Colorado's New Excess Funds Rule for Tax Lien Foreclosures
Colorado is a tax lien state. Investors don't bid the rate down. They bid a premium that the county keeps, and the certificate earns a rate the State Bank Commissioner sets every September 1 at nine points above the federal discount rate: 13% for certificates sold from October 1, 2026 (C.R.S. 39-11-115(1), 39-12-103(3)). If the lien is not redeemed, the holder can apply for a treasurer's deed after August 1 of the third calendar year following the sale (C.R.S. 39-11.5-102(1)). Until July 1, 2024, that was often the end of the story: the treasurer could issue the deed directly once the statutory conditions were met, with no public resale and, as a result, no possibility of a surplus.
HB24-1056: a public auction now comes first
Colorado's HB24-1056, effective July 1, 2024, ended the direct-deed-on-request process and requires a public auction before a treasurer's deed can issue — explicitly to bring Colorado in line with Tyler v. Hennepin County, the 2023 U.S. Supreme Court ruling that treated a government keeping more than the tax debt it's owed as an unconstitutional taking. Practically, this means every Colorado lien that reaches the deed stage now goes through a real bidding process, not a paperwork handoff.
SB26-144: the auction was rewritten in 2026
Two years later the legislature started over. SB26-144 repealed and reenacted the auction process as a new article 11.5, modeled on Colorado's public trustee foreclosure process. It applies to every treasurer's deed issued on or after June 1, 2026, whatever the date of the lien sale or the deed application, and treasurers can no longer issue a deed under the old procedure (C.R.S. 39-11.5-602). If you read about Colorado's deed auction before mid-2026, several details below have changed.
How the overbid gets distributed
The overbid is whatever the auction brings in above the total debt: the amount owed to the certificate holder plus the treasurer's fees and costs (C.R.S. 39-11.5-101(16)). Junior lienholders whose liens were recorded before the deed application can claim it, but only by filing a claim for overbid money with the treasurer within eight business days after the auction. Between the ninth and fifteenth business day, the treasurer pays them in order of recording priority, each up to the unpaid lien plus fees and costs. Whatever is left goes to the former property owner (C.R.S. 39-11.5-303, 39-11.5-112(1)).
Two years, then the State Treasurer
The eight-day claim is for lienholders. For the former owner, the treasurer has to mail a notice about any remaining overbid within 30 days after the claim period ends, and if more than $500 is still unclaimed 60 days after that period, publish a notice in a local newspaper too. Unclaimed money is held in escrow for two years from the auction, without interest. Amounts under $25 not claimed within six months go to the county general fund. Larger amounts not claimed within two years go to the State Treasurer under Colorado's unclaimed property law (C.R.S. 39-11.5-112(2)–(3)). If someone offers to recover the money for you, the agreement is enforceable only if the fee is at most 10% and it was signed at least two years after the money was transferred (C.R.S. 39-11.5-112(2)(c)).
The certificate holder's clock
There's a separate timing detail if you hold the certificate. You can apply for the auction after August 1 of the third calendar year after the lien sale, but not forever. A certificate issued on or after January 1, 2026 stops being a lien seven years after it is issued; older certificates keep the old fifteen-year limit. No deed can issue on an expired certificate unless your application was already pending when the period ran out (C.R.S. 39-11-148(1)–(2)). Once an auction is scheduled, the owner can still redeem, but must file an intent to redeem with the treasurer at least seven calendar days before the auction date (C.R.S. 39-11.5-106(1)).
For investors: this changes the math on old certificates
If you're holding Colorado certificates on properties worth well above the lien amount, the old direct-deed path — effectively acquiring the property at a steep discount once the redemption window lapsed — no longer applies. Your bid at the auction is the total debt owed to you. The treasurer prepares the bid form for your approval and submits it even if you don't return it (C.R.S. 39-11.5-107(1)). If nobody outbids you, you become the purchaser. If an outsider wins, you are paid what you are owed, and the equity above that goes through the overbid distribution to junior lienholders and the former owner instead of to you. You keep one option: file a notice of intent to repurchase within three business days after the auction, with a $100 fee, and by noon on the eighth business day pay the part of the winning bid above your debt, plus interest and costs. That lets you keep the property by matching the price (C.R.S. 39-11.5-301, 39-11.5-302).
Looking for a list? Our directory doesn't have an official Colorado county list yet, so for now ask the office that ran the sale. The counties that do publish one are in our directory of official surplus funds lists.
This article is general information, not financial or legal advice. Confirm current auction and claim procedures with the relevant Colorado county treasurer. See our broader guide on surplus funds after a tax sale and the Colorado state page for certificate and redemption mechanics.