1. Who holds the funds
Tax Code 34.02(d) says the officer conducting a sale under Section 33.94, 34.01, or 34.0101 pays any excess, after the amounts in 34.02(b), to the clerk of the court that issued the warrant or order of sale. Section 34.021 covers a sale for foreclosure of a tax lien under Texas Rule of Civil Procedure 736: the person conducting that sale pays any excess to the clerk of the court that issued the order, within 10 days of the sale. Sections 34.03 and 34.04 then apply to that excess.
2. Notice and the two-year window
Under 34.03(a), if the excess is more than $25, the clerk sends written notice to the former owner, at the last known address in the court records or another source reasonably available to the court, before the 31st day after the clerk receives the funds. The notice states the amount, the right to claim under 34.04, and includes a copy or the complete text of 34.03 and 34.04. The clerk keeps the excess paid in under 34.02(d) for two years after the date of the sale, unless the court orders otherwise. Under 34.03(b), if no claimant establishes entitlement within that period, the clerk distributes the excess to each taxing unit that took part in the sale, in proportion to its taxes, penalties, and interest.
3. How a claim is made and paid
Under 34.04(a), a person, including a taxing unit and the Title IV-D agency, may file a petition in the court that ordered the seizure or sale, before the second anniversary of the date of the sale. The petition may be filed under the cause number of the underlying suit. Section 34.04(c) sets the order of payment for each party that establishes its claim: first the tax sale purchaser, if the sale was adjudged void and the purchaser prevailed against the taxing units under Section 34.07(d) by final judgment; then a taxing unit for taxes, penalties, or interest that became due or delinquent on the property after the judgment, or that were omitted from the judgment by accident or mistake; then other lienholders, in the order applicable law sets; then a taxing unit for unpaid amounts adjudged due under the judgment that the sale did not satisfy; then each former owner, as that person’s interest appears, if the former owner was a defendant in the judgment, is related within the third degree by consanguinity or affinity to such a defendant, or acquired that defendant’s interest by will or intestate succession. Section 34.04(c-1) bars a claim by a former owner who acquired an interest after the date of the judgment, except for the relative and will or intestate succession cases in (c)(5).
4. Limits on assignments and fees
- 34.04(f). A person may not take an assignment of an owner’s claim unless the assignment is taken on or after the 36th day after the excess proceeds are deposited in the registry of the court, is in writing and signed by the assignor, is not the result of an in-person or telephone solicitation, and pays the assignor on that date at least 80 percent of the assignor’s claim. The document must contain the sworn statement the subsection lists, including that the assignment was voluntary and that the consideration was paid in full that day.
- 34.04(i). A fee an attorney charges to obtain excess proceeds for an owner may not be greater than 25 percent of the amount obtained or $1,000, whichever is less. A person who is not an attorney may not charge a fee to obtain excess proceeds for an owner.
- 34.04(j). The amount the court may order paid to an assignee may not exceed 125 percent of what the assignee paid the assignor on the date of the assignment.
Read the current statute before relying on these limits; it is linked below.
5. What this means for outreach
The ban on assignments from in-person or telephone solicitation in 34.04(f) bears directly on how a recovery team contacts a Texas former owner. Read it with the federal telephone rules in the skip tracing laws guide, and get legal advice on your process. From the live Locate Next surplus page: “Check each number’s Do Not Call status before outreach. A status does not decide what contact is allowed.”
6. Finding the Texas former owner
Start from the court case: the style names the defendants, who are the former owners in the 34.04(c) order. If the owner was a company, the Texas Comptroller and Secretary of State filings are covered in how to find who owns a Texas LLC. For the case-by-case method, see finding a former owner for a surplus case. Washington’s tax foreclosure excess rule, read from RCW 84.64.080 on October 22, 2026, is the Washington guide. Michigan, North Carolina, and Ohio were read the same day: Michigan remaining proceeds, North Carolina tax foreclosure surplus, and Ohio excess proceeds.
Common questions
Who holds tax sale excess proceeds in Texas?
The clerk of the court that ordered the sale, under Texas Tax Code 34.02(d).
How long do I have to claim Texas excess proceeds?
Under 34.04(a), the petition must be filed before the second anniversary of the date of the sale. Under 34.03(b), if no claimant establishes entitlement in the two-year period, the clerk distributes the excess to the taxing units that took part in the sale.
Can a surplus finder charge a fee in Texas?
Under 34.04(i), a person who is not an attorney may not charge a fee to obtain excess proceeds for an owner. An attorney fee may not be greater than 25 percent of the amount obtained or $1,000, whichever is less.
Can a former owner assign the right to Texas excess proceeds?
Under 34.04(f), only on or after the 36th day after the excess is deposited in the registry of the court, in a signed writing, not from in-person or telephone solicitation, for at least 80 percent of the claim paid on that date, and with the sworn statement the subsection requires.
Who is paid first from Texas excess proceeds?
Section 34.04(c) starts with a tax sale purchaser whose sale was adjudged void and who prevailed under Section 34.07(d). It ends with former owners who were defendants, relatives within the third degree of such a defendant, or a person who acquired that defendant’s interest by will or intestate succession.
Sources
- Texas Legislature, Tax Code Chapter 34, tax sales and redemption. Checked October 22, 2026.
This page is general information, not legal advice.