Claiming Excess Proceeds or Surplus After a Trustee’s Sale & What You Need To Know.
Now that real estate values have recovered in the Phoenix area, it is becoming more common to have surplus funds or excess funds available after a trustee’s sale. Arizona has a statute, A.R.S. § 33-812, that governs the distribution of funds generated by a trustee’s sale. In order to determine if any excess funds exist for distribution, the costs and expenses of the trustee’s sale as well as all liens need to be paid. The Trustee has up to 90 days to make distribution per A.R.S. §33-812 (K).
Commonly, the Trustee will distribute any excess funds to the county treasurer. Where the Trustee elects to do this, the Trustee must then file a civil lawsuit in the superior court of the county and mail notice of the lawsuit to all persons who may have an interest in the property as required by A.R.S. §33-809. Persons who wish to make a claim to the surplus funds must file an application for distribution in this civil action and must give notice of same to all interested persons. Any person or anyone having a claim to the funds can respond to an application for distribution within 45 days of the latest mailing. Where needed, the court can schedule an evidentiary hearing to decide competing claims.
If no application for distribution is filed within two years, the surplus funds are deemed abandoned and will be paid to the Arizona Department of Revenue.
There are businesses that “assist” people to recover their excess proceeds. The fees of such business are regulated by A.R.S. §33-812 (P). In most cases, such services are not needed. Forms and instructions for filing an application for distribution can be found on the Maricopa County Self Help Center website: www.maricopa.gov The real estate lawyers at Platt & Westby, P.C. can also assist with this process—often for reasonable flat fees. Call today 602-277-4441.