Is Surplus Funds Recovery Legit? Red Flags, Scams and the Fee Caps in Every State
About this article: “Marcus” is TaxLienSimple's educational narrator. First-person stories and dollar examples are illustrative scenarios written to explain real tax-sale concepts, they are not the personal trading history of a specific investor. Rate and legal information is sourced separately to official statutes and government records (see About and each guide's citations).
TL;DR
- →Surplus funds are real. When a property sells at a tax or foreclosure sale for more than was owed, counties and courts hold the extra money for the former owner and lienholders, and they publish lists of it.
- →Surplus funds recovery is a legitimate business when it is done honestly: the agent finds the owner, explains the money, says the owner can claim it for free, and charges a fair fee only when the money is paid.
- →Several states regulate the fee. Indiana and Nevada cap it at 10 percent, Florida caps mortgage foreclosure surplus at 12 percent, Utah allows 20 percent only after 24 months with the state, and Texas lets only attorneys charge for tax sale excess proceeds.
- →The red flags are consistent: upfront fees, hiding the free option, refusing to name where the money is held, fees above the state limit, and pressure to sign a deed or blank form.
- →If you get a letter, you can check it yourself in minutes. Look up the record on the county's own list or ours, and call the county office that holds the money.
First, is the money itself real?
Yes. Surplus funds, also called excess proceeds, excess funds or overages, are a normal part of how tax sales and foreclosures work. When a property sells for more than the taxes, loan and costs owed on it, the office that ran the sale holds the difference. Depending on the state, that is the county clerk, the treasurer, the tax commissioner, the clerk of court or a trustee.
Counties publish lists of this money because the law requires them to try to return it. Many owners never claim it because the notice went to the property they lost, they moved, or the owner died and the family never heard about it. TaxLienSimple reads these lists from 342 counties in 21 states. Right now that is 30,573 records worth about $414.2 million.
So if you receive a letter saying a county is holding money from the sale of your former property, it may well be true. The question is whether the person writing to you is offering a fair deal.
Is the surplus funds recovery business legitimate?
It can be. A recovery agent does real work: finding owners who have moved, tracing heirs when the owner has died, sorting out which lienholders come first, and handling the paperwork and follow-up with the county or court. Many owners would rather pay a fair fee than do that themselves, especially in estate cases.
It is also a business that attracts abuse, which is why states keep adding rules. The Washington Attorney General has taken action against a company accused of charging former homeowners up to 67 percent of their foreclosure surplus. Texas now lets only attorneys charge a fee to recover tax sale excess proceeds. Colorado made paid agreements to recover foreclosure overbids from the public trustee unenforceable.
The honest version of the business looks like this:
- The agent tells you exactly how much is held and where.
- The agent tells you that you can claim it yourself for free.
- The fee is stated as a percentage and in dollars, and it is within your state's limit.
- You pay nothing unless and until the county or court pays you.
- The agreement is in writing, and you get a copy.
Fee caps and rules by state
These are the rules TaxLienSimple has read in each state's statute, as of October 2026. States without a cap can still refuse unfair agreements through their courts, and rules change, so check the statute before you sign anything.
| State | Fee rule | Other key rule | Statute |
|---|---|---|---|
| Texas | Only attorneys may charge; 25% or $1,000, whichever is less | 2-year claim window | Tex. Tax Code 34.04(i) |
| Indiana | Max 10%, unless $50 or less | Written, signed, states the amount and owner's share | Ind. Code 6-1.1-24-7.5 |
| Nevada | Max 10% of what remains | Written and signed agreement | NRS 361.610 |
| Florida (foreclosure) | Max 12% | Assignment filed with the court | Fla. Stat. 45.033 |
| Utah | None for 24 months with the state, then max 20% | Contingent fees need a PI license | Utah Code 59-2-1351.1(7) |
| California | No cap in the statute | Assignment must disclose the claim's value; owner told it is free | Cal. Rev. & Tax. Code 4675 |
| Oklahoma | No cap | Assignments made after the resale begins are void | 68 O.S. 3131(D) |
| Colorado (foreclosure) | Not enforceable | Inducing a paid agreement is a misdemeanor | C.R.S. 38-38-111 |
| Arkansas | n/a | Only the former owner or a parent, child or sibling can claim | Ark. Code 26-37-205 |
| Georgia, Ohio, Maryland | No cap found | Courts can still refuse unfair agreements | O.C.G.A. 48-4-5; ORC 5721.20; Md. Tax-Prop. 14-818 |
Watch the lesson: TaxLienSimple Academy
Scams and guru traps to avoid
Public auctions run on public rules. A guaranteed return, pressure, or proof you cannot verify is enough reason to walk away.
Red flags in a surplus funds letter or call
If any of these show up, slow down and check the record yourself before you sign anything.
- They ask for money up front. No one needs to be paid in advance to file a claim with a county or court.
- They will not tell you the amount or where it is held. That information is public. Hiding it means they want you to sign before you can check.
- They say you must use them. You never have to. You can file yourself, for free.
- The fee is above your state's limit. In Florida foreclosure cases, more than 12 percent is a red flag. In Indiana and Nevada, more than 10 percent.
- They want you to sign a deed, a power of attorney or a blank form. A surplus claim does not require you to give up property or sign anything blank.
- The deadline is suspiciously urgent. Deadlines are real, but you can check yours on the county's list in minutes.
- They contacted the wrong person. If the letter is addressed to the auction buyer, or to a relative without mentioning probate, the agent has not done the basic research.
How to check a surplus funds letter in five minutes
1. Find the record. Search the county's own surplus or excess proceeds list, or our free surplus funds list, by county. Each of our records links to the official source.
2. Confirm the amount and the deadline. If the letter's numbers do not match the county's list, ask why.
3. Call the office that holds the money. The clerk, treasurer or tax commissioner can tell you whether a claim has been filed and what form to use.
4. Read the agreement. It should state the surplus amount, the fee in dollars and as a percentage, and that you could claim for free.
5. Decide. If the claim is simple and you have the time, file it yourself. If it is complicated, for example an estate or competing liens, a fair agent or an attorney can be worth the fee.
If you are thinking about starting a recovery business
The same rules that protect owners protect honest agents. Agents who say the free option up front, charge only on success and stay within the state's limit build trust and referrals. Agents who do not end up in Attorney General press releases.
If you are considering the business, start with our guide to becoming a surplus funds recovery agent, which covers the state rules, startup costs and the real numbers on county records, and use the Fair Recovery Kit for an honest first letter.
Watch how it works
A narrated walkthrough: what surplus funds are and how recovery agents earn a fee, then find open surplus funds from county lists, check the parties and state rules, and track the claim to payout.
Read the transcript
Before I show you the dashboard, here's what surplus funds are, and why people make a living from them.
When someone falls behind on property taxes, the county can sell the property at auction.
Say the owner owed eight thousand dollars, and the home sold for ninety-five thousand.
The county keeps what it's owed. The other eighty-seven thousand is surplus, and by law, it belongs to the former owner.
Most owners never find out. They've moved, or they don't know the money exists. And if nobody claims it in time, it can go to the state.
That's where you come in. You find the owner, check that no one is owed ahead of them, and help them file the claim. They get their money, and you earn an agreed fee.
Owners can always claim for free on their own, and many states limit your fee. So the work is finding them, and making it easy.
TaxLienSimple tracks over one hundred and ninety million dollars of it across eighteen states, updated every day. Here's how to find a record, and work it all the way to payout.
This is TaxLienSimple. In the next few minutes, I'll find a surplus fund, check that it's worth working, and track it all the way to payout.
Start in County Data, on the Surplus funds tab. Every number here comes from the county's own list, and you can see how much is still open.
Open a state to see each county: the total, what's still open, the largest record, and the nearest deadline.
Search records takes you straight to those records.
Here in Research, you can narrow it down. I'll keep the open records, set a deadline within ninety days, and sort by the largest amount.
Open a record to see the detail.
Here's the amount, the claim deadline, and the former owner. Below that is everyone on the case. Lienholders and government claims can be paid before the owner, so check them first.
Every record shows the state's rules: how long the claim window is, any limit on your fee, and what you must tell the owner.
If it's worth working, add it to My claims.
Your claims live on one board, by stage. The top shows what you're working, your expected fees, and what's due this week.
Open the claim. The deadline countdown sits at the top.
From here you can search for the former owner by name and mailing address. Anyone matching the auction buyer is left out, because that's the wrong person.
Note who you're working with, and set a follow-up date. You'll get a reminder email that morning.
Every call, email, and letter goes in the contact log, so you never lose track.
Enter the fee you agreed. TaxLienSimple holds it to the state's limit, and shows what you'll earn.
Print a first letter in one click. Every letter tells the owner they can claim from the county for free.
The recovery agreement prints the state's fee limit and the required disclosure, and it won't print a fee above that limit.
Keep the paperwork here: photo ID, death certificates, the signed agreement. Only you can see it.
Move the claim along as it progresses. When the county pays, record the amount and your fee.
That's the whole workflow, from finding the money to getting paid, in one place.
Frequently Asked Questions
Common questions about whether surplus funds recovery is legitimate.
Frequently Asked Questions
Is the surplus funds business legit?↓
Yes, when it is done honestly. A legitimate agent finds the owner, explains where the money is held, says the owner can claim it for free, charges only when the money is paid and stays within the state's fee limit.
Are foreclosure overages real?↓
Yes. When a foreclosed property sells for more than the debt and costs, the surplus is held by the clerk of court, a trustee or, in Colorado, the public trustee, and is paid to lienholders and then the former owner.
Is it a scam if someone says I have surplus funds?↓
Not necessarily. The money may be real. Check the record on the county's own list, confirm the amount and deadline, and be wary of anyone who asks for money up front or will not say where the funds are held.
How much do surplus recovery companies charge?↓
It varies by state. Indiana and Nevada cap fees at 10 percent, Florida caps foreclosure surplus at 12 percent, and Texas allows only attorneys to charge. In states without a cap, fees vary widely, so compare and read the agreement.
Can I claim surplus funds myself?↓
Yes. You can always file a claim directly with the county, court or trustee holding the money, at no charge for a basic claim.
What should a fair surplus recovery agreement say?↓
The surplus amount, the fee in dollars and as a percentage, that the owner could claim for free, that the fee is paid only from money actually recovered, and any disclosures your state requires.
Keywords this article targets
More in Surplus Funds
- How to Claim Surplus Funds in Florida: Tax Deed and Foreclosure Surplus, Step by Step →
- How to Claim Surplus Funds After a Foreclosure: A Step-by-Step Guide for Former Owners →
- Surplus Funds Courses Compared: Overages Blueprint vs Surplus Funds Profit System (2026) →
- How Long Does It Take to Get Surplus Funds? Claim Windows and Payout Times by State →
- Tyler v. Hennepin County, Three Years On: What It Means for Surplus Funds and Home Equity →
- Tax Sale Overages vs Foreclosure Surplus Funds: Who Holds the Money and Who Can Claim It →
- Surplus Funds When the Owner Has Died: How Heirs Claim, and What Agents Need to Know →
- California Excess Proceeds: How the Claim Works in Los Angeles, San Diego, Orange and Every County →
- Georgia Excess Funds: How Tax Sale Claims Work Under O.C.G.A. 48-4-5 →
- Texas Excess Proceeds: How Tax Sale Claims Work, and Why Only Attorneys Can Charge →
Learn more in the TaxLienSimple Academy
Ethics and surplus funds
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