Third-Party Surplus-Recovery Agent Rules

Cross-jurisdiction doctrine page. Legal information, not legal advice. Last verified: 2026-06-01. Verify every cited statute/case against the linked primary source before acting — surplus-recovery law is changing fast in the wake of tyler-v-hennepin-county.

What it is

When a tax-foreclosure property sells (at a treasurer-sale or sheriff-sale) for more than the tax debt plus costs, the difference is surplus-funds (a.k.a. excess proceeds, overage, overbid, or — post-resale — “excess equity”). After tyler-v-hennepin-county (2023) held that the government may not keep that surplus, a growing pool of money is owed back to former owners and junior lienholders. A third-party surplus-recovery agent (also “finder,” “locator,” “asset-recovery firm”) is a business that locates former owners, tells them money exists, and — for a contingent fee or via an assignment of the claim — recovers it on their behalf.

This page maps the state-by-state regulation of those agents: fee caps, licensing/registration, whether the claim can be assigned, cooling-off/waiting periods, mandatory contract disclosures, and prohibited practices. It is built from the Module 3 third_party_recovery field on each jurisdiction page; where that field is still unverified, the state is flagged needs_verification below and the cell is left honest rather than fabricated.

The single most important structural distinction

Most states have no tax-surplus-specific recovery-agent statute at all. What they have instead is a general unclaimed-property “finder/locator” law (usually a Revised Uniform Unclaimed Property Act, RUUPA), which:

  • caps finder fees (commonly 10%, but 15%, 20%, or 25% in some states);
  • voids any locate agreement signed within 24 months of the funds being delivered to the State unclaimed-property administrator;
  • requires a signed, written agreement disclosing the property, services, and value before/after the fee.

But the unclaimed-property cap only governs the funds once they have escheated to the State unclaimed-property administrator. While the money is still held by the county treasurer / clerk / court (the window in which most recovery deals are actually signed), the cap frequently does not yet apply, and the field is genuinely unsettled in many states. Operators must always determine which custody stage the funds are in before quoting a fee. States that route unclaimed surplus to a county fund (CA, NV, OK, SC, WA, IN, MO) rather than the State administrator may put the surplus outside the RUUPA finder cap entirely.

The governing framework

The constitutional baseline is the surplus-funds / takings line anchored by tyler-v-hennepin-county, 598 U.S. 631 (2023) — unanimous, decided May 25, 2023 — holding that retaining the surplus equity above the tax debt is an unconstitutional taking under the Fifth Amendment. (Justia; LII) That decision is what created the surplus pools these agents pursue; before Tyler, many states simply kept the equity.

Recovery-agent regulation itself is almost entirely statutory and state-level. There is no federal recovery-agent licensing regime. The operative sources are, in rough order of strength:

  1. A tax-surplus-specific statute (rare but the clearest): TX Tax Code § 34.04; NV NRS 361.610; CO C.R.S. § 39-11.5-109; WA ESHB 1637 (2023); IN IC 6-1.1-24-7.5; AR COSL Rules Title 4; OK 68 O.S. § 3131(D); OR HB 2089 (2025).
  2. A general unclaimed-property / RUUPA finder statute that reaches surplus only after escheat (most states).
  3. State consumer-protection / UDAP law (a backstop everywhere; e.g. WA ch. 19.86, MA ch. 93A, VA VCPA § 59.1-200) and private-investigator licensing (NC, UT) where a contingent-fee finder must be a licensed PI.
  4. Due-process notice rules (due-process-notice, jones-v-flowers, mennonite-v-adams, mullane-v-central-hanover) — increasingly, states now require the government itself to notify the former owner that surplus exists, which shrinks the room for high-fee finders.

State-by-state regulation of recovery agents

Legend — Fee cap: the maximum agent compensation, and the regime it lives in. Lic.: licensing/registration required for a paid finder. Assign: whether the surplus claim itself may be assigned (vs. only an agency/POA). Cooling-off: statutory void/waiting window. ⚠ = a load-bearing value is still needs_verification on the jurisdiction page.

JurisdictionFee cap (regime)Lic.AssignCooling-off / key rulePrimary cite
alabamanone locatedAla. Code § 40-10-28
alaskanone locatedlikely yes (AS 29.45.470 “assigns”)AS 29.45.480
american-samoanone (no tax-surplus regime)mortgage surplus → owner via High CourtA.S.C.A. § 37.1109
arizonanone locatedyes (assignees litigate surplus)trustee-sale claim processA.R.S. §§ 33-812, 42-18204
arkansas10% (tax-surplus-specific)agency contract, not outright assignment ⚠agent–owner contract must be filed; fee >10% voidArk. Code § 26-37-205; COSL Rules Title 4
californianone for tax excess proceeds; 10% only for SCO unclaimed property (CCP § 1582 — do not conflate)noyes — notarized affidavit of assignment signed after the tax saledisclosure of amount + free-claim right (RTC § 4675(c))Cal. RTC § 4675
colorado0% while treasurer holds funds (compensation agreement unenforceable); finder fee void during trustee custody + first 2 yrs state custody, then 20%/30% (mortgage track)n/aclaim not barred but fee unenforceableinducing such an agreement = Class 2 misdemeanorC.R.S. §§ 39-11.5-109(2)(c), 38-38-111
connecticutnone located (tax); escheats to Treasurer ch. 32“any person” may apply on record interestmunicipal-lien-assignment regime § 12-195h is the analogCGS § 12-157(i)
delawarenone locatedcourt-run Project Rightful Owner ($75, pro bono) reduces finder room9 Del. C. § 8779; Super. Ct. program
district-of-columbianone locatedowner-occupant equity returned inside Super. Ct. foreclosure (§ 47-1382.01)D.C. Code §§ 47-1382, 47-1382.01
floridaclerk stage: no cap; after Ch. 717 escheat: 20%, max $1,000/account to a natural personyes after escheat (attorney/CPA/Class-C PI)yes via Unclaimed Property Purchase Agreementtwo-regime split is business-criticalFla. Stat. §§ 197.582, 717.135, 717.1400, 717.1351
georgianone located in Title 48 (commercial sites claim ~10%)many commissioners require licensed GA attorney (office practice) ⚠disputed ⚠O.C.G.A. § 48-4-5
guamnone locatedno escheat specified11 GCA § 24810
hawaii25% (unclaimed-property stage only, HRS 523A-25); no county-stage capno (PI not confirmed)⚠ tax surplusvoid if signed from abandonment until 24 mo after deliveryHRS 523A-25; HRS 246-63
idahoRUUPA locator cap (exact % ⚠) for state-held fundslikely yes (county-held, § 31-808)void until dormancy period (RUUPA)Idaho Code § 31-808; Title 14 ch. 5
illinoisnone located (Property Tax Code); historically no surplus (Indemnity Fund model)certificates assignable; indemnity-claim ⚠bell-v-pappas-2025; HB4537 reform pending35 ILCS 200/21-305
indiana10% (tax-surplus-specific; >$50 only)recovery agreement permitted but cappedmust disclose deposit amount + owner net; AG Homeowner Protection Unit enforcesIC 6-1.1-24-7.5
iowa15% finder (unclaimed-property; ch. 556) — no tax surplus exists by designyes — PI license (ch. 80A) to collect a feen/a (no surplus claim to assign)agreements within 24 months unenforceableIowa Code § 556.11(10)
kansasnone for court-held surplus; 15% RUUPA (58-3968) only after state deliveryUP admin pays only owner/heir, not attorney-in-fact (58-3968)RUUPA agreements <24 mo unenforceableK.S.A. §§ 79-2803, 58-3968
kentuckynone located (tax surplus); KRS ch. 393A RUUPA analogchose in action, transferable (Farmers Nat’l Bank) ⚠ch. 393A cooling-off (post-remittance) ⚠KRS ch. 393A; KRS 426.500
louisiana10% (unclaimed-property finder, R.S. 9:177) — applicability to pre-escheat surplus ⚠agreements before property reportable prohibitedLa. R.S. 9:177
mainenone tax-specific; 10% (unclaimed property, 33 M.R.S. § 2179) after escheatproceeds are owner’s property, presumptively assignable ⚠§ 2179 void within 24 months of delivery36 M.R.S. § 943-C; 33 M.R.S. § 2179
marylandnone tax-specific; mortgage-surplus acquisitions tightly regulated (RP § 7-314)OFR-regulated for mortgage surplusmortgage surplus: written contract + Notice of Rescission10-day rescission (mortgage surplus, RP §§ 7-314/7-315)Md. TP § 14-818; RP § 7-314
massachusettsnone tax-specific; 10% (c. 200A § 13 unclaimed property)no general license; ch. 93/93A applyc. 200A 24-month unenforceability windowG.L. c. 60 § 64A; c. 200A § 13
michigannone in MCL 211.78t (UP 10% cap doesn’t govern the 78t process)post-foreclosure assignee status contested ⚠78t is the exclusive mechanism; Form 5743 + Feb 1–May 15 motion windowMCL 211.78t
minnesotanone located (tax-surplus-specific)direct county-auditor claim by design; ch. 332 may bear ⚠Minn. Stat. § 282.005
mississippi10% (unclaimed-property analog only; not confirmed for tax overbids)no (no overbid-specific license)7-month bar (unclaimed-property analog)Miss. Code §§ 27-41-77, 89-12-23
missourinone in ch. 140; agent must act on behalf of an entitled party, not as independent claimantcertificates assignable; surplus-claim assignment ⚠UP locator caps post-escheat ⚠RSMo § 140.230
montanano fixed % — “unconscionable” fee unenforceable (MCA § 70-9-825)no specific licenseUP-claim assignment governed by § 70-9-825void from abandonment until 24 mo after deliveryMCA §§ 70-9-825, 15-18-221
nebraskanone located (LB 727 makes grantee pay surplus in 30 days → small finder market)certificate assignable; owner’s surplus-right assignment ⚠Neb. Rev. Stat. §§ 77-1838, 77-1837
nevada10% (tax-surplus-specific; applies where a natural person’s primary residence was sold)⚠ (no NRS 361.610 license req. located)yes — POA, assignment, or other legal instrument to file + collectwritten + signed agreementNRS 361.610
new-hampshirenone verified for tax surplus (do not quote a %)⚠ (RSA 479-B foreclosure-consultant law, mortgage context)proceeds assignable but interpleader court controls ⚠RSA 358-A CPA backstopRSA 80:88, 80:90
new-jerseynone located (tax-surplus-specific)Simon v. Cronecker limits third-party buyout without intervening + paying >nominalconstructive-trust scrutinyP.L. 2024 c.39; Simon v. Cronecker, 189 N.J. 304 (2007)
new-mexiconone tax-specific locatedlikely yes — § 7-38-71 pays owner “or other person designated by court order”UP Act applicability pre/post escheat ⚠NMSA § 7-38-71
new-yorknull/unsettled — APL § 1416 = 15% but governs Comptroller-held funds; RPTL surplus goes to tax district, not ComptrollerAPL § 1416 disclosure rules (Comptroller funds)⚠ litigated within foreclosure (RPAPL Art. 13)Seelbach: no special surplus-notice entitlementRPTL §§ 1196–1197; APL § 1416
north-carolina20% (and ≤ lesser of $1,000 or 20% for unclaimed property), reaches “surplus funds in a special proceeding”yes — annual Treasurer registration and PI license (116B-78.1, since 1/1/2022)locate agreement, not outright assignment ⚠void from distributable until 24 mo after Treasurer deliveryG.S. §§ 116B-78, 116B-78.1
north-dakotacounty 90-day window: no cap/license; post-escheat 10% (RUUPA 47-30.2-68)true post-escheat (locator licensing ch. cross-ref ⚠)not addressed for 90-day county claim ⚠void abandonment→24 mo after delivery (47-30.2-69)NDCC §§ 57-28-20, 47-30.2-68/-69
northern-mariana-islandsnone (no tax-surplus regime)redemption right not assignable (Sablan); surplus-cash claim ⚠Pac. Fin. Corp. v. Sablan, 2011 MP 19
ohionone verifiedresidue-claim assignability ⚠R.C. §§ 5721.19, 5721.20
oklahomano % cap locatedyes, but only BEFORE resale begins — post-resale assignment is voidhard cutoff at resale commencement (not a window)68 O.S. § 3131(D); AG Opinion
oregonassignment-based recovery = 0% (void); private auction operator fee capped at 3% (not a recovery agent)n/a (model foreclosed by assignment bar)No — any purported assignment of a surplus claim is void (except bankruptcy/POA/guardianship)claims go through State Treasury directlyHB 2089 (2025) §§ 5, 6, 9
pennsylvanianone in RETSL (Treasury finder rules apply ⚠)yes (county/Treasury practice) — finder must register with PA Treasury + signed authorizationMCTLA contemplates “assignees”; RETSL surplus assignment ⚠DAUPA / Treasury finder rules ⚠72 P.S. § 5860.205
puerto-riconone specific locatedyes — surplus/redemption run to owner’s “cesionarios” (assignees)general Civil Code / UDAPLey 107-2020 Arts. 7.080, 7.086
rhode-islandnone in ch. 44-9tax titles assignable (§ 44-9-18); surplus-claim assignment ⚠surplus escheats to municipality after 5 yrsR.I.G.L. § 44-9-37
south-carolinanone in Title 12 ch. 51⚠ (not established)yes — overage may be “claimed or assigned according to law”escheat to county general fund after 5 yrsS.C. Code § 12-51-130
south-dakotanone tax-specific; RUUPA ch. 43-41B (exact cap ⚠)UP-claim assignment via ch. 43-41BRUUPA 24-mo void window (text not pulled) ⚠SDCL § 10-25-39; ch. 43-41B
tennesseenone located (delinquent-tax chapter)lienholder’s assignee is “interested person”; excess-proceeds-claim assignment ⚠a tax-sale purchaser may NOT claim the excessTenn. Code Ann. § 67-5-2702
texasattorney fee ≤ lesser of 25% or $1,000; assignee recovery ≤ 125% of what was paid the owner (§ 34.04(j))no dedicated non-attorney license ⚠yes but: ≥ 36 days after deposit, written/signed, pay owner ≥ 80%, no solicitation, sworn affidavit36-day waiting period; anti-solicitationTex. Tax Code § 34.04(f),(i),(j)
us-virgin-islandsnone located⚠ (§ 2584 “assigns” governs redemption, not surplus)bid manipulation criminal (§ 2549)33 V.I.C. §§ 2546, 2547
utah20% (Title 67-4a unclaimed property)yes (conditional) — PI/private-detective license for contingent fee; attorneys/CPAs exemptPOA filed with claim may not carry a fee/% term; outright assignment ⚠24-month void on state-delivered propertyUtah Code Title 67 ch. 4a; UCC 3.04.150
vermontnone tax-specific (Bogie common-law surplus)§ 5260 “assign” governs redemption; surplus assignment ⚠9 V.S.A. ch. 63 CPA backstopBogie v. Town of Barnet, 128 Vt. 280 (1970)
virginianone tax-specific (statute expressly allows “successors, or assigns”)no special licenseyes — § 58.1-3967 names “assigns”; McKeithen involved assigneeVCPA § 59.1-200.1 targets foreclosure-rescue (advance fees/arbitration void), not surplusVa. Code § 58.1-3967
washington5% of value returned (tax-foreclosure-surplus-specific)no specific license (fee cap + CPA police it)regulates locating-fee agreement, not outright purchase ⚠written/signed disclosure (RCW 63.30.780); >5% = misdemeanor + CPA violationESHB 1637 (2023); RCW 63.30.780
west-virginianone tax-specific (1995 UPA has no finder cap per NAUPA)noyes — § 11A-3-65 extends surplus to owner’s “assigns”ch. 46A consumer-protection backstopW. Va. Code § 11A-3-65
wisconsinnone tax-deed-specific (ch. 177 UP cap reach ⚠)statute pays “former owner”; assignability ⚠ch. 100 consumer-protection ⚠Wis. Stat. § 75.36(2m)
wyomingnone located§ 39-13-108 runs to “prior interests”; assignment not addressed ⚠RUUPA (Title 34 ch. 24) locator window ⚠Wyo. Stat. § 39-13-108

State-by-state specifics (deadlines, waterfalls, escheat destinations) live on each jurisdiction page; this table is the map for the recovery-agent overlay.

How jurisdictions diverge — the operator’s typology

PatternJurisdictionsNotes
Hard %-cap, tax-surplus-specificarkansas (10%), indiana (10%), nevada (10%, primary residence), washington (5%), texas (attorney 25%/$1k; assignee 125%/80% rule), north-carolina (20%, + PI license)The clearest regimes; the cap is in the tax or finder statute and applies to the surplus directly.
Recovery effectively banned / fee unenforceablecolorado (void + Class-2 misdemeanor to induce), oregon (assignment of claim void)Operating a contingent-fee/assignment model can be a crime (CO) or simply void (OR).
No tax cap; only an unclaimed-property cap after escheat to the Statehawaii (25%), louisiana (10%), maine (10%), massachusetts (10%), north-dakota (10%), utah (20%), kansas/idaho/south-dakota/wisconsin (RUUPA, % ⚠)Cap bites only once funds are with the State administrator (commonly after a 24-month void window); county-stage deals may be unregulated.
Assignment timing is the lever (not a %)texas (≥36 days post-deposit), oklahoma (only before resale; post-resale assignment void), california (affidavit signed after the sale)Regulation runs through when an assignment is valid, not a flat fee.
Surplus routes to a COUNTY fund (RUUPA cap may not apply at all)california, nevada, oklahoma, south-carolina, washington, indiana, missouri, new-york (to tax district)Because the money never reaches the State UP administrator, the State finder cap frequently does not cleanly govern.
Government returns equity directly / low-cost public channel (small finder market)delaware (Project Rightful Owner), maine/new-hampshire (court interpleader), nebraska (grantee pays in 30 days), oregon (State Treasury), wisconsin/minnesota (auditor mails claim form)Structural competition from a free public process shrinks the recovery-agent opportunity.
No tax-surplus regime exists (nothing to recover)iowa (no surplus by design), american-samoa, northern-mariana-islands, illinois (historical Indemnity-Fund model), wyoming (private tax-deed track), mississippi (state-struck land path)The classic recovery model has no statutory footing for the tax track.
No located recovery-agent rule — needs_verificationalabama, alaska, arizona, connecticut, district-of-columbia, georgia, guam, kentucky, ohio, puerto-rico, rhode-island, tennessee, us-virgin-islands, vermont, virginia (no % cap, but assigns allowed), west-virginia (no cap, assigns allowed), and the ⚠ cells aboveA statement of “no cap” is itself only as good as the search behind it; treat as open until a primary source confirms the absence.

Leading cases

  • tyler-v-hennepin-county — surplus equity above the tax debt is the owner’s property; retaining it is a Fifth-Amendment taking (the decision that created the recovery-agent market). 598 U.S. 631 (2023).
  • jones-v-flowers — returned certified mail obligates further reasonable notice steps; feeds the rising trend of statutes requiring the government to notify owners of surplus (which competes with finders).
  • mennonite-v-adams — mortgagees/lienholders of record are entitled to actual mailed notice; relevant to junior-lienholder surplus claims.
  • mullane-v-central-hanover — notice “reasonably calculated” to reach the party; the root standard behind due-process-notice.
  • Simon v. Cronecker, 189 N.J. 304 (2007) — a third party may not buy out an owner’s equity/redemption for nominal consideration without intervening in the foreclosure; courts scrutinize and may impose constructive trusts (see new-jersey). (holding summarized from the NJ jurisdiction page; verify against the reporter before relying.)

Practical playbook (for a recovery operator / a former owner)

  1. Confirm a surplus actually exists and where it is. Identify the custody stage: county treasurer/clerk → court registry → State unclaimed-property administrator (or a county fund). The applicable rules change at each stage.
  2. Read the controlling statute for THAT state and stage from the jurisdiction page’s Module 3. Do not assume the unclaimed-property finder cap applies to county-held surplus — in many states it does not.
  3. Check the fee ceiling before quoting. Hard caps: AR/IN/NV 10%, WA 5%, NC 20% (+PI license), UT 20%, TX attorney 25%/$1,000. Where the only cap is the State unclaimed-property cap, it usually applies only after a 24-month void window.
  4. Mind the assignment-validity rules. TX: ≥36 days post-deposit, ≥80% to owner, no solicitation, sworn affidavit. OK: assignment only valid before resale begins. CA: affidavit of assignment signed after the sale. OR: assignment of the claim is void. CO: a compensation agreement is unenforceable and inducing one can be a misdemeanor.
  5. Satisfy disclosure + licensing. Written, signed agreement disclosing the amount available, the owner’s net after the fee, and (where required) that the owner can claim directly for free. Secure any required registration/PI license (NC, UT, FL post-escheat, PA practice).
  6. Respect the free public channel. In states with court interpleader or a government-notify-and-pay process (DE, ME, NH, OR, MN, WI, NE), the owner can often recover at little or no cost; advise accordingly and price honestly to avoid UDAP exposure.
  7. For a former owner: you can almost always claim directly. Locate the surplus through the county treasurer/clerk/court or the State unclaimed- property site, file the claim form, and prove identity + interest — usually without paying any percentage to a finder.

surplus-funds, right-of-redemption, due-process-notice, sheriff-sale, treasurer-sale, tyler-v-hennepin-county, jones-v-flowers, mennonite-v-adams, mullane-v-central-hanover, tax-foreclosure

Sources

Primary sources retrieved for this page (recovery-agent provisions verified 2026-06-01):

All remaining statutory values in the 50-state table are summarized from the corresponding jurisdictions/<state>.md Module 3 third_party_recovery field, which carries its own primary-source source_urls. Cells marked ⚠ are needs_verification on the jurisdiction page and must be confirmed against a primary source before any statement of law is relied upon. Never fabricate a fee cap, statute section, or case — where this page says “none located,” it means no primary source establishing the rule was retrieved, not that no rule exists.


Legal information, not legal advice. This page summarizes statutes and cases that change frequently and vary by county practice. Verify every citation against the linked primary source and consult a licensed attorney in the relevant jurisdiction before acting. Last verified: 2026-06-01.