Hawaii surplus funds guide for recovery agents: mortgage payout order, Kaua‘i and Hawaii County tax-sale claim rules, deadlines, unclaimed funds, fees, and helper limits.
| Foreclosure type | Hawaii allows court foreclosure and power-of-sale foreclosure. For an association power-of-sale sale, the association declares the unit sold to the successful bidder. Who conducts a court-ordered sale is not specified. |
| Mortgage surplus | For sales covered by HRS § 667-31, proceeds pay costs and liens in the order set by law. Valid junior lienholders are paid by priority, not pro rata. Any remaining surplus goes to the mortgagor. Association power-of-sale foreclosures have a separate order under HRS § 667-100(b). |
| Tax sale surplus | Kaua‘i’s rule gives recorded lien claimants one year to file with the Director. Hawaii County’s rule gives record lienholders one year and the taxpayer two years to claim. The rules differ by county. |
| Deadlines | No mortgage-surplus claim deadline is addressed here. Kaua‘i’s rule gives recorded lien claimants one year. Hawaii County’s rule gives record lienholders one year and the taxpayer two years. Under HRS § 246-63, tax-sale surplus held in the treasury may escheat to the State after ten years if no claimant starts an action. |
| If no one claims it | The mortgage rules discussed here do not say where unclaimed surplus goes. Kaua‘i’s rule directs remaining surplus to the County general fund after payment to everyone entitled. A separate state law provides for escheat to the State after ten years in certain cases. |
| Fees and agreements | Gray area. Fee caps and agreement rules for surplus helpers are not addressed. |
| Third parties | Gray area. The mortgage rules do not say if an agent or assignee may claim for an owner. In Kaua‘i, the Director may require claimants to interplead in court when entitlement is in doubt. That is not a general helper rule. |
Checked against the official state code and government office pages in November 2026.
Hawaii’s mortgage rules discussed here don’t set a claim deadline. We didn't find a waiting period spelled out in the state code or on official sites. Treat it as a gray area.
For sales covered by HRS § 667-31, proceeds first pay liens and encumbrances by legal priority, the foreclosing mortgagee’s fees and costs, foreclosure costs, and the money owed to that mortgagee. Any balance pays valid junior lienholders in priority order, not pro rata. Any surplus left after all valid lienholders are paid goes to the mortgagor. A prior lienholder is not required to recover from the sale proceeds. That lienholder and the foreclosing mortgagee may agree in writing to pay the prior lienholder from the proceeds before the foreclosing mortgagee is paid.
For an association power-of-sale foreclosure, HRS § 667-100(b) sets a separate order. Proceeds pay the association’s attorney fees and costs, foreclosure fees and costs, money owed to the association, and then other liens and encumbrances by legal priority. Remaining proceeds go to valid junior lienholders in priority order, not pro rata. Any surplus after all valid lienholders are paid goes to the unit owner.
HRS § 667-3 also says a foreclosure judgment carried out under that part extinguishes later mortgages and liens on the property. It does not take away a prior mortgagee’s or lienholder’s right to recover. In a court foreclosure, the foreclosing party must join all prior and later mortgage creditors whose names it knows or can find. See HRS § 667-2.
One court opinion describes excess proceeds deposited with the court, pending further instructions. That’s an example, not a rule for every surplus fund. For a specific sale, check with the foreclosing mortgagee or the court handling the sale.
The Kaua‘i tax-sale rule discussed here applies only to Kaua‘i. It says recorded liens are paid from surplus in priority order if a claim is filed with the Director within one year of the sale. See Kaua‘i County Code § 5A-5.9.
Hawaii County has a different rule. Under Hawaii County Code § 19-45, record lienholders must file within one year of the sale. The taxpayer whose property was foreclosed may claim surplus remaining after taxes are paid by filing within two years. A lienholder who misses the one-year deadline has no right to the surplus.
HRS § 246-63 says the officer charged with distributing tax-sale surplus handles payment. The money may remain on deposit in the treasury while awaiting distribution. If entitlement is unclear, a claimant may sue that officer. If surplus remains in the treasury for ten years after the sale and no claimant starts an action to recover it during that time, the director of finance must begin proceedings to have the money escheat to the State.
For mortgage surplus, the rules discussed here don’t say what happens if no one claims the money. Under the Kaua‘i tax-sale rule, remaining surplus goes to the County general fund after payment to everyone entitled. The rule gives recorded lien claimants a one-year filing period. It doesn’t say missing that period automatically forfeits all surplus.
Hawaii County Code § 19-45 says a record lienholder who misses the one-year deadline has no right to the surplus. It gives the taxpayer two years to claim surplus remaining after taxes are paid. Separately, under HRS § 246-63, if surplus remains in the treasury for ten years after the sale and no claimant starts an action to recover it, the director of finance must begin proceedings to have it escheat to the State.
The tax provisions do not identify every person who may qualify. Check the applicable county’s sale rules before treating tax surplus as available to a former owner or lienholder.
Hawaii allows foreclosure by court action and nonjudicial foreclosure by power of sale. For an association power-of-sale public sale, the association declares the unit sold to the successful bidder. See HRS § 667-98. The chapter doesn’t say who conducts a court-ordered sale. It doesn’t identify a sheriff, trustee, or other sale officer. See Chapter 667.
For court foreclosures, the foreclosing party must join all prior and later mortgage creditors whose names it knows or can find. See HRS § 667-2.
For mortgage surplus, the rules don’t say if an agent, attorney-in-fact, or assignee may file or receive the claim. A mortgage may let the mortgagee sell or transfer property as the owner’s agent under HRS § 667-10. The rule does not address whether that authority lets a recovery helper claim surplus.
For Kaua‘i tax surplus, the Director may refuse distribution if unsure who’s entitled. The Director may require claimants to interplead in the Third Circuit Court. This covers disputes over entitlement. It doesn’t give helpers a general right to file claims. Under HRS § 246-63, a claimant may also sue the officer charged with distributing the surplus if entitlement is unclear.
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. I know these rules can feel complicated when a family is waiting for an answer. Start by confirming which sale process applies. Then ask the responsible office how it handles claims.
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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