New Hampshire Tax Deed Excess Proceeds: The Deadline the State's Own Court Struck Down

New Hampshire is a deed state: the municipality takes a tax collector's deed after the redemption period ends, and when it later sells the property, it's only allowed to keep back taxes, interest, costs, and penalty as defined under RSA 80:90. Everything above that is excess proceeds — and this is the one state where the written deadline and the actual, enforceable deadline don't match.

The court route: interpleader, not a claim form

Under RSA 80:88, if there were recorded lienholders or more than one identifiable owner at the time of the tax deed, the municipality must file a bill of interpleader with Superior Court within 60 days of the purchaser's settlement, naming the former owner(s) and lienholders as defendants and depositing the funds with the court to sort out entitlement by priority. If it's a simple case — a single clear owner, no recorded liens — the municipality can pay the excess directly without going to court.

Here's the part that matters: the statute's deadline is dead law

RSA 80:89, VII still reads on the books as a 3-year limit on the municipality's duty to pay excess proceeds. But the New Hampshire Supreme Court ruled that exact provision unconstitutional in Polonsky v. Town of Bedford, 173 N.H. 226 (2020) — as an unconstitutional taking. The New Hampshire Municipal Association's own guidance to towns confirms it: the 3-year limitation on a municipality's duty to pay excess proceeds is unconstitutional, and separately, that retention of excess tax deed proceeds past that window is also unconstitutional. The legislature hasn't rewritten the statute to remove the old language, so if you read RSA 80:89 cold, you'd think you only had 3 years. You don't — the state's own highest court has already said that cutoff can't be enforced.

So what's the practical deadline?

There isn't a clearly codified replacement deadline that survives the Polonsky ruling. Funds sit with the court (if an interpleader was filed) or with the municipality pending that filing, until claimed — we didn't find a confirmed "reverts to the municipality" or "escheats to the state" endpoint that's still valid law. If you have an older New Hampshire claim you assumed was time-barred because of the 3-year language, it may well not be — worth raising directly with the municipality or an attorney rather than assuming it's gone.

This article is general information, not financial or legal advice. Given the gap between the written statute and the court's ruling, confirm your specific situation with the municipality or a New Hampshire attorney rather than relying on the printed deadline. See our broader guide on surplus funds after a tax sale and the New Hampshire state page for deed mechanics.