Understanding Surplus Funds and Why Notarized Authorization Is Required for Third-Party Assistance

What Are Surplus Funds?

Surplus funds—also referred to as excess proceeds or unclaimed funds—are monies left over after a financial obligation has been satisfied. In the United States, surplus funds most commonly arise from:

• Foreclosure sales where the property sells for more than the debt owed

• Tax deed or tax lien sales

• Overpaid utility, escrow, or insurance accounts

• Dormant or abandoned accounts held by government agencies

These funds are not automatically distributed. Instead, they are held by an organization—often a county, court, or state agency—until the rightful owner submits a valid claim.

Why Many People Use Third-Party Assistance

Recovering surplus funds can be time-consuming and complex. Each holding entity has its own claim procedures, documentation standards, and identity verification requirements. As a result, many individuals choose to work with a third-party professional, such as a surplus-funds locator, asset recovery specialist, attorney, or financial consultant, to assist with the process.

However, these organizations will not communicate with or release funds to a third party unless proper legal authorization is provided.

The Role of Notarization in Surplus Funds Claims

When authorizing a third party to act on your behalf, notarization is a critical safeguard. Most U.S. organizations require notarized documents to:

• Confirm the identity of the claimant

• Verify that authorization is being given voluntarily

• Prevent fraud, coercion, or improper diversion of funds

• Establish a legally defensible record

Without notarization, claim packets are frequently rejected or delayed.

Common Forms That Require Notarization

While requirements vary by agency, the following documents are commonly required to be notarized when a third party is assisting with surplus funds recovery:

1. Authorization to Act on Behalf of Claimant

This document formally allows a third party to communicate with agencies, submit claims, and receive information related to the funds.

2. Limited Power of Attorney

Some agencies require a limited power of attorney (POA) granting specific authority to pursue and collect surplus funds. This POA is typically restricted in scope and duration and almost always requires notarization.

3. Affidavit of Identity or Heirship

If the original owner is deceased or unavailable, an affidavit may be required to establish the claimant’s legal right to the funds. These affidavits must be notarized to be valid.

4. Assignment of Proceeds

In cases where the third party is compensated from the recovered funds, an assignment agreement may be required. Many jurisdictions require this document to be notarized to ensure enforceability.

Organizations That Commonly Hold Surplus Funds

Surplus funds may be held by a wide range of entities, including:

• County Clerk or County Treasurer offices

• Courts handling foreclosure or tax sale proceedings

• State unclaimed property divisions

• Federal agencies such as the Internal Revenue Service or housing authorities

• Municipal utilities and insurance carriers

Each organization sets its own documentation and notarization standards, making professional guidance and compliant notarization especially valuable.

Remote Online Notarization (RON) as a Solution

For claimants who are out of state, traveling, or living abroad, Remote Online Notarization (RON) can be an efficient alternative to in-person notarization. When permitted by the receiving organization, RON allows documents to be notarized online using secure identity verification and audio-visual technology.

This option is particularly helpful when time-sensitive surplus funds claims must be filed quickly or when coordinating with third-party professionals located in different states.

Surplus funds belong to the rightful owner but accessing them often requires navigating strict procedural rules. When working with a third party, properly notarized authorization documents are not optional—they are foundational to a successful claim.

Whether you are the claimant or a professional assisting with recovery, ensuring that all required forms are accurately completed and properly notarized can significantly reduce delays, rejections, and legal risk.

If you are unsure which documents require notarization or whether online notarization is acceptable for your specific situation, consulting with a qualified notary or surplus-funds professional before submitting your claim can save both time and money.