Tag: property tax

Excess Tax Sale Funds in Georgia: A Quick Review

Posted by Jeff on

In Georgia, properties can be auctioned if the owner fails to pay property taxes. When a property is sold at a tax sale for more than the amount owed in taxes, the remaining funds are considered excess funds. These funds are typically held by the county tax commissioner’s office or the sheriff. The Georgia statute that addresses excess tax sale funds is OCGA § 48-4-5.

How long do you have?

Excess funds will be maintained for five years from the date of sale under OCGA § 48-4-5(c) before being turned over to the Georgia Department of Revenue, Unclaimed Property Division.

Who is Entitled to Excess Funds?

Generally, those who may be entitled to claim excess funds include:

  • The property owner at the time of the tax sale: If the property owner can prove ownership and has not relinquished their rights, they may be entitled to the excess funds.
  • Lien holders: Mortgage companies or other lien holders with a recorded interest in the property at the time of the tax sale may also be entitled to claim the funds.
  • Other interested parties: In some cases, other parties with a legitimate interest in the property may be able to claim excess funds.

Excess tax sale funds are paid first to lienholders with a recorded interest on the day of the tax sale (in the order the interests were recorded) and then to the property owner at the time of the tax sale.

Claim Process

Claiming excess tax sale funds can be a bureaucratic and frustrating process. It involves providing documentation to prove ownership or interest in the property and filing a claim with the county tax commissioner’s office. The specific requirements and procedures vary by county.

Claiming excess tax sale funds can be challenging for several reasons:

  • Documentation requirements: Proving ownership or interest in a property can be difficult, especially if the property has changed hands multiple times or records are incomplete.
  • Bureaucratic hurdles: Like many government agencies or large corporations, filing a claim can be time-consuming and frustrating, with unnecessary bureaucratic obstacles.

If you are entitled to excess tax sale funds, here are some tips:

  • Act promptly: Research the time limits for filing claims in your county and act quickly.
  • Gather documentation: Collect relevant documents, such as deeds, mortgages, and property tax records.
  • Consult an attorney: An attorney can help you navigate the legal process and protect your rights.

Would you like to know more about a specific aspect of excess tax sale funds in Georgia, such as the time limits for filing claims or the documentation required? Please call us at 404-382-9994; we’ll happily answer any questions.  

Can a tax commissioner apply excess funds to post-tax sale property taxes?

Posted by Jeff on

Iglesia Del Dios Vivo Columna Y Apoyo De La Verdad La Luz Del Mundo, Inc. v. Downing, 321 Ga. App. 778 (2013) addressed this issue, and the answer, quite simply, is NO. (Bonus points for being able to say the plaintiff’s name in that case three times fast.)

The guiding statute is O.C.G.A. § 48-4-5, which provides that any excess funds existing “after paying taxes, costs, and all expenses of a sale made by the tax commissioner” shall be distributed “to the owner or owners as their interests appear in the order of priority in which their interests exist.”

So, while a tax commissioner is authorized to apply excess funds to satisfy outstanding property taxes owed by the delinquent taxpayer that accrued before the tax sale, it can’t do so after the tax sale. This reasoning for this is that the tax deed purchaser, not the delinquent taxpayer, is liable for post-tax sale property taxes.

What about a situation in which post-tax sale property taxes accrue before the tax deed purchaser has barred the right of redemption? In this situation, the delinquent taxpayer still has possession and the tax deed purchaser doesn’t have full title. Is the delinquent taxpayer jointly liable with the tax deed purchaser? According to the Downing case, the answer is no.  Only the tax deed purchaser is liable for post-tax sale property taxes; this is regardless of whether the right to redeem has been barred.

Who Gets Excess Tax Sale Funds in Georgia?

Posted by Jeff on

Revisiting a previous post, under Georgia law, a tax commissioner holds excess funds generated by a tax sale in a fiduciary capacity, and the disbursement of those funds is governed by OCGA § 48-4-5. But, after a tax sale, if there are excess funds after paying taxes, costs, and all expenses of a sale, who gets these funds? The answer, generally, is distribution of excess tax funds is based on the right to the funds at the time of the tax sale.

When there are excess tax funds, the officer selling the property shall give written notice of the excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale, and shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist.

If there is a dispute regarding who is entitled to the excess tax funds, an interpleader is filed and the excess funds are distributed by the superior court to the intended parties, including the owner, as their interests appear and in the order of priority in which their interests exist.

Some issues that come up in regard to distribution of excess tax funds is whether a “super-lien” obtained via a redemption gives the redeeming party a right to claim the excess funds. The answer is no because a super-lien places a lien on the real property but not on the excess tax sale funds.

Another issue is when additional taxes come due after the tax sale—is the tax commissioner allowed to use the excess funds for taxes due after the tax sale? The answer is no because the tax deed purchaser is the party responsible for paying property taxes after the tax sale. The remedy for the tax purchaser is to add taxes paid to the redemption price.

And, finally, what happens if the owner of the property sells the property after the tax sale? Is the new owner entitled to the excess tax sale funds? The answer is no. Georgia law considers excess tax sale funds to be personal property; thus, these funds do not attach to the real estate. One exception is if the sales agreement contains language assigning the excess tax sale funds, then the person who sold the property loses their right to the excess funds.  Georgia Lien Services, Inc. v. Barrett, 272 Ga. App. 656 (2005).