When a tax lien goes unpaid and the property is headed to court foreclosure, the lien buyer can now also ask the court for an 'excess proceeds sale' (a public auction that can return leftover money to the owner), the request can be made any time before the judgment takes effect, and the auction's minimum bid is now the amount the court sets.
Official title: judicial foreclosure; excess proceeds sale
- September 12, 2026
What changes
BeforeOnly the property owner whose right to redeem was being foreclosed could ask the court to decide whether selling the property to recover excess proceeds is reasonable.
NowThe property owner or a certificate of purchase holder (the person who bought the tax lien) may make that request.
BeforeThe text did not state when the request had to be made.
NowThe request may be made at any time before the court's judgment is effective under court rules, and it may be included in the lawsuit to foreclose the right to redeem.
BeforeThe minimum and opening bid at the auction was the total of all amounts the lien holder reported to the court, including other recorded state liens on the property.
NowThe minimum and opening bid is the amount the court sets in its judgment: the lien holder's filing costs and estimated attorney fees, the lien amount and statutory fees with 16% yearly interest, the estimated cost of the sale, and any other reasonable fees the court decides.
BeforeThe auction had to be held no later than 60 days after the judgment.
NowThe 60-day limit still applies, except as otherwise provided in the article of law on these sales.
BeforeAny party in the foreclosure case could sue the entity running the sale if it did not distribute sale money within 90 days.
NowOnly a party in the case that is entitled to part of the sale proceeds may bring that lawsuit.
Who it affects
- Property owners facing foreclosure of their right to redeem a tax lien
- Tax lien certificate of purchase holders
- Bidders at excess proceeds sales
- Qualified entities that conduct the sales
- Superior courts and county treasurers
What you need to do
Nothing.
What the law doesn't answer
- Whether these changes apply to foreclosure cases already filed before the law takes effect
- What 'other reasonable fees' the court may add to the opening bid
- Which court rules decide when a judgment becomes effective
This summary describes the law as enacted. Later laws, court rulings or referendum petitions can change the picture. Check the official text for the current wording.