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Updated almost 5 years ago on . Most recent reply

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Troy Michaels
  • Real Estate Investor
  • Atlanta, GA
7
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117
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Protecting a tax lien investment from damage

Troy Michaels
  • Real Estate Investor
  • Atlanta, GA
Posted

got a question. lets say you purchase a tax lien, and before the property is redeemed or you acquire it thru quiet title, what happens if the house is burned down or damaged by the current owner or someone else?? should or can you buy insurance on the house to protect your investment??

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Denise Evans#1 Tax Liens & Mortgage Notes Contributor
  • JD, CCIM , Real Estate Broker
  • Tuscaloosa, AL
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Denise Evans#1 Tax Liens & Mortgage Notes Contributor
  • JD, CCIM , Real Estate Broker
  • Tuscaloosa, AL
Replied

@Cortney Jones, it is sometimes difficult to find insurance in Alabama because you have possession rights but not title. That creates "insurable interest" issues.  Be sure to disclose to your insurance agent that you have a tax lien.  If the property contains a residential structure, or if the property is located within an urban renewal or urban redevelopment district, then redemption costs will include reimbursement for insurance premiums plus 12% per year interest.

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