assert statutory or equitable rights. Washington’s Deeds of Trust chapter and court decisions set practical timeframes for raising claims after sale. Because specific deadlines can vary with the facts, file as soon as you identify a surplus to avoid losing rights or dealing with intervening claims.
What to expect at the hearing
The court will (1) confirm the accounting and that a true surplus exists, (2) determine the relative priority of claims, (3) weigh any defenses or competing claims, and (4) enter an order directing payment. Bring original documents or certified copies. If another claimant appears with superior rights, the court may split or hold funds pending final resolution.
When the county treasurer or trustee pays out
After you submit the court order to the custodian of funds (often the county treasurer or the trustee/sheriff), follow that office’s payout procedure. They may require an additional claim form, identification, or a short waiting period. If taxes, child support, or federal liens attach, the custodian may withhold payment until the issues resolve.
When you should consider help from an attorney
If competing claimants exist, if lien priority is unclear, or if the amount is significant, an attorney with foreclosure or real property experience can help prepare pleadings, establish priority, and represent you at contested hearings. If bankruptcy or federal tax liens are involved, get counsel promptly.
Disclaimer: This information is educational only and is not legal advice. It does not create an attorney–client relationship. For advice about your specific situation, contact a licensed Washington attorney.
Helpful Hints
- Start by obtaining the trustee’s deed and the sale accounting—these documents prove whether a surplus exists.
- Run a current title/lien search. Knowing all recorded claims helps you identify who must be served and who might oppose your petition.
- Prepare a clear, short petition with exhibits and an affidavit that walks the judge through the math behind the surplus calculation.
- Serve all interested parties promptly and keep proof of service. Failure to serve a required party may delay or invalidate recovery.
- Ask the court clerk which local forms and procedures the county requires for special proceedings—practice varies by county.
- If someone claims a superior right (tax lien, child support, federal lien), be ready for possible delays and consult an attorney.
- If you cannot locate a party to serve, ask the court about substituted service or publication—the court may allow alternative notice steps.
- Document everything: emails, letters, payoff quotes, and calls. The court values clear documentary proof over anecdotes.
- Consider small-claims or simplified procedures only if the county permits them for the amount involved; often a superior court special proceeding is the right path.
- Keep copies of the court’s disbursement order and the custodian’s payment receipts for your records and tax reporting.