Jo Anne in Alabama, new member with questions

Jo Anne in Alabama, new member with questions

fruithurst, alabma · Member since 2017 · 1 post · 0 votes

We started venturing into tax sales at the beginning of 2013.  We lived in Cumming, GA and wanted a spread in the middle of no where, we were lucky enough to know someone who lived in Fruithurst and knew the property next to him was going to sale.  At the time we knew nothing of doing property tax sales, and had no intention of getting into it as an investment opportunity.  I began researching extensively how the process worked, how the previous owners debts were attached to the property, redemption periods and so on and so forth.  I researched specific topics till I was blue in the face and all the answers I was getting were the same.  We knew that if there was a mortgage, the mortgage company would pay the taxes, but could only find personal loans and credit card debts.  I was able to find information about her bankruptcy on https://pacer.login.uscourts.gov.  Here I read about all of her debts and began to search out if those debts were tied to the property in any way.  All my answers were NO, once they go to tax sale all debts are forfeited if they do not pay the delinquent taxes.  We went to the sale an won!  Fast forward to 2017, we are trying to get a clear title on the house an apparently (per a very rude and not helpful attorney) the house still belongs to the heirs of the deceased (from what we know he did 10 years ago and the wife didn't want the property) and that there are judgements.  From my research on pacer, there was no mortgage, but a personal loan of about $30K and some credit card debts of around $15K (from what I can remember).  So my question is how do I get a clear title so we can either sell it or borrow against the house, or whatever we want to do with it? Even the tax commissioner said all judgements should have been erased after the deed was recorded in our name.  I have reached out to local attorney's and no one seems to know anything or have any suggestions. I thought I was doing my due diligence before getting into this, but I fear a year after getting the deed and being told its ours now it looks as thought we took on her debts along with the house.  I have researched quit claim deeds and quiet title claims, but am not sure if either of those will help us get a clear title. 

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Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
9y

Sorry but just to boil things down, you now have a tax deed for a property in Alabama and need to get clear title?   You should find other Alabama investors and attorneys who specialize in AL Tax Deeds.  Process matters a lot.  You just haven't found the right one.

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  • Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    9y

    Sorry but just to boil things down, you now have a tax deed for a property in Alabama and need to get clear title?   You should find other Alabama investors and attorneys who specialize in AL Tax Deeds.  Process matters a lot.  You just haven't found the right one.

  • Flipper/Rehabber · Jacksonville, AL · Member since 2016 · 68 posts · 26 votes
    9y

    Read any of Denise Evans posts here on BP. She provides alot of really good information on Tax Liens----courses, books, articles etc.  I think she is an attorney also so you may be able to hire her to help you with your issue. Also, Joseph Maloney in Jacksonville, AL is a Real Estate investor and attorney. He may be able to assist. I dont know him but one of the teachers at my school mentioned he handled some of his RE transactions.  Good luck. Sorry you are dealing with this. 

  • JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    I assume you are dealing with judgment liens, is that correct?  Any liens against the property because of the taxpayer are "trumped" by the tax sale. Lienholders can redeem, however. They have the regular 3 years after the auction, plus a special lienholder redemption period, whichever is longer. 

    The special lienholder redemption period applies to ALL liens--mortgages, IRS, Alabama Department of Revenue, Medicaid, judgment, etc.  The tax lien owner, or the tax deed owner, must give certified mail return receipt notice to the lienholder about the tax sale and the contact information for the tax sale investor. That is all you have to say in the notice letter. Then, the lienholder has one year after receipt within which to redeem. If it does not, then it has lost all redemption rights and its lien.

    To get good and insurable title to tax sale real estate, you must usually engage in 3 years of exclusive possession AFTER the tax deed date.  This is necessary in case there were any defects in the tax sale that rendered it void, such as the auction notices being the name of a dead person, or the "heirs of ..." a dead person.  You must have the name of the current owner(s) on the notices and called out at the auction in order for the sale to be valid.  On the other hand, 3 years of adverse possession after the tax deed date will "cure" the void tax sale and foreclose the former owners' ability to dispute the sale.

    Technically, if the tax sale is not void, you can file your quiet title action 3 years after the auction (rather than 3 years after the tax deed), but only if you have exclusively possessed the property for that time period.  Virtually no lawyers or trial level judges in Alabama understand this distinction, because it is rooted in convoluted legal history and is subtle.

    Here is my forum article about Alabama tax sale redemption rights:  https://www.biggerpockets.com/forums/70/topics/181968-alabama-tax-sale-redemption-rights

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