Atlanta, GA · Member since 2016 · 91 posts · 67 votes
By searching/reading in BP, I have learned that after the barment period expires, the "clouded title" can be cleared by quiet title action. I believe someone also mentioned about "wait 4 years", but there is very little information on it. I would like to know: is there any legal action involved once the wait is over ?
@Ned Carey is right (again). Clear title is no guarantee you can sell and the buyer can get title insurance. If selling and financing is involved, I could see that being a potential problem. Your best option is to get legal advice in your state with an attorney that is familiar with this niche.
I read the GA code annotated tittle 48, chapter 4, article 3 - but it stops short on redemption. I think the matter is outside of scope of the state laws.
This matter is very much within state code as that is the controlling entity for property taxes. You need to research redemption period (in GA that is 13 months) and contestability periods to find out when the owner's or others right to impede your ownership expires. If you are looking to invest in tax properties, you will eventually need a lawyer familiar with these statutes in the state you invest in. Probably best to get that relationship established early.
@Kiet N. make valuable points. However I slightly disagree and would add to what they said. Yes, part of what determines this is state statute, but also some of it may be buried in case law.
However as important as having "clear title" is having insurable title. There are two subtly different things. Clear title means no one can legally win a challenge against your title. However title insurance companies are not just concerned about "Wining"a case to clear a title, but just as concerned about the possibility that someone will try. They don't want to have the cost to defend.
I know we have some people here who specifically work Tax sale in GA. You may want to talk to an attorney who does tax sale work in the state or a title company that is familiar with tax sales.
@Ned Carey is right (again). Clear title is no guarantee you can sell and the buyer can get title insurance. If selling and financing is involved, I could see that being a potential problem. Your best option is to get legal advice in your state with an attorney that is familiar with this niche.
Learned something new today : " clear title" vs "insure-able/marketable title" - Really appreciate all your inputs.
Reason I asked the question b/c there is not much info about it. I found the "4 years wait" were mentioned TWICE in hundreds - if not thousands - tax sale related questions/answers here.
Google search yields zip
I just want to explore all the possible exit strategies ties to tax sale. Haven't heard anyone to discuss : TS acquiring > barment > rent out 4 yrs> sale out > repeat . Just a wild thought !!!!
Some of the best posters on BP have weighed in on this topic @Kiet N..
In those states where properties are auctioned for defaulted taxes, there can be defects that interfere with your ability to receive clear title. In addition to super-priority liens which attach per the tax roles.
And challenges to noticing by missed owners, claimants and junior lien holders ( i.e. Mortgages) can affect your bottom line.
Lastly, code enforcement liens may re-attach in some circumstances.
I've worked a number of these deals over the years and concluded that for me, tax sales are not a good way to acquire assets but a great place to fish using the default lists as "hit lists."
@Kiet N. correctly, corrected my point, you may not be able to decipher what gives you "insurable title" from the statutes. And remember, tax lien laws are state specific, and many of the comments about "waiting 4 years" may have come from Florida people, as here that is the alternative to a quiet title action....but it likely is not the same in Georgia.
@Kiet N. points out that title insurance companies may still refuse to insure a 4+ year old tax deed. This suggests that people who are in the business of knowing everything about real estate law believe there is material risk that someone will challenge even a "ripened" tax deed.
It strikes me that the clear intention of the legislature was to clear title on tax deeds after four years, but the wording of the statute unfortunately leaves wiggle room: "A title under a tax deed properly executed on or after July 1, 1996, at a valid and legal sale shall ripen by prescription after a period of four years..." The modifying language ("by prescription," "properly executed," "valid and legal") creates ample opportunity for for lawyers to challenge the deed or the sale.
I think the reality on the ground is that you are probably fine just doing barment if you want to rent the property or sell to another investor. If you want to mortgage it or sell it to a retail buyer, you will probably need to do a quiet title action.
I am not a lawyer, so you should get one if you need advice on your specific situation.
Actually, there's a pretty significant body of law concerning real estate, title and taxation.
This is why a seemingly inoculuous question can have some many responses from informed sources both on BP and other forums.
You really have to apply state codes and understate major applicable case law and apply to a very specific set if facts and circumstances to get a good fix on a situation.
For the first dozen years of my real estate career I hated title theory and found it a drag.
Then I "got religion" concerning title when I score a $500K equity profit on a deal in 1991 because of a superior title information. While I still make title mistakes on occasion the gains from use of what I've learned and apply far outweigh the mild errors.