An Act to Return to the Former Owner Any Excess Funds Remaining After the Sale of Foreclosed Property
Maine Legislature, Session 131, LD 0101
Committee: Taxation
Sponsors: PERKINS, ARATA, COLLAMORE, GRIFFIN, HENDERSON, JAVNER, POIRIER, RUDNICKI, WHITE
Amends: 36 MRSA §949, 36 MRSA §949-A

Legislative Document
No. 101
H.P. 69
House of Representatives, January 9, 2023
An Act to Return to the Former Owner Any Excess Funds 
Remaining After the Sale of Foreclosed Property
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative PERKINS of Dover-Foxcroft.
Cosponsored by Representatives: ARATA of New Gloucester, COLLAMORE of Pittsfield, 
GRIFFIN of Levant, HENDERSON of Rumford, JAVNER of Chester, POIRIER of 
Skowhegan, RUDNICKI of Fairfield, WHITE of Guilford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §949, as enacted by PL 2015, c. 53, §1, is repealed.
Sec. 2.  36 MRSA §949-A is enacted to read:
§949-A.  Disbursement of excess funds
A municipality that obtains title to property under the operation of this article shall 
disburse to the former owner the excess of any funds as provided in this section.
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A. "Excess of any funds" means:
(1) The amount obtained by the municipality for the disposition of the property 
less:
(a) All taxes and interest owed on the property and the amount of taxes and 
interest that would have been assessed had the property not been acquired by 
the municipality;
(b) The municipality's cost of the lien and foreclosure process;
(c) The municipality's cost of maintaining and disposing of the property;
(d) Unpaid sewer, water or other charges and fees imposed by the municipality 
or a quasi-governmental authority; and
(e) The municipality's cost of mailing notices regarding the property; or
(2) If a municipality does not dispose of property within 180 days after foreclosure, 
the amount determined by subtracting from the fair market value of the property at 
the time of foreclosure, as determined by an independent appraisal, the costs 
specified in subparagraph (1) and the cost of the appraisal performed pursuant to 
this subparagraph.
B.  "Former owner" means a party named on the tax lien mortgage at the time of the 
levy of the tax lien or that party's successors, heirs or assigns or a representative of that 
successor, heir or assign.
C.  "Municipality" means, for property located in the unorganized territory, the State 
Tax Assessor.
2.  Time and form of return; notice.  Within 30 days after the disposition of property 
or 180 days after foreclosure, whichever is earlier, a municipality shall mail by certified 
mail, return receipt requested, to the former owner's last known address notice of the excess 
of any funds. The notice must include an itemized statement showing the amount for which 
the property was sold or appraised and all deductions made from that amount. The notice 
also must include directions for the redemption of the excess of any funds, including 
requiring the personal appearance of the former owner to claim the excess funds and the 
location and hours of operation of the clerk of the municipality or, for property located in 
the unorganized territory, the bureau.
3.  Escrow; negotiation; failure to redeem.  A municipality shall hold the excess of 
any funds for the benefit of the former owner in escrow in a segregated account for 90 days 
or until the completion of negotiation, as required by this subsection, or arbitration, as 
required by subsection 4, whichever is later. Upon the request of the former owner and 
within 90 days after receipt of the notice provided pursuant to subsection 2, the 
municipality shall enter into negotiations for the return of the excess of any funds. If the 
former owner is dissatisfied with the result of the negotiations, the former owner, within 
days after negotiation, may seek arbitration as provided in subsection 4. If the former 
owner fails to appear personally within 90 days after receipt of the notice provided pursuant 
to subsection 2, the excess of any funds may be retained by the municipality.
4.  Arbitration.  The former owner, within 90 days after receipt of the notice provided 
pursuant to subsection 2 or 30 days after the negotiation with the municipality pursuant to 
subsection 3, may request that the controversy regarding the return of the excess of any 
funds be submitted to binding arbitration. The arbitration may be by one arbitrator, 
mutually agreed upon by the municipality and the former owner. If agreement on one 
arbitrator is not reached, the arbitration must be submitted to a panel of 3 arbitrators, one 
of whom is selected by the former owner, one of whom is selected by the municipality and 
one of whom is a neutral arbitrator who is selected jointly by the other 2 arbitrators. Each 
party shall pay its chosen arbitrator and half of the cost of the neutral arbitrator. 
Determination of disputed matters by the panel of arbitrators is final and binding on the 
parties. The arbitration must be administered under the auspices of the American 
Arbitration Association or a successor organization and, except for the selection of 
arbitrators, is governed by the commercial rules and procedures of the American 
Arbitration Association or a successor organization. The concept of "last best offer" must 
be used.
Sec. 3.  Application. This Act applies to property foreclosed on by a municipality 
or, for property located in the unorganized territory, by the State Tax Assessor on or after 
the effective date of this Act.
SUMMARY
Under current law, if a municipality, or the State Tax Assessor for property located in 
the unorganized territory, forecloses on property for failure to pay taxes owed on that 
property, the municipality is under no obligation to return any funds that exceed the amount 
owed in taxes after the sale of the property.
This bill requires the municipality, which includes the State Tax Assessor for property 
located in the unorganized territory, to provide notice of the availability of the excess funds, 
after subtracting the tax lien, interest, fees for recording the lien, costs of mailing notice, 
court costs and any other expenses incurred in disposing of the property, to the former 
owner within 30 days after the sale of the property or 180 days after the foreclosure, 
whichever is sooner. The municipality is required to keep the excess funds in a segregated 
escrow account. If the former owner fails to claim the excess funds in person within 90 
days after receipt of the notice, the municipality is allowed to retain the excess funds. If the 
former owner or the former owner's representative notifies the municipality within 90 days 
after receipt of the notice, the municipality must negotiate with the former owner over the 
return of the excess funds. If the former owner is dissatisfied with the municipality's offer, 
the former owner may seek binding arbitration for resolution of the matter.