Learn how mortgage and tax-sale surplus works in the District of Columbia, including who holds funds, claim deadlines, fees, and third-party rules.
| Foreclosure type | The District has both a nonjudicial power-of-sale track and a court foreclosure track. The law does not clearly name who conducts the power-of-sale auction or identify a sale officer. |
| Mortgage surplus | For a court-ordered sale, proceeds go into court to pay the mortgage debt. The law does not say who holds any surplus after that or who is entitled to it. In *Kayan*, a purchaser seeking damages tied to the former owner's alleged post-sale occupancy could pursue them in an ejectment action, not by intervening in the foreclosure case. |
| Tax sale surplus | For covered owner-occupant properties, the purchaser receives 10% or $20,000, whichever is less, from remaining proceeds. A separate tax-certificate foreclosure route sends surplus to the court registry under § 47-1315. For sales under §§ 47-1312 to 47-1315, surplus unclaimed for five years after sale confirmation goes to the U.S. Treasury and is credited to D.C. |
| Deadlines | No general claim window is spelled out. For sales under §§ 47-1312 to 47-1315, surplus unclaimed for five years after sale confirmation is paid to the U.S. Treasury and credited to D.C. |
| If no one claims it | Mortgage surplus rules are unclear. For sales under §§ 47-1312 to 47-1315, unclaimed surplus goes to the U.S. Treasury after five years. The rule for other tax-sale tracks is not spelled out here. |
| Fees and agreements | Gray area. Fee caps and rules for recovery agreements are not spelled out. |
| Third parties | Gray area. The rules do not spell out whether an agent, assignee, power of attorney holder, or attorney can claim for an owner. |
Checked against the official state code and government office pages in November 2026.
The District of Columbia has two real estate sale tracks: mortgage foreclosure and tax sale. The surplus rules differ, so keep the tracks separate.
A mortgage foreclosure may use a power-of-sale provision or go through court. The law covers foreclosure under a power of sale in a deed of trust, mortgage, or other security instrument. It also gives the equity court authority over applications to foreclose a mortgage or deed of trust. See § 42-815(b), § 42-816, and § 42-815(a).
For a court-ordered sale, the proceeds go into court to pay the mortgage debt. That gives you a clear place to start when tracking a court sale. But these provisions don’t say who gets any money left after the debt is paid. Older rules on foreclosure proceeds are repealed, so they don’t give a current distribution rule. See § 42-842.04.
In *Kayan, LLC v. Yunus*, the D.C. Court of Appeals affirmed the denial of a foreclosure purchaser’s request to join a foreclosure case as of right to seek surplus funds for damages based on the former owner’s alleged post-sale occupancy. The court said the purchaser could seek those damages in an ejectment action. This ruling does not decide who is generally entitled to mortgage surplus. See *Kayan, LLC v. Yunus*.
The law refers to a mortgagee or trustee in connection with sale terms. It doesn’t clearly say who conducts a power-of-sale sale or name a sheriff, referee, or other sale officer. That may affect where you look for records or funds.
For the owner-occupant properties covered by § 47-1382.01, the Superior Court appoints a trustee after final judgment forecloses the right of redemption. The trustee sells the property and distributes the proceeds in the order set by law.
The payments go first to trustee compensation and expenses, the Mayor, and amounts due to the purchaser. From what remains, the purchaser gets 10% or $20,000, whichever is less. Under § 47-1330(5), “purchaser” can also mean the certificate holder, an assignee or transferee of the certificate, the plaintiff, or the District, depending on the context. The rest goes to the person or people entitled to it. The trustee decides the proper shares, or a court does when needed. See § 47-1382.01.
A separate rule covers overpayments. The Mayor pays an overpayment to the person who made it. If people dispute who should receive it, the Mayor holds it until a court decides how to distribute it. See § 47-1382(h).
A tax-certificate foreclosure has a separate route. The court may order the winning plaintiff to sell the property privately at fair market value to pay the lien, fees, and costs. Any surplus must be paid as provided under § 47-1315. See § 47-1303.04(h)(3).
For sales under §§ 47-1312 to 47-1315, the Collector of Taxes pays any surplus into the court registry for payment to the person or people entitled to it. Any amount still unclaimed five years after sale confirmation must be paid to the U.S. Treasury and credited to D.C. This rule is limited to those sales. It does not state what happens to unclaimed surplus from every tax-sale track. See § 47-1315.
These rules give the trustee a role in distributing tax-sale proceeds. They don’t explain whether a recovery agent, assignee, or power of attorney holder may file a claim for an owner. They also don’t set recovery-agent fee terms. Don’t treat that silence as permission or a ban. Check claim authority and agreements before taking action.
D.C. has a court-controlled process for tax sales of covered owner-occupied homes. The Superior Court appoints a trustee to sell the property. The court then orders the trustee to pay out the money in a set order. After the purchaser's share, the rest goes to the people entitled to it "as determined by the trustee, or, when necessary, a court." That's in D.C. Code § 47-1382.01(d).
For some tax sales under §§ 47-1312 to 47-1315, surplus goes into the court registry. Amounts unclaimed five years after sale confirmation go to the U.S. Treasury and are credited to D.C. See § 47-1315.
For mortgage foreclosures, D.C.'s old rules on paying out sale proceeds were repealed. See § 42-842.04. We didn't find a current rule that says who gets the leftover money.
We also didn't find a D.C. law or official page that lays out a path for a recovery agent, or an attorney, to claim surplus for an owner. That doesn't mean it can't be done. It means there's no clear map. If you work D.C., plan on a licensed D.C. attorney and the court file from day one.
I've been recovering surplus funds since 2013. That's over 2,000 cases and more than $100 million recovered for foreclosure victims across the country. Families may be dealing with a difficult moment, and a clear, careful answer can make a difference. A good next step is to read the sale statutes and ask a licensed District of Columbia attorney about any claim you plan to make.
If you want to learn how this business actually works, join the free Surplus Funds Masterclass at surplusfunds.ai, or join the free Surplus Funds Collective community on Skool at skool.com/surplusfunds.
This guide is education, not legal advice. Laws change, so check the official statute and talk to a licensed attorney in your state before you act.
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