State Foreclosure Law Library

virginia

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Virginia — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

Virginia is a tax-deed state that sells through a judicial process: the locality files a bill in equity in the circuit court, the court appoints a special commissioner to sell the parcel at public auction, and the court confirms the sale (Va. Code §§ 58.1-3965 to 58.1-3969). There is no post-sale right of redemption — the owner must redeem (pay all taxes, penalties, interest, attorney’s fees and costs) before the date of sale (§ 58.1-3965). Surplus over the tax debt and chargeable liens belongs to the former owner and any junior lienors (§ 58.1-3967); unclaimed surplus is held by the clerk for two years, after which the statute purports to send it to the locality — a provision the Supreme Court of Virginia held unconstitutional as applied in mckeithen-v-city-of-richmond (2023). Mortgage foreclosure is non-judicial under a deed of trust (Va. Code Title 55.1, Ch. 3). Note: Virginia’s recording units are counties and independent cities.

0. Identity & Classification

  • Recording unit: County and independent city. Virginia has 95 counties + 38 independent cities (independent cities are not part of any county and run their own treasurer/collection). Localities collect their own real-estate taxes.
  • Tax sale type: Tax deed via judicial sale — the purchaser at the special-commissioner’s auction takes title on court confirmation (Va. Code §§ 58.1-3965 to 58.1-3969). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3965/
  • Tax foreclosure process: Judicial — a bill in equity to sell delinquent tax lands filed in the circuit court; an order of reference and appointment of a special commissioner to sell (§§ 58.1-3967, 58.1-3969). A separate administrative / non-judicial track exists for minimal-value parcels (§ 58.1-3975) and a special-commissioner-to-locality track for low-value / heavily-encumbered parcels (§ 58.1-3970.1).
  • Mortgage foreclosure process: Non-judicial (power of sale under a deed of trust), conducted by a trustee (Va. Code Title 55.1, Ch. 3, §§ 55.1-320 to 55.1-324). — https://law.lis.virginia.gov/vacode/title55.1/chapter3/section55.1-321/
  • Selling authority: For tax sales, the treasurer / local collecting officer initiates and a court-appointed special commissioner (often outside counsel, e.g., TACS) conducts the sale (§ 58.1-3969). For mortgage sales, the trustee named in (or substituted under) the deed of trust.
  • Statutory home: Va. Code Title 58.1, Ch. 39, Article 4 — “Bill in Equity for Sale of Delinquent Tax Lands” (§§ 58.1-3965 to 58.1-3974) for tax sales; Title 55.1, Ch. 3 for deed-of-trust foreclosure. — https://law.lis.virginia.gov/vacodefull/title58.1/chapter39/article4/
  • Tyler v. Hennepin compliance: reformed_post_Tyler / largely compliant. Virginia’s surplus statute already directs surplus to the former owner and lienors (§ 58.1-3967); the only equity-retention feature was the 2-year unclaimed-surplus escheat to the locality, which the Supreme Court of Virginia struck as applied under the Virginia Constitution’s takings clause (Art. I, § 11) in mckeithen-v-city-of-richmond (decided Oct. 19, 2023, four months after tyler-v-hennepin-county). See Module 3.

1. Tax Sale Mechanics

  • What is sold: A deed (fee title) conveyed by the special commissioner on court confirmation — not a lien certificate (§§ 58.1-3967, 58.1-3969). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3967/
  • Bidding method: Highest bid at a public auction (in person or online) conducted by the special commissioner under the circuit court’s authority (§ 58.1-3969). The locality itself may be a purchaser (§ 58.1-3970). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3970/
  • Interest / penalty: Virginia has no redemption interest paid to a purchaser (no certificate). The delinquent-tax payoff that an owner must pay to redeem before sale is “all accumulated taxes, penalties, reasonable attorney fees, interest and costs” including pro-rata publication cost (§ 58.1-3965). Statutory delinquency interest and penalties on local taxes are set under Va. Code §§ 58.1-3915 / 58.1-3916 (locality-set, commonly 10% penalty and 10% annual interest, but locality-specific). (Exact penalty/interest rates are locality-set — see needs_verification.)
  • Minimum bid composition: No fixed statutory minimum; the sale must generate enough to satisfy taxes, penalties, interest, attorney’s fees and costs, with surplus to owner/lienors (§ 58.1-3967). Courts require an appraisal or value report before sale (§ 58.1-3969). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3969/
  • Sale frequency / typical month: No statewide calendar — sales occur parcel-by-parcel as suits ripen. The typical TACS-administered case takes ~1 year from referral to sale. (No single typical month statewide.) — https://taxva.com/real-estate-tax-sales/
  • Venue: Both in-person and online; many localities use third-party administrators (TACS / law firms) running online auctions. (Platform identity is locality/administrator-specific — needs_verification.)
  • Platform vendors: Commonly Taxing Authority Consulting Services (TACS) and similar firms as special commissioners; auction platforms vary. (Vendor list not from a single primary source — needs_verification.) — https://taxva.com/real-estate-tax-sales/
  • Registration & deposit: Set by the special commissioner per sale (“your bid amount and your deposit amount will be provided the day of the auction”); typically a deposit at the fall of the hammer with the balance due before confirmation. (Locality/sale-specific.) — https://taxva.com/real-estate-tax-sales/
  • Subsequent taxes (“subs”): Not applicable in the certificate sense; because Virginia sells the deed, there is no certificate holder paying subs. Accruing taxes are folded into the judicial-sale payoff.

2. Right of Redemption → see right-of-redemption

  • Pre-sale right: Yes — and it is the only redemption right. “The owner of any property listed may redeem it at any time before the date of the sale by paying all accumulated taxes, penalties, reasonable attorney fees, interest and costs thereon, including the pro rata cost of publication” (§ 58.1-3965). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3965/
  • Post-sale period: None. Once the circuit court confirms the sale, title vests in the purchaser and the former owner cannot redeem (§§ 58.1-3967, 58.1-3969). This is a key difference from lien-certificate states. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3967/
  • Installment alternative: The treasurer may suspend the sale action by entering an installment agreement with the owner to pay all delinquent amounts over a period that is “reasonable under the circumstances, but … in no event … exceed 72 months” (§ 58.1-3965). Current taxes must be kept current. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3965/
  • Who may redeem: The owner (and, by the installment/ownership-assertion language, persons “asserting ownership rights … by virtue of testate or intestate succession”) (§ 58.1-3965). Lienors are protected through the surplus distribution, not a redemption right.
  • Redemption amount formula: Taxes + penalties + reasonable attorney’s fees + interest + costs (including pro-rata publication) (§ 58.1-3965).
  • Premium to certificate holder: N/A — no certificate system.
  • Procedure: Pay the locality/treasurer (or special commissioner) the full payoff before the sale date, or enter a ≤72-month installment agreement (§ 58.1-3965).
  • Extinguishment: The redemption right is extinguished at the moment of sale; confirmation perfects the purchaser’s title (§§ 58.1-3967, 58.1-3969).
  • Special tolling: Unknown owners/heirs and persons under disability are represented in the suit by a guardian ad litem and reached by order of publication (recognized in mckeithen-v-city-of-richmond). (Specific minors/incompetents/SCRA/bankruptcy tolling of the pre-sale window — needs_verification.)

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

  • Belongs to: The former owner (and heirs/devisees/successors/assigns) plus junior lienors by priority. § 58.1-3967: “The former owner and his heirs, devisees, successors, or assigns … shall be entitled to the surplus received from such sale in excess of the taxes, penalties, interest, reasonable attorney fees, costs, and any liens chargeable thereon.” — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3967/
  • Claim waterfall: (1) taxes, penalties, interest; (2) reasonable attorney’s fees, costs of suit/publication/appraisal (§ 58.1-3969); (3) liens chargeable on the property in order of priority; (4) residual surplus → former owner (§ 58.1-3967). Confirmed by mckeithen-v-city-of-richmond (junior lienor has a vested property interest in surplus a senior lienor leaves unclaimed).
  • Filing venue: The clerk of the circuit court in which the tax suit was instituted holds the surplus in the court registry; claims are made to that court (§ 58.1-3967; McKeithen facts). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3967/
  • Claim deadline: Two (2) years after the date of confirmation of the sale (§ 58.1-3967). — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3967/
  • Escheat: By the statute’s text, if no claim is made within two years the clerk pays the surplus to the county/city/town that received sale proceeds (proportionally if multiple). BUT the Supreme Court of Virginia held in mckeithen-v-city-of-richmond (2023) that this escheat-to-locality provision is unconstitutional as applied where the locality’s tax lien was already fully satisfied — it effected an uncompensated taking under Va. Const. Art. I, § 11, and the unclaimed surplus had to go to the junior lienor instead of the city. Operators must therefore treat the 2-year “escheat” as constitutionally suspect when the locality is already made whole. — https://statecourtreport.org/sites/default/files/2023-12/McKeithen%20v.%20City%20of%20Richmond%20-%20Virginia%20Supreme%20Court%20210389%20-%2010.19.2023.pdf
  • Documentation required: Proof of ownership/heirship or recorded lien; petition to the circuit court for release of registry funds. (County/court-specific forms — needs_verification.)
  • Third-party recovery (CRITICAL for recovery agents):
    • fee_cap_pct: No tax-sale-surplus-specific statutory fee cap identified. Virginia has no statute capping the percentage a finder/agent may charge to recover tax-sale surplus from the circuit-court registry. (Confirmed absence against Title 58.1 Ch. 39 and Va. CPA § 59.1-200.1, which addresses foreclosure rescue not surplus recovery; see needs_verification for any newer 2024–2026 enactment.)
    • licensing_required: No special surplus-recovery license identified. Note that unclaimed-property held by the Virginia Department of the Treasury (separate from court-registry tax-sale surplus) is governed by the Virginia Disposition of Unclaimed Property Act (Va. Code Title 55.1, Ch. 25), which has its own locator-agreement rules. (Whether tax-sale registry surplus ever flows to the state UP program vs. staying with the court/locality — needs_verification.)
    • assignment_of_claim_allowed: The statute expressly contemplates “successors, or assigns” claiming surplus (§ 58.1-3967), so assignment of the surplus claim appears permitted; McKeithen itself involved a successor trustee/assignee claiming.
    • cooling_off_period: None identified for tax-sale surplus agreements.
    • contract_disclosure_rules: General Virginia Consumer Protection Act (§ 59.1-200 et seq.) applies to deceptive practices; § 59.1-200.1 specifically targets foreclosure-rescue services (pre-foreclosure), not post-sale surplus recovery, and bars charging fees before full performance and mandatory-arbitration clauses in that narrow context. — https://law.lis.virginia.gov/vacode/title59.1/chapter17/section59.1-200.1/
    • prohibited_practices: Deceptive/unconscionable acts under the VCPA; in the foreclosure-rescue context, advance fees and mandatory arbitration are void (§ 59.1-200.1). (No tax-sale-surplus-specific prohibited-practice statute identified — needs_verification.)
    • Bottom line for operators: Virginia surplus belongs to owner + junior lienors, sits in the circuit-court registry for 2 years, and is claimed by petition to that court. There is no identified percentage fee cap for tax-sale surplus recovery, but the VCPA polices deceptive contracts and McKeithen confirms strong constitutional protection of the surplus against the locality.
  • Notice to former owner: The owner and lienors receive pre-suit notice (≥30 days) and order-of-publication notice with a guardian ad litem for unknown parties (§ 58.1-3965; McKeithen). The statute itself does not require a separate post-confirmation surplus-availability notice beyond the registry deposit. (Post-sale surplus notice practice — needs_verification.)

4. Mortgage Foreclosure

  • Process: Non-judicial power-of-sale foreclosure under a deed of trust, conducted by the trustee (Va. Code Title 55.1, Ch. 3). No court action is required to sell. — https://law.lis.virginia.gov/vacode/title55.1/chapter3/section55.1-321/
  • Timeline (notice):
  • Reinstatement right: Virginia has no general statutory right to reinstate; reinstatement/cure depends on the deed of trust terms and any pre-sale notice rights. (Statutory reinstatement absence — needs_verification.)
  • Redemption after sale: None. Once the trustee’s sale occurs, there is no statutory post-sale redemption for the borrower.
  • Deficiency judgment: Allowed — the lender must file a separate lawsuit after the trustee’s sale to obtain a deficiency. Virginia has no general anti-deficiency / fair-value-offset statute comparable to some states; the enforcement of deeds of trust is time-limited under Va. Code § 8.01-241. (Fair-value-offset and one-action rules — needs_verification.) — https://law.lis.virginia.gov/vacode/title8.01/chapter4/section8.01-241/
  • Surplus distribution: Trustee applies proceeds in statutory order under § 55.1-324(A)(3): (1) expenses of executing the trust incl. trustee commission; (2) taxes/levies/assessments with priority; (3) debts and inferior liens in order of priority; (4) residue to the grantor or assigns; the trustee accounts to the commissioner of accounts (§ 64.2-1309). — https://law.lis.virginia.gov/vacode/title55.1/chapter3/section55.1-324/
  • Sale officer: Trustee (named or substitute trustee under the deed of trust).

5. Sale Procedure Playbooks

  • Treasurer / judicial tax sale — ordered steps → see treasurer-sale:
    1. Taxes delinquent on Dec. 31 after the 2nd anniversary of when due (or the 1st anniversary for condemned/derelict/nuisance/blighted property; as little as 6 months for certain abatement-cost cases) (§ 58.1-3965).
    2. Collector sends ≥30-day pre-suit notice to the owner’s last known address and the property address, and publishes the list ≥30 days before suit (§ 58.1-3965, § 58.1-3967).
    3. Locality files a bill in equity in circuit court; order of publication + guardian ad litem for unknown/disabled parties (§ 58.1-3967; McKeithen).
    4. Order of reference and appointment of a special commissioner to sell, after a title certificate and appraisal/value report (§ 58.1-3969).
    5. Public auction to the highest bidder (locality may bid; § 58.1-3970).
    6. Court confirms the sale; commissioner executes a deed; title vests free of the foreclosed liens (§§ 58.1-3967, 58.1-3969).
    7. Proceeds applied to taxes/costs/liens; surplus deposited with the clerk and held 2 years for owner/lienors (§ 58.1-3967), subject to McKeithen. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3969/
  • Nonjudicial minimal-value track (§ 58.1-3975): For parcels assessed **≤15k–30k–500), and sells at public auction. Excess proceeds remain the former owner’s, held in interest-bearing escrow, claimable in circuit court within 2 years, else to the locality’s general fund. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3975/
  • Special-commissioner-to-locality track (§ 58.1-3970.1): For low-value (≤150,000 in high-fiscal-stress localities) parcels where taxes+liens exceed set percentages of assessed value, the court may convey title directly to the locality / its land bank / a nonprofit; no deficiency against the owner; surplusage distributed per § 58.1-3967. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3970.1/
  • Sheriff sale — ordered steps → see sheriff-sale: Virginia tax sales are special-commissioner sales, and mortgage sales are trustee sales; there is generally no sheriff’s sale for tax or mortgage foreclosure (sheriff’s sales arise on money-judgment executions, outside this scope).
  • Notice requirements: Tax sale — ≥30-day mailed pre-suit notice + newspaper publication ≥30 days before suit (§§ 58.1-3965, 58.1-3967); plus order of publication + guardian ad litem. Trustee sale — 60 days (owner-occupied) / 14 days (other) mailed notice + advertisement per § 55.1-322. — https://law.lis.virginia.gov/vacode/title58.1/chapter39/section58.1-3965/
  • Upset bid / confirmation: Tax sale requires circuit-court confirmation (no NC-style upset-bid window). Trustee sales need no court confirmation (trustee accounts to the commissioner of accounts).
  • Payment terms: Tax-sale bidder pays a deposit at sale with balance before confirmation (special-commissioner-set). Trustee-sale terms per advertisement.
  • Deed issued: Tax sale — special commissioner’s deed on confirmation, conveying the tax-foreclosed title (functionally a special/limited conveyance, not a warranty deed). Trustee sale — trustee’s deed.

6. Due Process & Notice → see due-process-notice

  • Standard: mullane-v-central-hanover “reasonably calculated” notice; mennonite-v-adams requires actual (mailed) notice to recorded lienholders; jones-v-flowers obligates further steps if mail is returned. Virginia codifies layered notice: ≥30-day mailed pre-suit notice to the owner (§ 58.1-3965), publication, and an order of publication + guardian ad litem for unknown/disabled parties (§ 58.1-3967; recognized in mckeithen-v-city-of-richmond).
  • Required attempts: Mailed notice to last known address + property address; newspaper publication; order of publication; GAL for unknown parties.
  • Consequence of defective notice: A confirmed judicial sale is generally voidable for constitutionally defective notice / failure to join known interested parties; once confirmed and title vested, challenges are tightly limited. (Exact SOL / grounds to set aside a confirmed tax-sale deed — needs_verification.)
  • Leading cases: mckeithen-v-city-of-richmond, tyler-v-hennepin-county, jones-v-flowers, mullane-v-central-hanover, mennonite-v-adams.

7. Title & Marketability

  • Deed warranty level: Special commissioner’s deed (tax) / trustee’s deed (mortgage) — quitclaim-like conveyance of the foreclosed title, not a general warranty deed.
  • Marketable immediately? Practically often no — title underwriters commonly scrutinize the judicial-sale record (service, GAL, confirmation) and may require a quiet-title action before insuring, especially where heirs/unknown parties were reached only by publication.
  • Quiet title required? Frequently advisable for marketability/title insurance, even though confirmation vests title.
  • SOL to challenge deed: Challenges to a confirmed judicial sale are limited; the enforcement period for deeds of trust is set by Va. Code § 8.01-241. (Specific SOL to attack a confirmed tax-sale deed — needs_verification.) — https://law.lis.virginia.gov/vacode/title8.01/chapter4/section8.01-241/
  • Title insurance availability: Generally available after confirmation and any curative/quiet-title steps; underwriters focus on notice/joinder compliance.
  • Common defects: Defective/insufficient notice to owners, heirs, or recorded lienors; failure to join interested parties; mis-served or omitted junior lienors; unresolved surplus distribution (cf. McKeithen).

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
mckeithen-v-city-of-richmond (McKeithen, Successor Trustee of the Craig E. Caldwell Trust v. City of Richmond, Record No. 210389, Va.)2023surplus / due_processAfter a judicial tax sale fully satisfied Richmond’s tax lien, a $14,000 surplus went unclaimed by the senior (unknown-heirs) lienor. The Court held § 58.1-3967’s text directed that surplus to the City, but as applied that escheat unconstitutionally took the junior lienor’s (Caldwell Trust’s) vested property interest in the surplus, violating Va. Const. Art. I, § 11; the surplus belongs to the junior lienor, not the already-paid City.https://statecourtreport.org/sites/default/files/2023-12/McKeithen%20v.%20City%20of%20Richmond%20-%20Virginia%20Supreme%20Court%20210389%20-%2010.19.2023.pdf
tyler-v-hennepin-county (Tyler v. Hennepin County, 598 U.S. 631)2023surplusRetaining a former owner’s surplus equity beyond the tax debt is an unconstitutional taking under the Fifth Amendment. (Landmark anchor; decided ~4 months before McKeithen, which rested on the Virginia Constitution.)https://www.harrisbeachmurtha.com/insights/u-s-supreme-court-limits-municipalities-from-retaining-excess-value-in-tax-foreclosures/
mullane-v-central-hanover (Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306)1950due_processDue process requires notice “reasonably calculated, under all the circumstances,” to apprise interested parties; publication alone is insufficient for parties whose names/addresses are known. (Governs VA tax-sale order-of-publication practice.)https://supreme.justia.com/cases/federal/us/339/306/

Topic coverage note: surplus and due_process are each backed by a verified Virginia/federal case above. For redemption and sale_procedure, no on-point published Virginia appellate case was verified this pass; those modules rest on directly-retrieved statutes (§§ 58.1-3965, 58.1-3967, 58.1-3969, 55.1-321/322/324). See needs_verification.

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — A bankruptcy filing stays both the judicial tax suit and a trustee’s sale; the pre-sale redemption window effectively pauses while the stay is in effect. (VA-specific tolling mechanics — needs_verification.)
  • federal-tax-lien-redemption — A recorded federal tax lien gives the IRS a 120-day post-sale right to redeem (26 U.S.C. § 7425); applies in VA like other states.
  • heirs-property — Common in Virginia tax suits (e.g., McKeithen’s “unknown Jones beneficiaries”); unknown heirs are reached by order of publication and a guardian ad litem (§ 58.1-3967). Owners asserting rights by testate/intestate succession may trigger the installment-agreement suspension (§ 58.1-3965).
  • independent-city-recording — Virginia’s 38 independent cities are not part of any county; each runs its own treasurer/collection and circuit court for tax suits — relevant to where surplus is filed and records live.
  • void-vs-voidable — Confirmed judicial sales are generally voidable (not void) for notice defects; the McKeithen defect was constitutional as applied to surplus distribution, not a void sale.
  • tyler-v-hennepin-county — Post-Tyler, Virginia’s § 58.1-3967 already routes surplus to owner/lienors; McKeithen independently invalidated the escheat-to-locality backstop under the state constitution.
  • hoa-super-priority — No Nevada-style HOA super-priority regime; POA/COA assessment liens foreclose separately (§§ 55.1-1833, 55.1-1966). (VA specifics — needs_verification.)

10. Operations

  • Where records live: Circuit court clerk (tax-sale suits, confirmation orders, surplus registry); county/city treasurer (delinquent tax payoff, installment agreements); circuit court land records (deeds); commissioner of accounts (trustee-sale accountings); Virginia Dept. of the Treasury unclaimed property (separate from court-registry surplus).
  • Public access portals:
  • Typical costs: Redemption payoff = taxes + penalties + interest + reasonable attorney’s fees + costs (incl. pro-rata publication) (§ 58.1-3965). Court costs, appraisal, publication, and special-commissioner fees are added to the suit (§ 58.1-3969).
  • Typical timelines: TACS judicial sale ~1 year from referral; surplus claim window 2 years from confirmation (§ 58.1-3967); minimal-value nonjudicial sale surplus window 2 years from sale (§ 58.1-3975); trustee-sale notice 60/14 days (§ 55.1-321).
  • Key agencies: Local Treasurer; Circuit Court (clerk + judge); court-appointed special commissioner; commissioner of accounts (trustee sales); Virginia Dept. of the Treasury — Unclaimed Property.
  • Useful forms: Petition for release of surplus from court registry; installment agreement (treasurer); guardian-ad-litem appointment. (Forms are court/locality-specific — needs_verification.)

11. Meta

Legal information, not legal advice. This page summarizes Virginia law from the cited primary sources as of the last_verified date. Statutes, rates, locality practices, and case law change; independent cities and counties vary. Verify against the current Code of Virginia, the applicable locality’s treasurer and circuit court, and consult a licensed Virginia attorney before acting. Last verified: 2026-06-01.

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