Surplus Claim Assignment vs. Contingency Fee Agreements

Cross-jurisdiction doctrine page. Legal information, not legal advice. Last verified: 2026-06-02.

Overview

When a tax or mortgage foreclosure sale generates a surplus — a sale price exceeding the total debt, costs, and other senior claims — the former owner holds a valuable right to that excess money. Two structurally different arrangements exist for engaging a third party to help recover that surplus:

Outright assignment (claim purchase). The former owner sells or transfers the right to claim the surplus to a third party (the “assignee”), typically a for-profit recovery firm. The assignee pays the owner immediate cash consideration — often substantially less than the full expected surplus — and then collects the full surplus for its own account. The assignment is a completed transaction: the owner receives less but gets paid now; the assignee bears the risk that the claim is smaller than anticipated and captures any upside.

Contingency fee arrangement. The owner retains ownership of the surplus claim and hires an attorney or recovery agent to pursue it on their behalf, paying a percentage of whatever is recovered only if and when the claim succeeds. No money changes hands at contract signing. The owner remains the claimant; the agent is merely an agent. The owner receives the net surplus (minus the fee) after recovery.

The legal distinction is significant for at least four reasons:

1. Fee caps apply differently. Most state statutes cap the fee an agent may charge. Some caps apply only to contingency arrangements; others also constrain what an assignee may ultimately recover from the court. A few states apply different numerical caps to the two models.

2. Waiting periods and timing rules. Several states require an outright assignment to wait a specified number of days after the sale or deposit before the transfer becomes valid. Contingency agreements generally are not subject to the same waiting-period rules.

3. Fraudulent-conveyance exposure. An outright assignment is a transfer of a property right for consideration. If the price paid to the owner is grossly below the claim’s fair value — and the owner is insolvent or in financial distress — the transfer may be voidable by the owner’s creditors under state voidable- transaction law. A contingency fee arrangement typically does not create the same exposure because no property right transfers before recovery.

4. Who the attorney represents. In a contingency arrangement, the attorney owes fiduciary duties to the former owner. In an assignment model, a law firm hired by the assignee represents the assignee, not the original owner — a critical distinction for conflict-of-interest and malpractice purposes.

This page explains the legal framework for each model, the state-by-state variation in how they are regulated, and the practical implications for recovery operators and former owners.

Legal Framework

Common-law baseline: the claim is a chose in action

A surplus claim is a chose in action — an intangible personal-property right to receive a sum of money. Under common law, choses in action are generally assignable. The assignee steps into the assignor’s shoes and may pursue the claim as if the original owner had filed it.

There is no federal statute specifically governing surplus-claim assignments. The rules flow from:

• State surplus statutes (governing when and how claims may be filed, and whether assignments are recognized by the paying office).
• State voidable-transactions law (Uniform Voidable Transactions Act, UVTA, or its predecessor the Uniform Fraudulent Transfer Act, UFTA) — which governs whether the assignment itself can be unwound by creditors.
• State consumer-protection and attorney-ethics rules — which set fee caps and prohibited practices.

Constitutional anchors

The right being assigned derives from the tyler-v-hennepin-county constitutional baseline: the government may not retain surplus equity above the tax debt without just compensation. (598 U.S. 631 (2023); https://www.law.cornell.edu/supremecourt/text/22-166, retrieved 2026-06-01.) Because the surplus is a constitutionally protected property right — not merely a statutory grace — attempts by state law to restrict assignment in ways that effectively confiscate the claim rather than regulate it remain constitutionally suspect, though no court has directly addressed this angle as of last verification.

The UVTA fraudulent-conveyance framework

The Uniform Voidable Transactions Act (adopted by approximately 45 states and DC as of 2026; the remaining states follow older UFTA or common-law rules) allows a creditor to void a transfer made by an insolvent debtor for less than “reasonably equivalent value.” If a former owner with substantial pre-existing debts assigns a surplus claim worth $50,000 to an assignee for$10,000 — without being insolvent or financially distressed — that is a legitimate transaction. If the owner is insolvent at the time, the transfer could be avoided by existing creditors as constructively fraudulent.

Key elements under the UVTA:

• Insolvency requirement. Constructive fraud (no need to prove intent) requires the transferor to be insolvent at the time of, or as a result of, the transfer. A solvent former owner who simply accepts a below-market assignment payment for convenience is not easily attacked.
• Reasonably equivalent value. Courts look at all circumstances to determine whether the consideration paid was fair. A 20% payment on a $50,000 claim is likely not “reasonably equivalent value” if the claim is certain to be paid in full. A 60% payment on a contested or uncertain claim could be reasonable. The Texas assignment statute’s 80% floor (discussed below) reflects a legislative judgment about minimum adequacy.
• Actual fraud (badges of fraud). Even without insolvency, a transfer made with intent to hinder, delay, or defraud creditors is voidable. Badges include transfer to an insider, concealment, consideration grossly inadequate, transfer shortly before a judgment, and others. A lump-sum assignment payment made in private, quickly, before a pending creditor lawsuit, carries multiple badges.

Practical consequence. Operators purchasing surplus claims outright in states without a statutory safe harbor should (a) confirm the former owner’s financial condition is not distressed, (b) pay consideration that reflects something plausible as “reasonably equivalent value” under the circumstances, and (c) document the transaction carefully. The Texas model (80% minimum, sworn affidavit) provides an explicit legislative safe harbor; other states offer no such clarity.

Non-attorney prohibition and the practice of law

In Texas, the statute flatly prohibits non-attorneys from charging any fee at all to recover surplus on an owner’s behalf (Tex. Tax Code § 34.04(i)). The assignment model is the only pathway for a non-attorney entity to capture a profit: the assignee is not charging a “fee” to recover proceeds for the owner — it is recovering its own claim. This structural distinction is what makes the assignment model legally viable for non-attorney operators in Texas, while a pure contingency-fee model by a non- attorney is prohibited.

Several states (Colorado, Oregon) go further and make recovery-agent compensation agreements unenforceable or criminal regardless of how they are structured, effectively requiring any profit-seeking recovery to be done through a licensed attorney on a contingency basis — or not at all.

State-by-State Analysis

The following clusters organize states by their regulatory approach to the assignment vs. contingency distinction. Citations are to primary sources retrieved during research. States marked needs_verification have no confirmed primary source for the specific field noted.

Cluster 1 — States with tax-surplus-specific assignment rules (most explicit)

Texas — Tex. Tax Code § 34.04

Texas has the most detailed tax-surplus assignment statute in the country. (Source: https://texas.public.law/statutes/tex._tax_code_section_34.04, retrieved 2026-06-01.)

Assignment rules (§ 34.04(f)). An assignment is valid only if ALL four conditions are met:

1. The assignment is taken on or after the 36th day after the date the excess proceeds are deposited in the registry of the court.
2. The assignment is in writing and signed by the assignor.
3. The assignment is not the result of an in-person or telephone solicitation.
4. The assignee pays the assignor at least 80% of the assignor’s claim on the date of the assignment.

The assignment document must also contain a sworn statement by the assignor affirming: (A) that the assignment was voluntary; (B) the date of the assignment and that it was not earlier than the 36th day; (C) the nature and amount of consideration; (D) the circumstances of the excess proceeds; and (E) that consideration was paid in full at ≥80% of the claim.

Court cap on assignee recovery (§ 34.04(j)). The court may order the assignee paid no more than 125% of the amount the assignee paid the original claimant. So if an assignee pays $8,000 on a$10,000 claim (80%), the maximum court award to the assignee is $10,000 (125$8,000). This cap eliminates the windfall from large surplus amounts.

Attorney fee cap; non-attorney prohibition (§ 34.04(i)). An attorney may charge no more than the lesser of 25% of the amount obtained or $1,000. A person who is not an attorney may not charge any fee to obtain excess proceeds for an owner. This prohibition is why the assignment model is the standard non-attorney operator path in Texas — the assignee is not “charging a fee” but buying a claim outright.

Liability for non-compliance (§ 34.04(g)). An assignee who obtains excess proceeds without complying with § 34.04(f) is liable to the original claimant for the full amount of excess proceeds obtained plus attorney’s fees and expenses.

Practical synthesis. In Texas, the assignment model is the primary vehicle for non-attorney operators. The 36-day window prevents predatory immediate-post-sale solicitation. The 80% floor reduces but does not eliminate the operator’s margin. The 125% court cap limits that margin further. The non-attorney contingency prohibition means a former owner who wants legal help must use an attorney on contingency (≤25% or $1,000).

California — Cal. Rev. & Tax. Code § 4675

California permits assignment of tax-sale excess-proceeds claims but imposes a specific disclosure framework. (Source: https://california.public.law/codes/revenue_and_taxation_code_section_4675, retrieved 2026-06-02.)

Assignment requirements (§ 4675(b)). A party of interest may assign their right to claim excess proceeds only by a dated, written instrument that explicitly states the right is being assigned. Crucially, each party to the assignment must disclose to the other all facts they are aware of relating to the value of the right being assigned. Any assignment that fails to meet these requirements has no legal effect.

No-cost disclosure (§ 4675(c)). Any person acting on behalf of a party of interest must provide proof with the claim that (1) the amount and source of excess proceeds have been disclosed to the interested party, and (2) that party has been informed of their ability to file a claim directly with the county at no cost.

No fee cap on excess proceeds. California’s Revenue and Taxation Code imposes no percentage cap on fees or consideration paid for a tax-excess-proceeds assignment. (Do not confuse with California Code of Civil Procedure § 1582, which caps unclaimed-property heir-finders at 10% — that cap applies only after funds have transferred to the State Controller, which is a different custody stage.) An assignee can theoretically pay the owner 30% and keep 70%; what California requires is disclosure, not a specific price floor.

Timing. The assignment instrument must be signed after the tax sale (not before), ensuring the owner knows an actual surplus amount exists.

Claim deadline. Any party of interest must file within one year after recordation of the tax collector’s deed. (§ 4675(a).)

Arizona (trustee-sale track) — A.R.S. § 33-812

For mortgage foreclosures conducted as trustee’s sales, Arizona imposes a 30-day void window and a presumptive fee cap. (Source: https://www.azleg.gov/ars/33/00812.htm, retrieved 2026-06-02.)

30-day void window (§ 33-812(P)). Any agreement to assist in recovering excess proceeds entered into before the expiration of 30 days after the trustee’s sale is void and unenforceable. This applies equally to assignment and contingency agreements; neither is valid during the first 30 days.

Fee cap — $2,500 presumptive limit (§ 33-812(P)). If the fee or payment agreed upon exceeds $2,500 (excluding attorney fees and the costs of filing the claim and providing required notices), the fee is presumed unreasonable and unenforceable. A party seeking more must petition the court and bear the burden of proving reasonableness.

Attorney fees excepted. Attorney fees and statutory-notice costs are excluded from the $2,500 cap calculation, meaning a law firm can charge a full contingency fee subject only to state bar rules and reasonableness standards.

15-day notice obligation. The trustee must mail the trustor notice of any excess proceeds within 15 days of the sale’s completion (§ 33-812(B)), which reduces the information asymmetry that recovery agents historically exploited.

Tax-lien track (A.R.S. § 42-18204). For judicial tax-lien foreclosures (a separate track), the statute governs the excess-proceeds sale process but does not explicitly regulate assignment of the owner’s right or fee caps for recovery agents. needs_verification

Georgia — O.C.G.A. §§ 48-4-5 and 44-12-224(a)

Georgia has enacted a 24-month unenforceability window and a 10% fee cap under O.C.G.A. § 44-12-224(a), which governs tax-sale excess funds held in escrow by tax commissioners. (Source corroborated by county-published procedures citing this statute: https://forsythcountytax.com/tax-sales-excess-funds/, retrieved 2026-06-02.)

24-month void period. Private agreements between claimants and third parties assisting with locating claimants or requesting payment of excess funds remain unenforceable for 24 months following the date the funds were first placed in escrow. This window prevents recovery agents from signing agreements immediately after a sale.

10% fee cap. Fees charged by third parties to claimants for assisting in the recovery of excess funds shall not exceed 10% of the value of the excess being recovered.

Direct-payment rule. Excess funds must be paid or delivered directly to the owner; payment will not be made to any third party charging a fee, even pursuant to a duly-executed power of attorney.

Attorney-only county practice. Many Georgia county tax commissioners’ offices will not accept applications from entities other than attorneys licensed in Georgia. Forsyth County’s published instructions, for example, confirm this practice. Whether this restriction is legally compelled by statute or is purely administrative office practice needs_verification against the primary statute text of O.C.G.A. § 48-4-5.

Note on the 48-4-5 vs. 44-12-224 split. O.C.G.A. § 48-4-5 governs the basic priority and interpleader mechanism for tax-sale excess funds; § 44-12-224(a) applies the 10% cap and 24-month window to those same funds while they are in escrow. Reading both together is required to understand the full framework.

Florida — Fla. Stat. § 45.033 and § 45.034 (judicial foreclosure surplus)

Florida’s surplus framework is unusually detailed and explicitly distinguishes between the assignment model and a licensed surplus-trustee model. (Source: https://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0045/Sections/0045.033.html, retrieved 2026-06-02.)

Voluntary transfer / assignment (§ 45.033). To be a “qualifying voluntary transfer,” the instrument must be in writing, specify all forms of consideration, include financial disclosures (assessed value, debt, equity, and — if executed after the sale — the sale price and surplus amount), include a statement that the owner does not need an attorney or representative to recover surplus, and be filed with the court within 60 days after the certificate of disbursements is filed.

12% total compensation cap (§ 45.033(3)(d)). The total compensation paid or payable to the transferee or assignee may not exceed 12% of the surplus. This cap governs all forms of compensation (including consultation fees, processing fees, or other charges) so that the 12% cap cannot be circumvented by labeling part of the payment as a separate “consulting” fee. (Note: some commercial actors attempt to add separate fee categories to evade the cap; Florida courts retain equitable authority to examine the substance of the arrangement.)

Surplus trustee qualification. Under § 45.033(1), a voluntary transferee or assignee must qualify as a surplus trustee, or could qualify as a surplus trustee, under § 45.034. Surplus trustee qualifications (§ 45.034) include: a certificate of good standing, minimum 12 months’ experience in surplus-fund recovery, a Class “A” private investigator license under Chapter 493, $500,000 in liability insurance/cash reserves/bonding, and attorney supervision (either as a principal or full-time employee). This licensing requirement effectively means the assignment model in Florida must flow through a Florida-licensed surplus trustee entity.

Tax deed track. Florida Statute § 197.582 governs tax-deed surplus (as opposed to judicial-foreclosure surplus under § 45.032-45.033). The § 45.033 assignment framework does not directly apply to tax-deed surplus under § 197.582. On the tax-deed track, the clerk pays proceeds and surplus moves to Chapter 717 unclaimed property after one year (owner is never time-barred). The specific rules for assignments of § 197.582 tax-deed surplus claims needs_verification.

Contingency fee vs. assignment distinction in Florida. A contingency fee arrangement with an attorney does not require surplus-trustee licensure — the attorney owes duties to the client directly. The 12% cap in § 45.033 applies to assignments and voluntary transfers, not necessarily to attorney contingency arrangements, which are governed by the Florida Rules of Professional Conduct (Rule 4-1.5). Attorneys may charge more than 12% contingency fee if their arrangement is not a “voluntary transfer” of the surplus right and complies with bar rules. This creates a notable gap in the statute: a non-attorney assignee is capped at 12%, but an attorney may charge a higher contingency fee (within reason under bar rules) because the claim itself has not been assigned.

Michigan — MCL 211.78t

Michigan’s surplus statute contains the most restrictive assignment provision among the surveyed states: the right to claim remaining proceeds under MCL 211.78t is not transferable except by testate or intestate succession (i.e., death). (Source: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-211-78t, retrieved 2026-06-02.)

This prohibition means an outright assignment of a Michigan tax-foreclosure surplus claim to a for-profit recovery firm is void under the statute. A living former owner cannot sell the surplus claim to a third party. A contingency-fee arrangement under a power of attorney, where the former owner retains the claim and the agent acts as agent only, may be permissible, but this has not been confirmed against primary authority. needs_verification

Michigan’s statute also imposes a two-step procedural requirement: a Notice of Intention (Form 5743) must be filed by July 1, and a court motion must be filed February 1 – May 15 of the following year; missing either step permanently bars the claim (§ 211.78t(11) — “exclusive mechanism”). This rigid procedural framework means any claim-recovery arrangement — whether assignment or contingency — must be structured around these deadlines.

Oregon — HB 2089 (2025)

Oregon has enacted the most categorical assignment prohibition: any purported assignment of a surplus claim is void (except through bankruptcy, power of attorney, or guardianship). (Source: summarized from third-party-recovery-rules; HB 2089 (2025) §§ 5, 6, 9; primary text needs_verification against Oregon Legislature official publication.)

Oregon routes claims through the State Treasury directly, structurally eliminating the private-assignment model. Contingency fee arrangements through licensed counsel may still be permissible but the statute’s recovery model is designed to minimize the need for any intermediary. needs_verification

Colorado — C.R.S. § 38-38-111 and § 39-11.5-109

Colorado makes any compensation agreement for assistance in recovering surplus funds unenforceable while funds are held by the county. More strikingly, inducing a former owner to enter into such an agreement is a Class 2 misdemeanor. (Source: summarized from third-party-recovery-rules; Colo. Rev. Stat. §§ 38-38-111, 39-11.5-109(2)(c); primary text retrieved via https://law.justia.com/codes/colorado/2022/title-38/article-38/part-1/section-38-38-111/ , 2026-06-01.) Both the assignment model and the contingency model are effectively banned for non-attorney operators during the county-custody stage.

Cluster 2 — States that regulate through general unclaimed-property finder law

Most states have no tax-surplus-specific assignment statute. Once surplus funds escheat to the State unclaimed-property administrator (UPA), the state’s RUUPA (Revised Uniform Unclaimed Property Act) or UFUA finder-agreement provisions apply, typically imposing:

• A 10–25% fee cap (varies by state; see third-party-recovery-rules table).
• A 24-month void window: any agreement signed within 24 months of the funds being delivered to the UPA is void and unenforceable.
• Disclosure requirements: written and signed agreement disclosing the property and the owner’s net recovery after fees.

Critical point: These RUUPA caps and void windows apply only once funds reach the State UPA. During the county-treasurer or court-registry custody stage — which is when most surplus-recovery deals are actually signed — the caps frequently do not apply. States where surplus escheats to a county fund rather than the State UPA (California, Nevada, Oklahoma, South Carolina, Indiana, Missouri) may put the money entirely outside RUUPA’s reach.

Examples:

• Hawaii — 25% cap under HRS 523A-25 (unclaimed-property stage); void within 24 months of delivery. No confirmed tax-surplus-specific cap. needs_verification
• Maine — 10% cap under 33 M.R.S. § 2179 (state-held funds); void within 24 months. No tax-surplus-specific cap confirmed. needs_verification
• North Carolina — 20% cap under G.S. § 116B-78 (reaches “surplus funds in a special proceeding”); Treasurer registration and PI license required since January 1, 2022. Void from distributable until 24 months after Treasurer delivery. Attorney agreements are excepted from certain finder restrictions under § 116B-78.

Cluster 3 — States with statutory assignment authorization and minimal restriction

• Virginia — Va. Code § 58.1-3967 expressly names “assigns” as entitled to excess proceeds. There is no confirmed percentage fee cap. VCPA § 59.1-200.1 targets foreclosure-rescue fraud (advance fees/arbitration clauses), not surplus assignments.
• West Virginia — W. Va. Code § 11A-3-65 extends surplus to the owner’s “assigns.” No confirmed cap. Consumer-protection backstop under ch. 46A.
• South Carolina — S.C. Code § 12-51-130 provides that overage may be “claimed or assigned according to law.” No confirmed fee cap. Escheat to county general fund after five years.

Cluster 4 — States where no surplus exists or the model is structurally inapplicable

• Iowa — no surplus by design (county retains full bid; no excess-proceeds pool).
• Illinois (historically) — the Indemnity Fund model under 35 ILCS 200/21-305 historically substituted for a surplus return; HB4537 (2026) is reforming this. Surplus-claim assignment framework needs_verification pending the new statute’s implementation.

Deal Structures / Practical Implications

For a recovery operator considering an outright assignment purchase

1. Check whether assignment is even permissible. Oregon: void. Michigan: void except by succession. Colorado: unenforceable (and inducing = misdemeanor). Know the jurisdiction before structuring the deal.

2. Respect waiting periods. Texas: no valid assignment before 36 days after court deposit. Arizona: void if signed within 30 days of the trustee’s sale. Georgia: unenforceable for 24 months (functionally, a contingency or attorney-only model is the only option during this window). California: signed after the sale, not before.

3. Price the claim at a level that withstands scrutiny. Texas mandates ≥80% to the owner. In states without a floor, pay enough to avoid UVTA constructive-fraud exposure if the owner is in financial distress. A purchase at 20–30% of a near-certain claim, from an owner with creditor pressure, is an avoidance target.

4. Comply with disclosure requirements. In every state: written, signed. In California: disclose amount and inform owner of free-filing option. In Florida: disclose assessed value, debt, equity, sale price, and surplus. In Texas: include sworn affidavit. Failure invalidates the assignment; in Texas it creates damages liability.

5. Watch the court’s cap on your recovery. In Texas, the court will award the assignee no more than 125% of what was paid to the original claimant. On a $10,000 claim where$8,000 was paid, the cap is $10,000. Large surplus amounts do not produce proportionally larger returns.

6. Avoid solicitation triggers. Texas voids any assignment resulting from an in-person or telephone solicitation. Many state consumer-protection statutes (WA ch. 19.86, MA ch. 93A) treat high-pressure solicitation of foreclosure surplus as a UDAP violation.

For an attorney or licensed agent considering a contingency arrangement

1. The contingency model avoids most assignment pitfalls. No waiting period. No 80%-floor problem. The UVTA does not threaten the arrangement because no property right is transferred at contract signing. The client retains the claim.

2. Fee reasonableness still applies. Contingency fees for surplus recovery must satisfy state bar rules (for attorneys) or state fee-cap statutes (for licensed non-attorney agents where permitted). Georgia’s 10% cap applies to any third-party fee; it does not distinguish between assignment consideration and contingency fees.

3. Be clear about who the attorney represents. If the operator buys the claim and then hires an attorney to collect it, the attorney represents the operator, not the former owner. The former owner has no attorney-client relationship. Representing both the assignee-operator and the former owner creates a conflict of interest.

4. The contingency model is the only model in Colorado and effectively the only model in Oregon for any recovery involving the former owner’s participation.

For a former owner deciding whether to sign an assignment or a contingency agreement

1. You can almost always claim directly, for free. Texas, California, Florida, Georgia, Michigan, Minnesota, and most other states with statutory surplus frameworks allow the former owner to file a claim form directly with the county clerk, treasurer, or court at no cost. A recovery agent is a convenience, not a requirement.

2. An assignment transfers your right permanently. Once signed (in a state and at a time when the assignment is valid), you no longer have a right to claim. The assignee owns the claim.

3. A contingency fee agreement keeps you in control. You retain the right; you fire the agent if you choose (subject to any contractual terms); you receive the net surplus.

4. Understand what fees you are actually paying. In Florida, the 12% cap on “total compensation” under § 45.033 is intended to capture all fees. Some commercial actors add “consultation fees” or “processing fees” that can effectively multiply the total. Courts retain equitable authority to look through such structures.

5. Do not sign an agreement in the void window. In Texas, Arizona, Georgia, California, North Carolina, and other states, agreements signed too early are void. You are not legally bound. Any assignment “payment” made during a void period is a gift to the operator if you later decide not to honor it.

Key Cases

The following cases were retrieved and confirmed during research:

• tyler-v-hennepin-county, 598 U.S. 631 (2023). The surplus above the tax debt is the owner’s constitutionally protected property. No state may retain it without just compensation. This is the foundation for the property right being assigned or contracted over. (Source: https://www.law.cornell.edu/supremecourt/text/22-166, retrieved 2026-06-01.)

• 257-261 20th Avenue Realty, LLC v. Roberto, 259 N.J. 417, 327 A.3d 1177 (N.J. 2025). New Jersey recognizes a property right to surplus equity. Private tax-lien certificate holders acting jointly with local government are state actors subject to Tyler liability. Relevant to the assignment context because it confirms the surplus equity is a cognizable property right that can be bought, sold, or assigned. (Source: https://www.njcourts.gov/system/files/court-opinions/2025/a_29_23.pdf, retrieved 2026-06-01.)

• Simon v. Cronecker, 189 N.J. 304 (2007). A third party may not buy out an owner’s equity or redemption right for nominal consideration without intervening in the foreclosure proceeding; courts scrutinize such transactions and may impose constructive trusts. While a New Jersey case addressing a specific fact pattern, the decision’s reasoning — that below-market buyouts of desperate owners’ equity rights are suspect — resonates broadly across any state applying equitable scrutiny to below-market surplus assignments. (Source: holding cited in third-party-recovery-rules; needs_verification against reporter text before relying.)

No cases fabricated. Several commercial sources reference additional case law supporting or invalidating surplus assignments in specific states; those case citations have not been independently retrieved against primary sources and are therefore not cited here. Use the jurisdiction pages for state-specific case law once those pages have verified entries.

Jurisdictional Table

Summary of the key assignment vs. contingency variables by jurisdiction cluster. “Cap” = maximum fee or consideration cap applying to the recovery arrangement. “Wait” = cooling-off / void window before an assignment is valid. “Assign OK?” = whether outright assignment of the surplus claim is permitted. “NV†” = non-verified, needs primary-source confirmation.

NV† = needs_verification against primary source.

Cross-Links

surplus-funds, third-party-recovery-rules, tyler-v-hennepin-county, right-of-redemption, due-process-notice, sheriff-sale, treasurer-sale, void-vs-voidable, tyler-v-hennepin-county, jones-v-flowers, mennonite-v-adams, mullane-v-central-hanover

Sources

Primary sources retrieved during research for this page:

• {statute, Tex. Tax Code § 34.04 (full text: 36-day/80%/125% assignment rules (f),(j); non-attorney prohibition and 25%/$1,000 attorney cap (i); damages for non-compliance (g)), https://texas.public.law/statutes/tex._tax_code_section_34.04 , retrieved 2026-06-01} — corroborated by FindLaw and multiple secondary sources; key subsection text confirmed via https://www.manfredlaw.com/excess-funds-from-a-foreclosure-sale-texas-law-in-plain-language , retrieved 2026-06-02.

• {statute, Cal. Rev. & Tax. Code § 4675 (dated written instrument requirement; full mutual disclosure; no-cost filing disclosure; 1-year deadline; heir affidavit provision), https://california.public.law/codes/revenue_and_taxation_code_section_4675 , retrieved 2026-06-02} — also confirmed via https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=4675.&lawCode=RTC , retrieved 2026-06-02.

• {statute, Fla. Stat. § 45.033 (12% total-compensation cap; voluntary-transfer requirements; 60-day filing deadline; disclosure of free-claim right), https://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0045/Sections/0045.033.html , retrieved 2026-06-02} — supplemented by qualifications summary from https://law.justia.com/codes/florida/2019/title-vi/chapter-45/section-45-034/ (§ 45.034 surplus trustee requirements), retrieved 2026-06-02 (403 returned on direct Justia fetch; qualifications confirmed via secondary https://www.flsenate.gov/Laws/Statutes/2012/0045.034 description, retrieved 2026-06-02).

• {statute, A.R.S. § 33-812 (30-day void window; $2,500 presumptive cap excl. attorney fees; 15-day trustee notice; agreement-in-writing requirement), https://www.azleg.gov/ars/33/00812.htm , retrieved 2026-06-02}.

• {statute, Mich. MCL 211.78t (non-transferability of remaining-proceeds claim except by succession), https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-211-78t , retrieved 2026-06-02}.

• {statute, O.C.G.A. §§ 48-4-5 and 44-12-224(a) (10% fee cap; 24-month unenforceability window; direct-payment-to-owner rule), corroborated via county-published procedures citing these sections: https://forsythcountytax.com/tax-sales-excess-funds/ , retrieved 2026-06-02} — primary statute text not directly fetched (Justia returned 403); field treatment: facts cited with partial-verification caveat; needs_verification against full statutory text.

• {US Supreme Court, Tyler v. Hennepin County, 598 U.S. 631 (2023) (constitutional property right in surplus equity), https://www.law.cornell.edu/supremecourt/text/22-166 , retrieved 2026-06-01}.

• {case, 257-261 20th Avenue Realty, LLC v. Roberto, 259 N.J. 417, 327 A.3d 1177 (N.J. 2025) (surplus equity is a recognized property right; private tax-lien holders can be state actors), https://www.njcourts.gov/system/files/court-opinions/2025/a_29_23.pdf , retrieved 2026-06-01}.

• {statutory framework, Colo. Rev. Stat. §§ 38-38-111, 39-11.5-109 (compensation agreements unenforceable; inducing = Class 2 misdemeanor), summarized from third-party-recovery-rules citing https://law.justia.com/codes/colorado/2022/title-38/article-38/part-1/section-38-38-111/ , retrieved 2026-06-01}.

• {statutory framework, Minn. Stat. § 282.005 (surplus distribution; statute silent on third-party assignment and fees), https://www.revisor.mn.gov/statutes/cite/282.005 , retrieved 2026-06-02}.

• {case, Simon v. Cronecker, 189 N.J. 304 (2007) (constructive trust on below-market equity buyout), summarized from third-party-recovery-rules; not directly fetched; marked needs_verification}.

• {secondary, https://www.fightforyourhome.com/blog/2022/march/florida-foreclosure-sale-surplus-funds-and-tax-d/ , retrieved 2026-06-02} — explains contingency vs. assignment distinction in Florida; corroborates 12% cap under § 45.033(3)(d); secondary source only.

• {secondary, https://forsythcountytax.com/tax-sales-excess-funds/ , retrieved 2026-06-02} — Georgia county practice and statutory citations under §§ 48-4-5 and 44-12-224(a).

Disclaimer. This page is legal information, not legal advice. It is a general, cross-jurisdiction summary that may be incomplete or out of date; law varies by jurisdiction and changes frequently. Nothing here creates an attorney-client relationship. Verify every deadline, statute section, and case citation against the current primary source before acting. Consult a licensed attorney in the relevant jurisdiction before structuring any surplus-recovery arrangement.