State Guide
Alabama Excess Proceeds Guide
Educational overview of excess proceeds, surplus funds, and related claim processes in Alabama.
What Excess Proceeds May Be Called In Alabama
Alabama's tax sale statute, Alabama Code section 40-10-28, uses the term "excess" or "excess funds" to describe the amount received at a tax sale auction above the delinquent taxes, interest, penalties, and costs. These funds are deposited with the county probate judge, who acts as custodian. County officials and practitioners commonly refer to these as "tax sale excess," "tax deed surplus," or "overage funds." In mortgage foreclosure sales — Alabama permits both judicial and non-judicial (power of sale) foreclosures — surplus is generally called "foreclosure surplus" or "sale surplus." Alabama's system is distinctive in placing the probate judge, rather than the circuit court clerk or sheriff, at the center of tax sale excess fund administration.
Common Sale Types In Alabama
Alabama generates excess proceeds primarily through tax sales conducted by the county revenue commissioner or tax collector. Tax sales occur annually after the statutory delinquency period, and properties are sold to the highest bidder at public auction. The winning bid exceeding the tax delinquency becomes excess deposited with the probate judge. Alabama also produces surplus through non-judicial mortgage foreclosures under a power of sale clause in mortgages and deeds of trust — Alabama's dominant foreclosure method — and less commonly through judicial foreclosures. Additional sources include judgment lien executions via sheriff sale and condominium and homeowner association lien foreclosures.
Who May Need To File
Under Alabama Code section 40-10-28, the former property owner at the time of the tax sale is the primary party entitled to excess funds. Mortgagees and other lienholders whose interests were recorded before the tax sale may also file a claim. Heirs of deceased former owners must establish heirship through the probate court or an affidavit of heirship. Judgment creditors with recorded judgments may assert a claim in order of lien priority. Claims for tax sale excess must generally be filed with the probate judge, who reviews the claim and issues payment to the party entitled to receive the funds. Alabama imposes a 3-year limitations period for claims to tax sale excess funds; unclaimed funds may escheat to the county or state after that period.
Why County Rules Matter
Alabama's 67 counties each process excess funds through the probate judge's office, and procedures differ. Jefferson County (Birmingham), Mobile County, Madison County (Huntsville), and Montgomery County — the state's larger counties — have more formalized claim procedures and may maintain public lists of available excess funds. Rural counties may have less formal administrative processes. The probate judge typically has discretion in how claims are processed, verified, and approved. Factors that vary by county include: the specific claim form required, whether the probate judge requires a formal petition or accepts an administrative claim, notarization requirements, and whether a small hearing is required before disbursement.
Documents Commonly Needed
Alabama excess fund claims typically require: (1) a written claim or county-specific claim form filed with the probate judge; (2) the tax sale certificate or tax deed showing the sale date and amount; (3) a copy of the recorded deed proving ownership at the time of sale; (4) government-issued photo identification; (5) if the former owner is deceased, Letters Testamentary or Letters of Administration from the probate court; (6) for lienholder claims, a certified copy of the recorded mortgage or lien and an updated accounting; and (7) a completed IRS Form W-9.
Disclaimer: National Excess Proceeds Exchange is not a law firm, does not provide legal advice, and is not a government agency. Information provided on this website is educational only. Recovery of excess proceeds is not guaranteed. Eligibility, documentation, deadlines, and procedures vary by state, county, agency, court, and case facts. Visitors should consult qualified legal counsel when legal advice is needed.