In Tennessee, the collection of delinquent county and municipal property taxes is administered through the Chancery Court or Circuit Court pursuant to Tennessee Code Annotated § 67-5-2501 et seq. When competitive auction bids generate funds exceeding the delinquent tax debt, statutory penalties, and court fees, the remaining proceeds are held in trust by the Clerk & Master of the Chancery Court.
1. Chancery Court Jurisdiction and Clerk & Master Registry
Excess funds from Tennessee delinquent tax sales do not pass into an administrative county fund; rather, they remain under the direct supervision of the Chancellor. Any party asserting an entitlement to excess proceeds must file a formal motion or petition in the underlying delinquent tax cause of action before the Clerk & Master.
Statutory Distribution Hierarchy:
Under T.C.A. § 67-5-2501 et seq., the court determines distribution based on established equity principles: first satisfying any subordinate liens or encumbrances of record in order of priority, with remaining balances disbursed to the titled owner of record at the time of sale.
2. Interaction with Statutory Redemption Rules
A unique complexity of Tennessee practice is the interaction between surplus distribution and the statutory right of redemption under T.C.A. § 67-5-2701. Counsel representing former owners or junior lienholders must carefully navigate the timing of surplus motions to ensure that claims are properly adjudicated in conjunction with any redemption notices.
Track Tennessee Chancery Court Dockets Automatically
Gain instant visibility into verified Chancery Court excess funds dockets across Shelby, Davidson, Knox, and Hamilton counties with pre-screened encumbrances. Delivered daily at 7:00 AM EST.
Activate National 6-State Master Suite ($449/mo)Editorial Fact-Check & Statutory Audit: Passed
100% Case-VerifiedThis document was algorithmically audited against official public judicial records and statutory priority frameworks (T.C.A. § 67-5-2501). Surplus Docket is an autonomous public records compiler and does not provide legal representation.