Q: How long can someone hold on to proceeds from a tax default sale after the selling county released them

A: In California, after a tax-defaulted property is sold, the proceeds from the sale, after deducting the amount owed for taxes and the costs associated with the sale, are typically due to the former property owner. The county has specific procedures and timelines for disbursing these excess proceeds to the rightful claimant(s). According to California Revenue and Taxation Code Section 4675, claimants have a period of one year from the date of the tax sale to file a claim for these excess proceeds.

Once a claim for excess proceeds has been filed within this one-year period, the county treasurer or tax collector is responsible for reviewing and processing the claim. If the claim is approved, the county should disburse the funds to the rightful owner as promptly as administrative procedures allow. There is no specific legal timeframe for when the county must release the funds after the claim is filed, but counties generally aim to process these claims efficiently.

If there's a delay in receiving the excess proceeds after a claim has been filed and approved, the former property owner or their legal representative may need to follow up with the county treasurer or tax collector's office. In cases where the delay seems unreasonable, seeking legal advice or assistance may be necessary to ensure that the funds are released in a timely manner. It's important to keep all documentation and correspondence related to the claim, as this can be helpful in resolving any issues with the disbursement of the proceeds.