Claiming Surplus Funds
Have you received a letter notifying you that the Clerk of Superior Court is holding surplus funds for you?
When property is foreclosed upon, generally because of a defaulted mortgage, or sometimes in the event of unpaid property taxes or homeowner’s association fees, it is sold at public auction. The proceeds of the sale are used to pay the outstanding mortgage of the lender, any property taxes due, any judgment liens, and of course the attorneys involved. If there are funds left over, those are the surplus funds. Those belong to the property owner(s).
Surplus funds are paid in to the local clerk of court, awaiting a claim by anyone entitled to them. The North Carolina General Statutes provide that a special proceeding may be instituted before the clerk of the superior court by any person claiming said money.
What this means is that the clerk of the Special Proceedings Division of the Superior Court in the local county holds a hearing to make sure if the person claiming the funds is entitled to them.
In order to claim surplus funds, one has to file a Petition for Surplus Funds, explaining how you are entitled to those funds. Unfortunately, there are no forms available for this process; generally speaking, one should engage an attorney to assist in the drafting and filing of the petition, and representing you in court for the hearing held by the clerk.
The costs associated with claiming surplus funds to which you may be entitled includes a filing fee of $120.00 in Wake County; the attorney fees for the lawyer representing you; cost of service to anybody else who may have an interest in the funds; and a limited title search of your property to ensure that there are no other outstanding claims to be paid.
Wake County has recently been sending letters of notification regarding surplus funds,
some from foreclosures as long as two years ago. If you have received such a notice, you may wish to contact an attorney experienced with the process to discuss claiming money being held for you.