The foreclosure of a tax lien is authorized under Section 34 for the Texas Tax Code. Pursuant to the Code, a person conducting the foreclosure of a tax lien (generally a constable) shall pay any excess proceeds, within 10 days of the sale, to the clerk of the court that issued the order authorizing the sale.

If the amount of the excess exceeds $25.00, the clerk of the court shall send written notice to the former owner of the property, at the owner’s last known address, before the 31st day after the date the excess proceeds were received by the clerk.

The excess proceeds are kept for a period of two years from the date of the sale, unless otherwise ordered by the court. Thus, the former owner has up to two years to claim the excess proceeds.

In order to claim the excess proceeds, the former owner may file a petition in the court that ordered the sale within two years from the date of the sale. A copy of the petition must be served on all parties to the underlying action, pursuant to Rule 21a of the Texas Rules of Civil Procedure. Upon the filing of the petition and notice to all interested parties, a hearing is generally held whereby the court orders the excess proceeds be paid according to priority, as established by the Code.

Recovering excess proceeds following the foreclosure of a tax lien can be a daunting process. It is imperative that the process is started as soon as possible so as to eliminate the chance of missing the deadline and forfeiting the excess proceeds. The real estate attorneys at The Farah Law Firm, P.C. have the knowledge and experience to help you obtain any excess proceeds you may be entitled to. If your real property has been the subject of the foreclosure of a tax lien do not hesitate to contact the attorneys at The Farah Law Firm, P.C. to discuss the process of recovering any excess proceeds.