What Happens If You Sign With a Surplus Company and Then File Your Own Claim in Ohio?

After a foreclosure or tax sale in Ohio, any money left over after the debts are paid is called excess funds, and it belongs to the former homeowner. Getting it back usually means filing a claim with the court. But what happens if you sign that claim over to a surplus recovery company, then change your mind and file your own claim anyway? A recent Ohio case answers that question plainly, and the answer cost one homeowner control of more than $55,000.

A small tax bill that became a big surplus

The case started, as many Ohio tax cases do, with a surprisingly small debt. The county filed a tax foreclosure over a delinquent tax certificate of about $1,500. The homeowner appeared at hearing after hearing, telling the court she was trying to arrange a loan or assistance to save the house. By the time the property sold, the taxes due had grown to more than $27,000, because taxes keep accruing while a case is open.

The home sold at sheriff's sale for $85,700. After the county was paid and the court costs were covered, more than $55,000 in excess funds sat with the clerk of court. That money was the homeowner's, if she claimed it.

The signature on sale day

On the very day of the sheriff's sale, the homeowner signed a recovery agreement with a surplus company. The agreement assigned her entire claim to the excess funds to the company, permanently. Under the agreement, she would receive 67 percent of the net surplus, and the company would keep 33 percent, plus reimbursement of its fees and costs out of her share.

Three weeks later, she hired her own lawyer and filed a motion asking the court to release the full amount to her directly, saying no one else had a better claim. The company objected, pointing to her signed assignment. Her lawyer then withdrew from the case the day before the hearing. At the hearing, only the company's lawyer appeared. The court granted the company's motion and denied hers, and the clerk paid the money to the company.

What this means if a company asks you to sign

First, a signed assignment is hard to undo. Changing your mind, even quickly, and even with a lawyer's help, does not cancel a full assignment of your claim. If there is a fight, it will be about the agreement itself, not about who asks the clerk first.

Second, timing matters. This homeowner signed on the day of the sale, before the sale was even confirmed, before she had spoken to a lawyer of her own. The days right after a sale are exactly when you should slow down, read every page, and get the fee in plain writing before you sign anything.

Third, compare the fee. The company in this case kept one third of the surplus. On more than $55,000, that is roughly $18,000 for filing a claim the homeowner could have filed herself, since she was alive, reachable, and already involved in the case. Fees vary widely between companies, and a lower, clearly stated fee is a fair question to demand an answer to.

Fourth, ask what happens if you want out. A fair agreement explains how it ends. One that is described as permanent and impossible to cancel deserves extra caution, and a conversation with your own attorney before you sign, not after.

Fifth, show up, with help that stays. In this case the outcome turned on one hearing, and only one side was in the room. If you ever do dispute a claim, the hearing is the case.

The bottom line

Excess funds after an Ohio sale are real money, and they are yours to claim. Companies that offer to handle the claim can do legitimate work, but the agreement you sign on an emotional day, often the day your home is sold, decides who gets paid. Read it like it matters, because a court will. Ask for the fee in writing, ask how the agreement can end, and take a day to think. The money will still be there tomorrow; your right to it might not be.

This article is for general information only and is not legal advice. Every case is different; consult a licensed Ohio attorney about your specific situation.