Can a Municipality Legally Keep Your Surplus Funds?

When a home goes through foreclosure, many former owners assume everything is lost—including the money from the sale. But if the property sells for more than the debt owed, the extra money—called surplus funds—doesn’t automatically belong to the city or county. So, the question is: can a municipality legally keep those funds?

The Legal Answer: No, They Can’t Keep What’s Yours

In the past, municipalities across the U.S. often kept surplus funds, claiming them as government revenue. That changed with the U.S. Supreme Court’s ruling in Tyler v. Hennepin County (2023). The Court made it clear:

👉 Keeping more than what is owed is an unconstitutional taking of private property. This decision ensures that former homeowners (or their heirs) are entitled to any surplus funds left after foreclosure.

Why This Matters for You

The amounts at stake can be significant. For example:

If you owed $15,000 in property taxes, and your home sold at auction for $60,000, the municipality can only collect the $15,000 you owed.
The remaining $45,000 belongs to you—not the government.

This ruling protects homeowners nationwide and confirms that municipalities cannot profit from your hardship

The Reality: Many Still Miss Out

Even with this legal protection, thousands of homeowners never see their surplus funds because of:

Lack of Awareness – Many don’t know they’re entitled to claim.
Complicated Procedures – Claims often require legal filings, court petitions, or strict documentation.

Deadlines – If you don’t act in time, you can lose your right to the funds.

How Surplus Refund LLC Can Help

At Surplus Refund LLC, we make sure municipalities don’t keep what rightfully belongs to you. Our team:

Confirms if you’re eligible to claim surplus funds.
Handles the paperwork, filings, and deadlines for you.
Works to maximize your recovery, even if there are competing claims from creditors or heirs.
Keeps you informed with clear communication every step of the way.

Take Action Today

Municipalities cannot legally keep your surplus funds—but that doesn’t mean the money will automatically come to you. If your home went through foreclosure, you may be entitled to thousands of dollars.