Maryland mortgage and tax-sale surplus rules, including claim steps, contract protections, county procedures, and when a court order may be required.
| Foreclosure type | Maryland real-property foreclosures are court actions. The court appoints a trustee to conduct the sale as its agent. (Md. Code, Real Prop. § 14-103; Md. Rules 14-201 through 14-218) |
| Mortgage surplus | People with an interest in the property or sale proceeds may apply. The court distributes the funds among claimants. |
| Tax sale surplus | The balance goes to the person entitled to it, primarily the property owner or owners. Each county must have a uniform claim process. It generally cannot require a court order unless payment is disputed. |
| Deadlines | Mortgage claims are due before final ratification of the auditor’s account. A homeowner may cancel a surplus-purchaser contract within 10 days after the statement of audit account. A collector must notify the prior owner of record about a tax-sale balance and claim process within 90 days after delivering the deed. The statute does not set a tax-sale claim deadline. |
| If no one claims it | The rules do not say where unclaimed mortgage or tax-sale surplus goes. Ask the court or collector handling the funds. |
| Fees and agreements | Mortgage-surplus contracts must meet detailed content, format, signing, and notice rules. Certain terms are void, including waivers of statutory rights, out-of-state jurisdiction or choice of law, improper venue, and costs above circuit-court filing fees. |
| Third parties | State law requires a uniform county process for tax-sale balance claims and generally bars requiring a court order unless payment is disputed. Howard and Frederick County pages describe court steps for some third-party claims. Check with the county about current procedures. |
Checked against the official state code and government office pages in November 2026.
Maryland has two surplus-funds tracks: mortgage foreclosure sales and tax sales. The rules and payout steps differ. First, identify the type of sale.
Anyone with an interest in the property or sale proceeds can apply for surplus. The court distributes the funds fairly among claimants. (Md. Rule 14-216(a)) A former owner may receive funds. A lienholder may also be paid. In one case, a second-priority lienholder received the surplus. (Opinion by Ripken, J.) A foreclosure buyer may also seek surplus in the foreclosure case for wrongful holdover or voluntary waste, if the legal requirements are met. (Maryland Rules 14-102 and 14-208; Opinion on voluntary waste)
The claim window opens after the sale and closes when the auditor’s account gets final ratification. (Md. Rule 14-216(a)) After the sale is ratified, the court may send the matter to an auditor. (Md. Rule 14-305) Don’t assume that happens automatically. A claimant may ask the court to reopen and revise a judgment within 30 days after it is entered, but the court decides whether to grant the request. (Md. Rule 2-535) The rules explain the claim and payout process, but don’t say who usually holds the funds.
Maryland sets detailed rules for contracts between homeowners and foreclosure surplus purchasers. A purchaser includes a person who acquires surplus by assignment, purchase, grant, or conveyance, and a person acting with an acquirer in a joint venture or joint enterprise. (Md. Code, Real Prop. § 7-301)
The written contract must contain the entire agreement. It must be printed in at least 12-point type and in the language used to negotiate the sale. It must identify the purchaser and property, state the total consideration and payment terms or services, and include the purchaser’s business address and phone number. Both parties must complete, date, and personally sign it before the account goes to the auditor. A required notice must appear in at least 14-point bold type near the homeowner’s signature, with the purchaser’s name filled in. (Md. Code, Real Prop. § 7-314)
The contract must also include two completed copies of a separate, easy-to-detach Notice of Rescission form. It must include the required statement in at least 15-point type. The purchaser must give the homeowner a copy of the signed contract and notice. (Md. Code, Real Prop. § 7-314)
A homeowner may rescind within 10 days after the statement of audit account. To rescind, the homeowner mails or delivers a signed and dated Notice of Rescission to the purchaser at the address on the notice, with a copy to the court-appointed auditor. (Md. Code, Real Prop. § 7-314(c)(2)(iii)) The right to rescind cannot depend on repayment first. The homeowner must repay consideration received directly or indirectly, plus 8% annual interest. After receiving notice, the auditor must restate the account and include the homeowner’s repayment and interest in a revised account filed with the court. (Md. Code, Real Prop. § 7-315)
Some contract terms are void. These include waivers of rights under this title; consent to jurisdiction or choice of law in another state; consent to venue outside the county where the property is located; and costs or filing fees above the fees to file an action in circuit court. No one may induce or try to induce a homeowner to waive rights under this subtitle. (Md. Code, Real Prop. §§ 7-314(f), 7-318)
A separate set of rules applies if an agreement is also a foreclosure consulting contract. Such a contract must be given to the homeowner for review before signing, state the services and compensation, and meet signing and format rules. The homeowner may rescind it at any time. A foreclosure consultant cannot collect compensation until all promised services are complete or receive a commission above 8% of the sale price of a residence in default. These rules do not automatically apply to every surplus-purchaser agreement. (Md. Code, Real Prop. §§ 7-305 to 7-307) For this subtitle, a homeowner is the record owner of a residence in default or foreclosure, or a person living there under a use and possession order. (Md. Code, Real Prop. § 7-301(i))
After foreclosure of the right of redemption, any balance above the taxes, interest, penalties, and sale costs goes to “the person entitled to the balance.” A Maryland appellate court said this phrase mainly refers to the property owner or owners, not mortgage lienholders or other creditors. (Md. Code, Tax-Prop. § 14-818(a)(4)(i); Appellate opinion)
Each county must establish a uniform process to claim the balance. The process generally cannot require a court order unless payment is disputed. If payment of the balance is disputed, the collector pays it to a court with jurisdiction until a court order decides who gets it. Within 90 days after delivering a deed to a buyer, the collector must notify the prior owner of record of any balance and how to claim it. The statute does not set a deadline for the owner to file a claim. (Md. Code, Tax-Prop. § 14-818(a)(5)-(6))
When the court enters judgment, the plaintiff pays any surplus bid to the collector, along with the taxes, interest, and penalties due. (Md. Code, Tax-Prop. § 14-844) A tax-sale purchaser cannot use a surplus petition to recover post-sale water charges, environmental citations, or other taxes it paid to obtain the deed. (Appellate opinion)
In Baltimore City, if the court finds for the plaintiff in a proceeding concerning an owner-occupied residential property, the final judgment must state whether there is a bid balance. It must also say that the former owner’s portion of the bid balance may be obtained by contacting the Baltimore City Bureau of Revenue Collections. (Md. Code, Tax-Prop. § 14-844) This direction applies to the cases described. Ask the collector handling the sale how to make a claim.
A 2013 court opinion described Baltimore City’s March 31, 2008 procedures for third-party claims. They required a written request signed by an authorized officer of the third party, a signed and notarized power of attorney, an affidavit of verification, and identification for the person the request was made for. These were the procedures described in that opinion, not confirmation of current requirements. Check with the City. (Appellate opinion)
The mortgage rule lets someone with an interest apply. It doesn’t name agents or give a general right for a helper to file for someone else. Check that any agreement follows the surplus-purchaser rules above.
County procedures may add steps, but state law requires each county’s tax-sale balance process to apply uniformly and generally may not require a court order unless payment is disputed. Howard County says third-party service providers must file claims through the Circuit Court for Howard County and that the County won’t pay a third party without a signed court order. Frederick County also describes court adjudication for people not entitled to the proceeds and says an agent using a financial power of attorney must provide a copy. These are county procedures. Howard County also tells third-party service providers not to contact the County for claim-filing information, so read each county page before you act.
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. These claims involve people who may already have been through a difficult time. A careful, respectful approach matters. Start by identifying the sale track and asking the office handling the money what it needs.
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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