2015 Tennessee Code
Title 67 - Taxes And Licenses
Chapter 5 - Property Taxes
Part 27 - Redemption
§ 67-5-2702 - Motion setting forth claim to excess sale proceeds -- Service of motion -- Hearing on motion -- Recovery of excess proceeds paid in error.

(a) Following entry of the order of confirmation of sale, any interested person, as defined in this chapter, may file a motion with the court requesting disbursement of any excess sale proceeds pursuant to this section.

(b) A copy of such motion shall be served, in the manner prescribed by the Rules of Civil Procedure, on all parties to the underlying action, no later than thirty (30) days prior to the hearing date of the motion.

(c) At the hearing, the court shall order that any remaining redemption period shall be terminated as to the movant and as to any other person entitled to redeem property who consents to such termination as evidenced by their signature on such order, and any excess proceeds be paid according to the following priorities to each party that establishes its claim to the proceeds:

(1) To the tax entity or entities prosecuting the delinquent tax sale, for any remaining or subsequent outstanding taxes that are a lien against the property;

(2) To any lienholder, private or public, holding a claim against the property at the time of the tax sale, for the amount proven to be due under such lien, in accordance with priorities established by applicable law;

(3) To any lienholder, private or public, holding a claim against the property arising after the tax sale, for the amount proven to be due under such lien, in accordance with priorities established by applicable law;

(4) To any taxpayer, according to such taxpayer's interest at the time of the tax sale; provided, that such taxpayer was a defendant in the underlying action, or acquired by will or intestate succession the interest in the property of a former taxpayer who was a defendant in the underlying action; and

(5) Any remaining excess proceeds shall be subject to the Uniform Disposition of Unclaimed Property Act, compiled in title 66, chapter 29, part 1. A motion for excess proceeds may be filed in the court in which the proceeding is pending until such time as the funds are actually forwarded to the state pursuant to the Uniform Disposition of Unclaimed Property Act. For the purposes of § 66-29-110, the presumption of abandonment shall not arise until the final determination of all filed motions for redemption and excess proceeds or one (1) year following the expiration of the redemption period for that parcel, whichever is later.

(d) A person who claims to be the owner of an interest in a parcel, which is the subject of a motion to claim any excess proceeds from a delinquent tax sale shall record the document effecting such ownership, or an abstract thereof, or an affidavit of heirship, in the office of the register of deeds for the county in which the parcel is located, prior to thirty (30) calendar days before the day on which the motion is scheduled to be heard. A person who fails to timely record such document shall not be entitled to notice of the motion to claim excess proceeds as referred to in subsection (a).

(e) In the event an owner who failed to receive notice of the motion to claim excess proceeds, absent any fault on the owner's part, claims that a person has received excess proceeds in error or in excess of the person's correct share to the detriment of the owner, the owner shall have a right of action against such person for the recovery of such excess proceeds as may have been paid in error. Such right of action shall be the exclusive remedy of such an owner.

(f) For the purposes of this section, "in accordance with priorities established by applicable law" means that the priority of the interests in the parcel shall transfer to the proceeds from the sale of the parcel.

(g) In the event the court directs the delinquent tax attorney or an attorney ad litem to participate in the excess sale proceeds portion of the proceedings as an assistance to the court, the court may allow a reasonable attorney's fee to be assessed as directed by the court.