Buying Tax Lien Properties!!!

[Roderick Gunn]

What are the laws in Alabama if you buy a tax lien property and it has an existing lien on the property?

[Denise Evans]

@Roderick Gunn, for local government liens (such as grass cutting, demolition, sewer assessment, fire dues and library dues are the most common) the local government lien trumps the tax sale. Local government can foreclose their lien, but they must pay the investor for taxes and interest. They do not have to pay the investor for improvements or insurance, even if a redeeming party would have to pay those things.

For all other lienholders, including mortgagees, judgment creditors, IRS, Alabama Dept of Revenue, Medicaid, IRS, etc., they all have to redeem from the investor before they can foreclose or execute and convey good title. A mortgage lender can go through something called a foreclosure and have an auction on the courthouse steps and execute a foreclosure deed, but all they've really foreclosed on is their borrower's redemption rights for the tax sale.  Such lienholders must pay all of the normal charges that any taxpayer would have to pay in order to redeem.