The town had received $105,000 for the sale, roughly $41,000 more than Durgin owed after back taxes, interest, and other fees were calculated. By law, Durgin learned, he was owed the difference.

In Durgin’s case, the town of Webster sold Durgin’s house for just over $105,000 through a sealed bid process that was publicly posted. With the sale, the town netted $41,300 in proceeds ...