Tax Overages Contract Checklist: What Your Recovery Agreement Must Say

The agreement is where a tax overages business is won or lost. If it breaks your state's rules — charges more than the cap, skips a required disclosure, or is signed too early — a county or court can refuse to honor it, and you have done the work for nothing. This is not a template. It is a checklist of what to look for, so your conversation with an attorney in your state is short and useful.

First: which kind of agreement is it?

• Fee agreement (contingency). The owner keeps the claim. You help them recover it and receive a fee when it pays.
• Assignment (buying the claim). You pay the owner now and become the party entitled to collect.

States treat these differently. Texas, for example, bars non-attorneys from charging any fee to recover excess proceeds for an owner, but allows buying the claim under strict conditions. Know which one your state allows before you write anything.

The checklist

1. The free-claim disclosure

Many states require the agreement to tell the owner, clearly, that they can claim the funds directly from the county at no cost. Even where it is not required, including it protects you: it is the first thing an owner, a clerk, or a judge will look for.

2. A fee at or under your state's cap

There is no national rate. Examples of state rules: California caps the fee at the greater of $2,500 or 5%; Colorado at 20% after statutory waiting periods; Arizona at 30%; Florida caps assignee compensation (around 12% on foreclosure surplus). In Texas, a non-attorney may not charge a fee, and an attorney is capped at the lesser of 25% or $1,000. See tax overages rules by state.

3. Timing and waiting periods

Some states do not let you sign an owner, or buy a claim, until a set time after the sale or deposit. Texas requires at least 36 days after the excess proceeds are deposited before a claim can be assigned. An agreement signed inside a waiting period may be void.

4. How the owner was contacted

Some states restrict the method of contact. Texas bars buying a claim through in-person or telephone solicitation. Keep a record of how first contact happened.

5. Payment terms for assignments

If you are buying the claim, your state may set how much the owner must receive and when. In Texas, at least 80% of the amount must be paid to the owner upfront, and the assignee's recovery is capped at 125% of what was paid.

6. The exact amount and source

Name the county, the office holding the funds, the case or sale reference, and the amount as the county currently states it. Lists go stale, so confirm the balance with the county before signing and describe it as an estimate.

7. Who is signing

If the owner has died, the person signing must have the legal right to claim, usually established through probate or a state heirship procedure. An agreement with one heir may not cover the others.

8. Registration or licensing

Some states require recovery agents to register or be licensed, and some require that registration be stated in the agreement. Check before you use the agreement.

9. Notarization and filing requirements

Many counties require notarized claim forms and specific supporting documents. Your agreement should not promise a timeline the county controls.

10. What happens if the claim fails

Spell out that no fee is owed if nothing is recovered, and how competing claims (lienholders, other heirs) affect the amount.

Agreements that fail most often

• A one-size-fits-all template used across several states.
• A fee above the state cap "because the owner agreed to it."
• No free-claim disclosure.
• Signed before a waiting period ended.
• Signed by one heir when several have a claim.

Frequently asked questions

Is there a standard tax overages contract?

No. Because fee caps, waiting periods, and disclosure rules differ by state, an agreement has to be written for the state where the funds are held. Have an attorney licensed in that state review yours.

What must a tax overages agreement disclose?

Many states require it to say that the owner can claim the funds directly for free. Others also require the fee, the amount, and registration details. Check your state's statute.

Can I buy a tax overage claim?

In some states. Texas allows it only 36+ days after deposit, in writing, without phone or in-person solicitation, with at least 80% paid to the owner upfront and recovery capped at 125% of what was paid. Other states have their own rules.

Get the facts before you sign anyone

LienSuite is a data tool, not a recovery service, and we do not provide contract templates or legal advice. What we provide is the data behind a clean agreement: county surplus records with the sale reference and amount, claim deadlines, skip tracing, and free heir research, in the Excess Proceeds plan ($49.99/month) or as $27 single-county lists.

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Disclaimer: This article is for educational purposes only and is not legal advice and is not a contract template. Fee caps, waiting periods, disclosure and licensing rules vary by state and change over time; have any agreement reviewed by an attorney licensed in the state where the funds are held. LienSuite is an independent software product and is not affiliated with, endorsed by, sponsored by, or associated with any third-party coach, author, podcast, course, community, or organization.