Overbid vs. Surplus vs. Excess Proceeds
At a Tax Deed Auction, if the high bid is more than the amount owed for back taxes, that amount is called an Overbid. This term is not necessarily interchangeable with surplus or Excess Proceeds. However, you will see counties using one or more of those words to describe ‘what is left over after the county is paid’.
The overbid amount does not belong to the county. The county takes only the property tax and interest owed and that amount is included in the opening bid. Therefore, as long as an auction gets a bid, the county is paid and the rest is the Overbid. The overbid is owed to Superior Lien Holders and the Previous Owner of the property (who owned the property at the time of the tax deed sale).
NEW STATUTE AS OF OCT 1, 2018
Previously, there was no true set time limit that a lien holder had to put in a claim for the surplus. Therefore, if there was a mortgage or large liens on a property, previous owners of the property had little chance of ever seeing the surplus money because superior lien holders take precedence over the property owner. NOW, lien holders have a tight, set deadline of 120 days to put in their claim or they lose it forever.
There is one exception to that law: The IRS or other Federal liens. They have NO deadline.
The previous owner is not under this 120 Day deadline. If there are no liens or mortgages on a property, the previous owner can claim the surplus right away. Note: Even if there are liens, the previous owner does not need to wait until they are paid before submitting a claim… submit it right away and then once the liens are paid, the county will address your claim. The waiting period just means the county will not consider previous owners until the lien holders have a chance to put in a claim for the surplus during the waiting period.
SENDING SURPLUS TO THE STATE: Some counties may have a one year waiting period when at that time, they forward all unclaimed money to the state of Florida. Some counties have no time limit and keep the money with them for many many years. Of course, the person owed the money can always claim it from the state later on, but you, as an asset locator, want to get them as a client before the money goes to the state because the state puts a cap on the percent an asset recovery company can charge the client.