Payment of Excess

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  1. If there are any excess funds after paying taxes, costs, and all expenses of a sale made by the tax commissioner, tax collector, or sheriff, or other officer holding excess funds, the officer selling the property shall give written notice of such excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale. The notice shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist.
  2. The tax commissioner, tax collector, sheriff, or other officer may file, when deemed necessary, an interpleader action in superior court for the payment of the amount of such excess funds. Such excess funds shall be distributed by the superior court to the intended parties, including the owner, as their interests appear and in the order of priority in which their interests exist. The cost of litigation of such an interpleader action, including reasonable attorney's fees, shall be paid from the excess funds upon order of the court.
  3. After five years have elapsed from the tax sale date, the tax commissioner, tax collector, sheriff, or other officer holding excess funds shall pay over to the department any excess unclaimed funds and for which no action or proceeding is pending in a claim for payment. Once excess funds are placed in the possession of the department, only a court order from an interpleader action filed in the county where the tax sale occurred, by the claimant for the funds, shall serve as justification for release of the funds.

(Orig. Code 1863, § 814; Code 1868, § 894; Code 1873, § 892; Code 1882, § 892; Civil Code 1895, § 912; Civil Code 1910, § 1175; Code 1933, § 92-8106; Code 1933, § 91A-405, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 2002, p. 1481, § 3; Ga. L. 2006, p. 770, § 5/SB 585; Ga. L. 2010, p. 878, § 48/HB 1387.)

Editor's notes.

- Ga. L. 2006, p. 770, § 8, not codified by the General Assembly, provides: "The provisions of this Act shall apply to all executions transferred on or after July 1, 2006. Executions transferred prior to July 1, 2006, shall not be affected by this Act."

Law reviews.

- For annual survey on real property, see 65 Mercer L. Rev. 233 (2013).

JUDICIAL DECISIONS

Standing.

- Bank did not lack standing to participate in the interpleader action and to move for contempt against the redeeming creditor because the bank, as the grantee of the security deed, had an ownership interest in the property. J. Michael Vince, LLC v. SunTrust Bank, 352 Ga. App. 791, 835 S.E.2d 809 (2019).

Responsibility of holding excess funds in the levying officer.

- Language of O.C.G.A. § 48-4-5 directing that excess funds be paid over to the "person authorized to receive the excess" should be consistently construed. Thus, regardless of who owns the tax execution, the sheriff holds excess tax sale funds as the fiduciary of the record property owner and is not authorized to release such funds to the transferee of the tax execution. Alexander Inv. Group, Inc. v. Jarvis, 263 Ga. 489, 435 S.E.2d 609 (1993).

As against the lienee, the lienor has no right to the excess from a sale of the encumbered property under tax fieri facias, even were the security returned for taxation and assessed in the name of the lienor, since under this statute the excess from any tax sale is to be paid to the person authorized to receive the excess. Particularly is this true if the lienor has contracted to keep the taxes on the property paid; the fact that the property was improperly returned for taxation in the name of the husband of the lienor and the tax assessed against the property in his name would not render the husband the person authorized to receive such excess from the tax sale. Simmons v. May, 53 Ga. App. 454, 186 S.E. 441 (1936).

Effect of nonpayment of excess on right of redemption.

- Fact that "excess" was never paid to the sheriff or settled in any manner furnishes an additional reason why the tax sale was not complete, relative to the owner's right to redeem. Zugar v. Scarbrough, 186 Ga. 310, 197 S.E. 854 (1938).

Accrual of interest on surplus.

- When a sheriff sells land as the property of an unrepresented estate for taxes and, after payment of the taxes and cost, a surplus remains in the sheriff's hands, the sheriff's term of office expires and the sheriff thereafter dies, and a number of years ensue before there is any administration upon the estate of the person whose property has thus been sold, in a suit by the administrator upon such estate upon the official bond of the sheriff, interest should be counted from the date of the qualification of the administrator. Morrison v. Slaton, 148 Ga. 294, 96 S.E. 422 (1918).

Transfer of entitlement to excess funds allowed.

- As a matter of law, a defendant in fieri facias can effect a transfer of the defendant's entitlement to the excess funds generated in a tax sale under O.C.G.A. § 48-4-5. Barrett v. Marathon Inv. Corp., 268 Ga. App. 196, 601 S.E.2d 516 (2004).

State of title held by purchaser or purchaser's grantee pending period of redemption.

- Trial court properly granted summary judgment to an association, and the association's employee and a board member, on the claims by a property purchaser against them for extortion and removal of liens arising out of the purchaser's failure to pay association fees after purchasing seven properties in a subdivision through a tax sale resulting from unpaid property taxes; while it was true that the purchaser did not obtain a fee simple absolute title, and that title could be restored to specified predecessors through redemption or before the purchaser gave notice pursuant to O.C.G.A. § 48-4-45, the purchaser did receive title sufficient to trigger automatic membership in the association and was thus required to pay its assessed fees. Croft v. Fairfield Plantation Prop. Owners Ass'n, 276 Ga. App. 311, 623 S.E.2d 531 (2005).

Second unauthorized tax sale did not affect fee simple title of buyer at first tax sale.

- Although a county did not have the recognized statutory option of conducting a second tax sale in order to satisfy the remainder of the tax deficiency owed, and while the assignee who took the property as a result of the second tax sale might be entitled to a refund of the purchase price, the special master's recommendation to issue a decree of fee simple title in the underlying property to the buyer at the first tax sale was upheld on appeal. DRST Holdings, Ltd. v. Agio Corp., 282 Ga. 903, 655 S.E.2d 586 (2008).

Tax deed purchaser responsible for taxes after tax sale.

- Tax deed purchaser, not the church, a defendant in fi. fa., was obligated to pay ad valorem taxes that accrued after the tax sale and before redemption, and the tax commissioner could not use the excess funds to satisfy the buyer's tax obligation that occurred after the tax sale. Iglesia Del Dios Vivo Columna Y Apoyo De La Verdad La Luz Del Mundo, Inc. v. Downing, 321 Ga. App. 778, 742 S.E.2d 742 (2013).

No right to excess funds generated by tax sale.

- Trial court did not err in granting a tax commissioner summary judgment in a lienholder's action under O.C.G.A. § 15-13-3 to recover excess funds from a tax sale because at the time of the tax sale, at the time the tax commissioner notified the record owner of the property and record lienholders of the excess tax sale funds, and at the time the tax commissioner paid the excess tax sale funds to the record owner of the property, the lienholder had no recorded lien or interest in the property; after the tax commissioner fulfilled the obligation under O.C.G.A. § 48-4-5(a) to give notice to the record property owner and lienholders, the property owner submitted the only claim to the tax commissioner for the excess tax sale funds, and the lienholder failed to show that more was required of the tax commissioner before the funds were disbursed. Brina Bay Holdings, LLC v. Echols, 314 Ga. App. 242, 723 S.E.2d 533 (2012), overruled on other grounds, DLT List, Inc. v. M7ven Supportive Hous. & Dev. Group, 335 Ga. App. 318, 779 S.E.2d 436 (2015).

In Wester v. United Capital Financial of Atlanta, LLC, 282 Ga. App. 392 (2006) and again in United Capital Financial of Atlanta v. American Investment Assoc., 302 Ga. App. 400 (2010), the Georgia Court of Appeals held that a creditor who redeems property following a tax sale has first priority to excess funds resulting from that tax sale, but properly overruled those decisions in DLT List, LLC. v. M7VEN Supportive Housing & Dev. Group, 335 Ga. App. 318 (2015) concluding that a redeeming creditor has no such priority. DLT List, LLC v. M7VEN Supportive Hous. & Dev. Group, 301 Ga. 131, 800 S.E.2d 362 (2017).

Redeeming creditor of a tax-sale property does not have a priority lien against excess funds arising from that sale. DLT List, LLC v. M7VEN Supportive Hous. & Dev. Group, 301 Ga. 131, 800 S.E.2d 362 (2017).

Entitlement to excess funds after tax sale.

- Trial court erred by granting summary judgment to the property owner because the trial court erred by holding that the security deed holder lost the holder's right to excess funds that arose from the tax sale as the relevant date under O.C.G.A. § 44-14-80 when considering who was entitled to the excess funds from the tax sale was the tax sale date, not the fund distribution date. Worthwhile Investments, LLC v. Higgins, 337 Ga. App. 183, 787 S.E.2d 245 (2016).

Trial court erred by awarding excess funds from a tax sale to a redeeming creditor because although the creditor had an interest in the property at the time of the tax sale that gave the creditor a statutory right of redemption, it was undisputed that the creditor's security deed had now been fully satisfied, and the creditor no longer retained any priority lien on the property; thus, the administrator of the original owner's estate was the party entitled to receipt of the funds. Bridges v. Collins-Hooten, 339 Ga. App. 756, 792 S.E.2d 721 (2016).

Lender who had purchased a tax deed had a defeasible fee in the property, which became a fee simple interest when the property was not redeemed; excess proceeds from the tax sale were to be distributed first to the lender and then to any other recorded lien holder; and the lender's first-priority security lien was not merged into the tax deed purchase. However, the lender failed to show the amount owed, requiring reversal of the judgment in the lender's favor. Performance Food Group, Inc. v. Davis, 346 Ga. App. 487, 816 S.E.2d 468 (2018).

Recovery of excess proceeds from tax commissioner.

- Holding company was entitled to recover from the tax commissioner the amounts necessary to pay the tax executions from the excess proceeds of the tax sales before any payments to the owners of record at the time of the tax sale. As the holder of the tax liens, the holding company had the right to be paid "before any other debt, lien, or claim of any kind" could be claimed by the parties entitled to receive them, including those who hold other liens against the property. Scott v. Vesta Holdings I, LLC, 275 Ga. App. 196, 620 S.E.2d 447 (2005).

Interpleader and attorney fees awarded to tax director.

- Trial court properly allowed the Georgia Tax Director to interplead in the tax sale action regarding disbursement of excess funds and award the director attorney fees because O.C.G.A. § 48-4-5(b) permitted interpleader as well as a reasonable attorney fee and the fee was not conditioned upon litigation. Bridges v. Collins-Hooten, 339 Ga. App. 756, 792 S.E.2d 721 (2016).

Original owner not redeemer was entitled to excess proceeds of tax sale.

- Pursuant to O.C.G.A. § 48-4-5(a), a county tax commissioner was properly ordered to disburse excess tax-sale funds totaling $105,188 to the original owner of the property and not the redeemer of the property from a tax sale purchaser; the redemption price would be the first priority lien, here the only lien, against the property going forward. DLT List, LLC v. M7VEN Supportive Hous. & Dev. Group, 335 Ga. App. 318, 779 S.E.2d 436 (2015).

To the extent that Wester v. United Capital Finance of Atlanta, LLC, 282 Ga. App. 392, 638 S.E.2d 779 (2006), and United Capital Finance of Atlanta v. American Investment Assoc., 302 Ga. App. 400, 691 S.E.2d 272 (2010), held that the redeeming creditor at a tax sale had a first priority claim on the excess tax funds for the amount paid to redeem the property, those cases are overruled. DLT List, LLC v. M7VEN Supportive Hous. & Dev. Group, 335 Ga. App. 318, 779 S.E.2d 436 (2015).

County's immunity from suit.

- Pursuant to O.C.G.A. § 36-1-4 and Ga. Const. 1983, Art. I, Sec. II, Para. IX(e), a county was immune from a lender's suit because the lender pointed to no statute creating a waiver of immunity or any factual scenario warranting a waiver with respect to the lender's claim that the county failed to give it notice of the availability of excess funds following a tax sale as required by O.C.G.A. § 48-4-5. Bartow County v. S. Dev., III, L.P., 325 Ga. App. 879, 756 S.E.2d 11 (2014).

Cited in Nat'l Tax Funding, L.P. v. Harpagon Co., 277 Ga. 41, 586 S.E.2d 235 (2003).

RESEARCH REFERENCES

Am. Jur. 2d.

- 72 Am. Jur. 2d, State and Local Taxation, § 812.

C.J.S.

- 33 C.J.S., Executions, § 429. 85 C.J.S., Taxation, §§ 1312, 1313.

ALR.

- Tax deed and recitals therein as evidence of regularity of tax proceedings as to advertising and notice of sale, and as to time, manner, and place of sale, 30 A.L.R. 8; 88 A.L.R. 264.

Sale of property at tax sale for more or less than the amount of taxes, penalties, and costs as affecting its validity, 97 A.L.R. 842; 147 A.L.R. 1141.


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