HELP! Foreclosure due to Previous Owner not paying Tax

[Eka Linwood]

So I closed on this property (triplex) around Mid-Feb 2020. I just found out thru a letter from the county, that I am now in foreclosure because I'm apparently delinquent on my property tax. I thought this was weird or some sort of a scam, because I bought the property thru a mortgage, so I pay property tax as part of my monthly escrow payment. After looking at the county website, the property tax from 2019 is indeed delinquent. The previous owner "paid" his 2019 tax "late" on 1/31/2020. My settlement date is on 2/24/2020. The county website says that the 2019 tax is still "owed" for 2 of the 3 property.

The sale process included two title companies (I think). The Owner's Policy is dated 2/25, and states that the title insurance "insures...against loss or damage...incurred by the Insured by reason of...lien of real estate taxes...due or payable but unpaid". The exception from coverage section states "Taxes, or special assessments, if any, not shown as existing liens by the Public Records". 

The penalty from the 2.5 years of being delinquent has resulted in the property tax due being essentially double from what it was. I'm planning to file a claim against the title insurance, but wanted to see what else I can do:

- I got the letter late - one of the tenant gave the letter to me today, dated 5/26 and was issued to the "occupant" which was him. I just got the letter today and confused on what I need to do. Planning to call the county Monday to see what I need to do. Letter says there's a foreclosure / tax sale Aug 15. Is the foreclosure process finalized? Is the property no longer mine?

- What is the extent of the damage here that I can claim from the title insurance? Will they cover the 2019 property tax and penalty ? If the foreclosure has been finalized, will they cover any losses from that sale? The coverage is up to the sale value of the property in 2020. 

- I tried paying the tax online, but website told me to go to the county office. Should I go ahead and pay the delinquent tax + penalty to the county ? If it helps avoid the foreclosure process, I don't mind paying the amount due, as long as I am later reimbursed by the title company. 

- Who should I contact first? Title Insurance, Title Company or County?

[Tom Gimer]

Looks like the property is in a tax lien jurisdiction so there is a redemption period... which is good (the property is still yours). I would go to the title company who issued the policy first and explain the situation. It's possible that payments collected at settlement were misapplied to the multiple tax accounts or that the seller's payment in early 2020 was returned. By paying the full amount due now to redeem, you might make things more difficult... the title company might be able to get the tax sale voided and eliminate a bunch of interest. They can also collect from the seller if that is what's necessary to fix this. If they drag their feet, then file a title claim.